consumar desation making process

8/7/2019 Consumar Desation Making Process

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Problem Recognition

In this information processing model, the consumer buying process begins when the buyer recognizes a

problem or need. For example, Doug may realize that his best suit doesnt look contemporary any

more. Or, Kathleen may recognize that her personal computer is not performing as well as she thought

it should. These are the kinds of problem that we as consumers encounter all the time. When we found

out a difference between the actual state and a desired state, a problem is recognized. When we find a

problem, we usually try to solve the problem. We, in other words, recognize the need to solve the

problem. But how?

When consumers realize that they need something! It is the first step in the decision-making process:

Problemrecognition Information search Alternative evaluation Choice Outcomes

Different people have different benefit motivations for purchasing different products orservices.

Types of benefit motives: To optimize satisfaction To prevent possible future problems To escape from a problem To resolve a conflict To maintain the status quo or satisfaction

Problem Recognition: Actual State versus Desired State

It is the psychological process used to determine the difference between the consumers actualbenefits state (where you are) and the desired benefits state (where you want to be).

Opportunity (vs. problem) recognition


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Problem Recognition Influences

Situational influences Consumer influences Marketing influences

Situational influences

Product consumption (e.g., running out of gas) Product acquisition (e.g., purchasing a new home may stimulate other purchases) Changed circumstances (e.g., moving away from home to college)

Consumer Influences

Actual state consumers: those who look to existing products to solve their problems. Desired state consumers: those who shop for new products to address their problems.

They enjoy the shopping experienceMarketing Influences

Marketing mix changes and/or promotion actions may help stimulate problem recognition: Advertising Coupons Free offers sweepstakes


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Information Search

When a consumer discovers a problem, he/she is likely to search for more information. Kathleen may

simply pay more attention to product information of a personal computer. She becomes more attentive

to computer ads, computers purchased by her friends, and peer conversations about computers. Or,

she may more actively seek information by visiting stores, talking to friends, or reading computer

magazines, among others. Through gathering information, the consumer learns more about some

brands that compete in the market and their features and characteristics. Theoretically, there is atotal

setof brands available to Kathleen, but she will become aware of only a subset of the brands (awareness

set) in the market. Some of these brands may satisfy her initial buying criteria, such as price and

processing speed (consideration set). As Kathleen proceeds to more information search, only a few will

remain as strong candidates (choice set).

Information collected by consumers is the basis for evaluation and choice behavior. It is important for marketers to know:

Why consumers are searching for information Where will they look What information consumers seek How extensively they are willing to search

Types of Information Search

Prepurchase search: Directed searches: consumer searches for information that will help solve a specific

problem.

Browsing: consumer is just looking with no immediate intent to buy. Accidental search: consumer is not actively looking for information, but takes note of

information that is formally presented or inadvertently encountered.

Post-purchase search: gathering information on choice made after the purchase. Ongoing search: continuous information gathering to stay marketplace-current.

Internal and External Information Search


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Internal search: search based on existing information in memory. Information quantity, quality, relevance, currency Experts vs. novices

External search: the search of information beyond ones memory. Personal sources: friends, experts, salespeople Impersonal sources: advertising, in-store displays, trade reports, the Internet. Experts vs. novices

Why Do Consumers Engage in External Information Search?

High perceived value versus perceived cost of search Need to acquire information Ease of acquiring and using information Confidence in decision-making ability Locus of control (internals vs. externals) Actual or perceived risk Costs of external search Types of products sought

Alternative Evaluation

Typically, consumers use from four to six criteria. The more important the purchase and/or the greater experience a consumer has with the product class, the greater the number of

criteria used.

Criteria may be used in combination. The more important the decision, the fewer are the acceptable alternatives. Pick an attribute; eliminate all products/services not meeting that attribute. Use cutoffs or minimum or maximums. Rank the attributes in order of importance and then evaluate the products/services on the most important attributesHow does the consumer process competitive brand information and evaluate the value of the

brands? Unfortunately there is no single, simple evaluation process applied by all consumers or by

one consumer in all buying situations.


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One dominant view, however, is to see the evaluation process as being cognitively driven and

rational. Under this view, a consumer is trying to solve the problem and ultimately satisfying his/her

need. In other words, he/she will look for problem-solvingbenefits from the product. The

consumer, then, looks for products with a certain set of attributes that deliver the benefits. Thus,the consumer sees each product as a bundle of attributes with different levels of ability of delivering

the problem solving benefits to satisfy his/her need. The distinctions among the need, benefits, and

attributes are very important. One useful way to organize the relationships among the three is a

hierarchical one (Figure 2). Although simplified, Figure 2 is an example of how a bundle of attributes

(i.e., a product or, more specifically, personal computer) relates to the benefits and underlying

needs of Kathleen.

Figure 2 Hierarchical View of Needs, Benefits, and Attributes

From this figure and the preceding discussion, you might recognize that the product attributes

are relevant and important only to the extentthat they lead to a certain set of benefits.

Likewise, benefits are meaningful only ifthey can address the problem and be instrumental to

satisfy the underlying need. As the underlying need is often personal, consumers differ as to

their beliefs about what product benefits and attributes are more (or less) important and

relevant in satisfying their needs. Based on their personal judgment on importance of benefits

and attributes, consumers develop a set of attitudes (or preferences) toward the various brands.

Underlying Needs

Benefits

AttributesSize

Portability

PriceCPU Speed

Computational

Horse PowerEconomy

Hard Drive Size

Software

Bundle

Helps Me SurviveBabson MBA Pogram

Doesnt Break

down

Brand

Reputation

Warranty

GlobeNet

Ready


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One may express his/her preferences of the brands in terms of ranking, probability of choice,

and so forth.

Purchase

To actually implement the purchase decision, however, a consumer needs to select both specific items

(brands) and specific outlets (where to buy) to resolve the problems. There are, in fact, three ways

these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3) outlet first, item

second.i In many situations, consumers engage in a simultaneous selection process of storesii and

brands. For example, in our Kathleens personal computer case, she may select a set of brands based on

both the products technical features (attributes) andavailability of brands in the computer stores and

mail-order catalogs she knows well. It is also possible, that she decides where to buy (e.g.,CompUSA in

her neighborhood) and then chooses one or two brands the store carries. Once the brand and outlet

have been decided, the consumer moves on to the transaction (buying).

Understanding buying intention is key to predicting and potentially influencing plannedbehavior

Measuring purchasing intention can be done: Measures of intention may not provide accurate results since situational influences

change

The method of questioning may be flawed itself. (A solution: Yes or No about doingsomething; then determine probability of doing this)

Intervening variables: changes that may have an impact on the actual purchase behavior Financial status, employment situation, family or household size, weather, etc. Deliberation: the longer we put off a purchase the higher the likelihood that either the

purchase will not be made or the choice will change.

Four types of unplanned purchases Pure impulse: those that are bought for the sake of novelty Reminder impulse: are routine purchases, albeit unanticipated. Suggestion impulse: when a product (not previously seen) stimulates immediate need

recognition

Planned impulse: responding to a special incentive to buy an item considered in the pastbut not selected

Outlet selection or brand choice, which comes first?


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Brand choice first Brand loyalty No outlet loyalty or preference No need for the expertise of salespeople (knowledgeable consumers)

Outlet choice first High store loyalty or preference Low brand loyalty Need for helpful sales staff

Brand and outlet working together Find the best fit for the consumers self-image


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Post-Purchase Behavior

Its as important as understanding what causes consumers to buy. It deals with actual rather than potential customers It has an impact on future sales. Information learned can be used to improve products and services, undertake better targeted

promotions, and design more effective strategies to keep actual customers and attract new

ones.

Positive Post-purchase Behavior

Customer loyalty: a feeling of commitment on the part of the consumer to a product, brand,marketer, or outlet that results in high levels of repeat purchase or outlet visit

Loyalty develops over time through positive market experiences Loyalty phases:

Cognitive (based on beliefs only) Affective (like, based on repeated satisfying use) Conative (behavioral intention loyalty)

Cognitive Dissonance

?

Did I make a good decision?Did I buy the right product?Did I get a good value?


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Action (strong readiness to act)\

Negative Post-Purchase Behavior

Passive: lack of repeat purchase or recommendations to other consumers Active: potentially damaging to the reputation and future sales of the product Types of negative post-purchase behavior:

Negative word-of-mouth Rumor

Complaint behavior (no action, private action, public action)

Post-purchase evaluation processes are directly influenced by the type of preceding decision-making

process. Directly relevant here is the level ofpurchase involvementof the consumer. Purchase

involvement is often referred to as the level of concern for or interest in the purchaseiii

situation, and

it determines how extensively the consumer searches information in making a purchase decision.iv

Although purchase involvement is viewed as a continuum (from low to high), it is useful to consider two

extreme cases here. Suppose one buys a certain brand of product (e.g., Diet Pepsi) as a matter of habit

(habitualpurchase). For him/her, buying a cola drink is a very low purchase involvement situation, and

he/she is not likely to search and evaluate product information extensively. In such a case, the

consumer would simply purchase, consume and/or dispose of the product with very limited post-

purchase evaluation, and generally maintain a high level of repeat purchase motivation (Figure 3).

Purchase Product UseSimple

EvaluationDisposition

Repeat Purchase

Motivation

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