Chapter 4: Information search The following aspects will be discussed in relation to information search. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information search An important stage of consumer decision making A reminder of the process. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Chapter 4: Information search Nature of information search Key types and sources of information Difference between evoked, inept and inert sets of brands Why consumers engage in information search? Internet as an information source Factors that affect the amount of external information search Marketing strategies based on different patterns of search behaviour The following aspects will be discussed in relation to information search. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information search Internal versus external search Internal search Use of information from memory External search The method used if a resolution to a problem is not reached through the search process The search process is focused on external stimuli relevant to solving the problem Following problem recognition, consumers may engage in varying degrees of internal and/or external search, depending on the type of purchase. (See pages 93) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information search Ongoing search or exploratory research Search for information conducted to acquire information for later use Because the process itself is pleasurable Ongoing search or exploratory research. (Note definitions on page 94.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information search in consumer decisions Explicit external information search after problem recognition is limited. This emphasises the need to communicate effectively with consumers prior to problem recognition. Characteristics of the market, the product, the consumer and the situation interact to influence the level of search. (See page 94) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Suggesting evaluative criteria that match the brand’s strengths Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Brands in initial awareness set Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Categories of decision alternatives One way of considering the possibilities is to think about purchasing a television set. As an individual consumer you will not be aware of all brands of TV. The ones that you know make up the awareness set. Within these there are likely to be brands that you believe are not worthy of any further consideration—this is the inept set and these brands will be avoided. Within the others there will be brands that you will consider further—the evoked set—and the inert set: brands that you are indifferent to and would only consider as a back-up brand if the others were not available. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Awareness and evoked sets for various products Most consumers, when faced with a problem, can recall a limited number of brands that they feel are probably acceptable solutions. These acceptable brands, the evoked set, are the initial ones the consumer seeks further information about during the subsequent internal and external search process. Therefore marketers should be very concerned that their brands fall within the evoked set of brands. It is noteworthy that only about a third of the ‘awareness’ brands are within the evoked set of brands. (See pages 97–99) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information sources Impersonal Personal Commercial advertising, salespeople Non- commercial general purpose media social others Consumer internal information (information stored in memory) may have been actively acquired in previous searches and through low-involvement learning from impersonal sources, such as advertising. In addition to their own memory, consumers seek information from four main types of external sources. These can include personal sources, such as friends and family; independent sources such as consumer groups and government departments; and marketing sources such as direct product inspection or trial. The fact that only one of these is under direct control of the marketer suggests that product performance and customer satisfaction are important aspects. (See page 95.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information sources for a purchase decision Internal information is the primary source used by the majority of consumers most of the time. This is for the habitual and limited decision making. Some of this information may have been actively acquired through past searches and personal experience. External information can be obtained through independent groups, such as consumer groups, personal contacts, marketing sources (such as advertising or sales staff), and experimentally (e.g. by trying the product). (See page 99.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Sources of information for services While marketing influences the information search for services information, research shows that personal sources are very important. (See page 97-99.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information search on the internet 2006 survey – 64.5% of Australian population online About 35-75% increase in online use Internet is the most popular information source for students (2003 survey) Over half of e-shoppers are women, taking over from males 73% of those with Internet at work use it every morning Many changes have occurred recently in the way consumers gain access to information. With two-thirds of the Australian population accessing the Internet at least once a month, this is becoming an important source, and Internet advertising expenditure has also greatly increased: it has almost doubled in the last 2 years. The most popular use is still to access information, however, online shopping is increasing as consumers gain more confidence in the security of their financial details (eg. Online banking has increased by 75%). The gender balance is changing from male dominance. The net is quickly taking over as the daily ‘newspaper’: 73% of people with access use it on a daily basis. (See page 100 for the range of activities that Australians use the Internet for.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Marketing strategy and information search on the internet Companies need to ask: Should we have a website? What is the purpose of the site? Information only Company and product/service information To actively attract customers A shopping site (See page 99 for details. Examples can be used in the lecture to show the range of uses.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Amount of external information search Measures used: No. of stores visited No. of alternatives considered No. of personal sources used Overall or combination measures See page 99-101 for discussion. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Amount of external search for appliances See page 100 Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Classification of searchers Non-searchers Limited information searchers Extended information searchers See page 103 for definitions of these. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Information sources used to select professional services See page 104. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Costs vs benefits of external search It is often suggested that consumers should engage in relatively extensive external search prior to purchasing an item. However, this view ignores the fact that information search is not free. It takes time, energy and money, and can often require giving up more desirable activities. Therefore, consumers engage in external search only to the extent that the expected benefits, such as a lower price or a more satisfactory purchase, outweigh the expected costs. (See page 105.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Factors affecting external search Influencing factor Increasing the factor causes search to: 1. Market characteristics a) No. of alternatives Increase b) Price range c) Store distribution d) Information availability i) Advertising ii) POP Displays iii) Sales personnel iv) Packaging v) Experienced consumers vi) Independent sources Marketing characteristics tend to increase the external search for information. The role of the marketer is to anticipate this and provide the relevant information through these sources. (See page 106) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Newspaper ads increase readers’ awareness of sales and in-store promotions Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Factors affecting external search (cont) Influencing factor Increasing the factor causes search to: 2. Product characteristics a) Price Increase b) Differentiation c) Positive products Depending on the product characteristics, consumers tend to search more for expensive items, those products that are differentiated (usually the expensive items), and items that they see as being worthwhile, such as clothes, speciality food items rather than ordinary supermarket items, sports equipment, and the like. (See pages 108-9.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Factors affecting external search (cont) Influencing factor Increasing the factor causes search to: 3. Consumer characteristics a) Learning and experience Decrease b) Shopping orientation Mixed c) Social status Increase d) Age, gender, household lifecycle e) Product involvement f) Perceived risk More experience tends to shorten the search. For example a person who has purchased several computers or cars may reduce the search time to a basic level as opposed to someone new to the market who may conduct an extensive search. Social status and perceived risk tend to increase the search effort. (See page 109-10.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Factors affecting external search (cont) Influencing factor Increasing the factor causes search to: 4. Situational characteristics a) Time availability Increase b) Purchase for self Decrease c) Pleasant surroundings d) Social surroundings Mixed e) Physical / mental energy As we have discussed in a previous lecture, situational influences affect the consumer’s external search behaviour. Time availability, surroundings and the inherent energy of consumers all tend to increase the amount of searching. Individuals tend to search less for products intended for themselves. The social surroundings can have a mixed effect, depending on whether they are a distraction or whether there are benefits from extending the search, e.g. they may impress friends by their thoroughness! (See page 110.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Marketing strategies based on information-search patterns Target market decision making pattern Brand position Habitual decision making (no search) Limited decision making (limited search) (extensive search) Brand in evoked set Maintenance strategy Capture strategy Preference strategy Brand in not evoked set Disrupt strategy Intercept strategy Acceptance strategy Marketers can use this chart to guide the selection of strategies. Whether the brand is in the evoked set or not is a major determinant. Another determinant is where the target market’s decision-making lies on the continuum from ‘no search’ to ‘extended search’. This allows us to suggest a number of possible strategies (See page 111.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Strategies (in evoked set) Maintenance strategy Defend against disruptive tactics Constant activity + interest Capture strategy Constant supply + quality Continue limited search Preference strategy Search locations must be anticipated, e.g. chemists POP + sales assistance Know where they search A maintenance strategy is suggested if the product is in the evoked set and consumers are habitual buyers. An example could be a leading fast food company who use this strategy by introducing chicken products and salad products to counteract moves by the competition. A capture strategy relies on retaining consumers by continuing to supply consistent product and encouraging them to continue with a limited search pattern. An extended search is discouraged, as they may find a better product! A preference strategy is used when searching is likely. The ‘right’ information and advice is provided wherever they are likely to search, e.g. sales assistants need to be briefed to direct them to your brand (See pages 110–114.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Firms use a capture strategy when the brand is within the market’s evoked set. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Strategies (not in evoked set) Disrupt strategy Attention-seeking ads Free samples or bonus encouraging trial Intercept strategy Must attract attention POP display Product improvements, etc. Acceptance strategy Advertise but don’t ‘sell’ the brand Encourage consumer to seek information If the product is not in the evoked set, then moves are needed to try to attract the consumers to a position where they are likely to consider purchasing this product. If they are not searching then a disrupt strategy is possible. Try to attract attention to the brand and offer free samples so that they ‘experience’ the product. If not in the evoked set and consumers have limited search then the strategy should be to encourage consumers to learn about these brands (intercept strategy). For example, information about product improvements may provide this incentive. An acceptance strategy involves encouraging the consumer to seek information about this brand and possibly learn why it is superior. (See pages 107–111.) Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Firms engage in a disrupt strategy to disturb the habitual decision process of competitor’s customers Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Summary What is the nature of information search? Key types and sources of information? Difference between evoked, inept and inert sets of brands Why consumers engage in information search? How is the internet used as an information source? What factors affect the amount of external information search? How can marketing strategies be based on different patterns of search behaviour? These questions highlight the important aspects in relation to information search. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney

Next Lecture Chapter 5: Evaluating and selecting alternatives Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney