Searching Cognitive Dissonance Problem Solving – Search Alternatives Set Theory Week 1 Lecture 3

Questions Faced By Consumers Are veggie burgers actually healthy? What makeup should you use to get an “even” skin tone? Do I get any useful benefits from spending more than 1300 RMB on a digital watch? Should I colour my hair?” What should I do? Is my car mechanic honest? Should I join Facebook? Should I give my wife roses, chocolate, or a new iron?

Consumer Problems and Recognition Consumer problem: Discrepancy between ideal and actual state--e.g., consumer: Has insufficient hair Is hungry Has run out of ink in his or her inkjet cartridge Problems can be solved in several ways--e.g., stress reduction <----- vacation, movie, hot bath, medication

CONSUMER DECISIONS: Theory and Reality in Consumer Buying PROBLEM RECOGNITION INFORMATION SEARCH EVALUATION OF ALTERNATIVES PURCHASE POSTPURCHASE EVALUATION/ BEHAVIORS Theory Complications

Cognitive Dissonance WIKIPEDIA accessed 04092012 Cognitive dissonance is the term used in modern psychology to describe the discomfort felt by a person seeking to hold two or more conflicting cognitions (e.g., ideas, beliefs, values, emotional reactions) simultaneously. In a state of dissonance, people may feel surprise, dread, guilt, anger, or embarrassment.[1] The theory of cognitive dissonance in social psychology proposes that people have a motivational drive to reduce dissonance by altering existing cognitions, adding new ones to create a consistent belief system, or alternatively by reducing the importance of any one of the dissonant elements.[1] An example of this would be the conflict between wanting to smoke and knowing that smoking is unhealthy; a person may try to change their feelings about the odds that they will actually suffer the consequences, or they might add the consonant element that the short term benefits of smoking outweigh the long term harm. The need to avoid cognitive dissonance may bias one towards a certain decision even though other factors favour an alternative.[2] WIKIPEDIA accessed 04092012

Consumer Search and Evaluation

Stages of Search and Choice Information Search – seeking values Evaluation of Alternatives – assessing value Purchase decision – buying value Post Purchase – value in use

Three Problem Solving Variants Routine Limited Extended

Routine Problem Solving Almost a Habit Little effort in buying process Low priced, frequently used products

Limited Problem Solving Moderate effort Buyer has little time or effort to spend

Extended Problem Solving All stages of decision making process used Time and effort spent on search and evaluation High involvement purchases

Information Search Internal - memory of previous External experiences External - personal sources - public sources - marketing sources

Information Search aids Consumer by: Suggesting purchase criteria Identifying possible brand names Developing value perceptions

Alternative Evaluation – Assessing Value Consumers evaluation criteria represent Objective / functional attributes of product Symbolic/subjective factors

Purchase Decision – Buying Value Three possibilities: From whom to Buy When to Buy Do Not Buy

From Whom… Terms of sale Past experience of seller Returns policy

When To Buy… Store experience Time pressure Sales process

Five Situational Influences Purchase Task Social surroundings Physical surroundings Temporal effects States (Mood)

Problem Solving – Search Alternatives Internal Search External Search Limited Decision Making Extended Decision Making Ongoing search for pleasure as part of a hobby and information for future use – Opinion leaders

Inert Set Neutral Brands Set Theory All Brands Awareness Set Evoked Set Acceptable Brands Inept Set Unacceptable Brands Inert Set Neutral Brands Unawareness Set

Options Identified and Considered UNIVERSAL SET All possible options RETRIEVED SET Options that readily come to mind EVOKED SET Options that will be considered by the consumer Note: Retrieved and evoked sets will vary among different consumers

Approaches to Search for Problem Solutions INTERNAL Long Term Memory Remembering Experience We now turn to the consumer’s search for potential solutions to the problems that he or she is facing. Search strategies can be divided into those involving internal and external search, although consumers may use both in some combination. Internal search is based on the consumer’s memory and his or her thinking processes. In the case of a motorist stranded with a blown tire, for example, he or she may remember preferred provider of replacement tires and thus go to that one. An implication of this reality is that it may pay to advertise to establish an identity among potential future consumers. For example, bail bonds people will advertise on TV to people, suggesting a solution if they, for some reason, should find themselves in jail. Similarly, Midas Mufflers and various other auto service providers attempt to create internal beliefs about the benefits of patronizing their establishments if and when the need arises. Aamco Transmissions advertises that half the half the transmissions they see do not need to be replaced, presumably implying that it is safer to take a car there than to ostensibly less skilled competitors. The marketer, however, faces some significant problems in creating this kind of awareness. First, many consumers, not readily expecting to encounter a need for the products and services in question, may have little motivation to process and store the information. Secondly, recalling the relevant information may be difficult as need arises. External search involves the consultation of outside sources, ranging from friends and acquaintances to the yellow pages and the media. (We will revisit this issue in Chapter 18, when we discuss, within the context of the diffusion of innovation, which EXTERNAL Word of mouth, Opinion leaders, media, internet – types of sites, store visits, - sales people, POS, Trial if possible CATALOG

Evaluative Criteria May be part of the search process. Refining of needs EG Digital Camera. Set theory before.... Desired Characteristics. Specifically and general aspects.

Evaluative Criteria -Specifically Technical specification.... Performance Features Price / Cost of ownership Desired Characteristics. Other aspects >>>>

Evaluative criteria - Wider aspects. Penult Visibility of purchase Emotional Purchase Maslow aspects .

POSTPURCHASE EVALUATION/BEHAVIORS Review decision Information sources Learn information Update memory

Moore’s Law Computer power growing exponentially Prices remaining stable if not falling Equals better value but when does the consumer buy and how does this impact upon new products and profits and the marketing mix generally?

Search Exercise Interview a person to find out what they are considering purchasing and ask them to tell you about the evaluative criteria they have – this will mean that you will have to list the possible features / and match these to their needs. In other words what do they want to do with the product. EG Camera. (Electric) Bike, Trainers, MP3 player, Notebook computer