Problem recognition is the first stage of the consumer decision making process. This influences the amount and type of information search: but we will cover that in the next chapter. In this chapter, we will consider the following contents: Nature of problem recognition; difference between habitual, limited and extended decision making; methods for measuring problem recognition; marketing strategies based on problem recognition.
Chapter Problem Recognition • Nature of problem recognition • Difference between habitual, limited and extended decision making • Methods for measuring problem recognition • Marketing strategies based on problem recognition Copyrightê2004McGrawưHillAustraliaPtyLtd 31 Need/Problem Recognition What happens during need/problem recognition? • Can they be activated? • Are there non-marketing influences? • What marketing influences are used? • Does it vary from one person to the next? • Implications for marketing strategy? Copyrightê2004McGrawưHillAustraliaPtyLtd 32 Types of Consumer Decisions Problem recognition Purchase involvement Copyrightê2004McGrawưHillAustraliaPtyLtd 33 Types of Consumer Decisions (cont.) • Purchase involvement – influenced by the interaction of individual, product and situational characteristics • Forms of involvement and outcomes – – – Habitual decision making—single brand Limited decision making Extended decision making Implications for strategy Copyrightê2004McGrawưHillAustraliaPtyLtd 34 Purchase Involvement and Types of Decision Making High purchase involvement Low purchase involvement Habitual decision making Limited decision making Extended decision making Copyright ª 2004 McGrawHill Australia Pty Ltd 3–5 Purchase Involvement and Types of Decision Making (cont.) 3–6 Purchase Involvement and Types of Decision Making (cont.) 3–7 Marketing Strategy and Types of Consumer Decisions The process of problem recognition • The nature of problem recognition – – Desired state Actual state Copyright ª 2004 McGrawHill Australia Pty Ltd 3–8 The Process of Problem Recognition 3–9 The Process of Problem Recognition (cont.) 3–10 The Desire to Resolve Recognised Problems • Depends on two factors: The magnitude of the discrepancy between the desired state and the actual state The relative importance of the problem Copyrightê2004McGrawưHillAustraliaPtyLtd 311 Types of Consumer Problems Active problem Inactive problem Copyrightê2004McGrawưHillAustraliaPtyLtd 312 Types of Consumer Problems and Action Required • Routine problems – Expected, require immediate solution • Emergency problems – Not expected, require immediate solution • Planning problems – Expected, don’t require immediate solution • Evolving problems – Not expected, don’t require immediate solution Copyright ª 2004 McGrawHill Australia Pty Ltd 3–13 Non-Marketing Factors Affecting Problem Recognition 3–14 Factors that Influence the Desired State • Culture/social class, e.g cleanliness • Reference groups, e.g after graduation • Family/household, e.g family brands • Change in financial status, e.g retrenchment • Previous purchase decisions • Individual development • Motives: refer to Maslow’s needs • Emotions: seek positive experiences? • The situation Copyright ª 2004 McGrawHill Australia Pty Ltd 3–15 Factors Influencing the Actual State • Past decisions • Normal depletion • Product/brand performance • Individual development • Emotions • The efforts of consumer groups • The availability of products • The current situation Copyright ª 2004 McGrawHill Australia Pty Ltd 3–16 Brand Performance Many products need to perform on two levels: Instrumental performance Expressive performance Copyrightê2004McGrawưHillAustraliaPtyLtd 317 Marketing Strategy and Problem Recognition Measuring problem recognition activity analysis—study of meal preparation product analysis—problems using it? Copyright ª 2004 McGrawHill Australia Pty Ltd 3–18 Marketing Strategy and Problem Recognition (cont.) • Measuring problem recognition (cont.) problem analysis—product/brand solutions? human factors research—suit users emotion research—how people feel about it Copyrightê2004McGrawưHillAustraliaPtyLtd 319 Responding to Consumer Problems Activating problem recognition – generic problem e.g dairy foods – When the problem is latent or of low importance selective e.g one brand solution Copyright ª 2004 McGrawHill Australia Pty Ltd 3–20 An Active Attempt to Activate Problem Recognition 3–21 Responding to a Recognised Problem 3–22 Responding to Consumer Problems • Timing problem recognition e.g winter colds Copyrightê2004McGrawưHillAustraliaPtyLtd 323 Responding to Consumer Problems (cont.) Suppressing problem recognition – avoid upsetting habitual buyers – anticipate and counteract negatives Copyright ª 2004 McGrawHill Australia Pty Ltd 3–24 Next lecture… Chapter Information Search Copyright ª 2004 McGrawHill Australia Pty Ltd 3–25 ... Copyrightê2004McGrawưHillAustraliaPtyLtd 3 2 Types of Consumer Decisions • Problem recognition • Purchase involvement Copyrightê2004McGrawưHillAustraliaPtyLtd 33 Types of Consumer Decisions (cont.) Purchase... Copyright ª 2004 McGrawHill Australia Pty Ltd 3 5 Purchase Involvement and Types of Decision Making (cont.) 3 6 Purchase Involvement and Types of Decision Making (cont.) 3 7 Marketing Strategy and Types of Consumer Decisions... Copyrightê2004McGrawưHillAustraliaPtyLtd 31 1 Types of Consumer Problems Active problem Inactive problem Copyright ª 2004 McGrawHill Australia Pty Ltd 3 12 Types of Consumer Problems and Action Required