1. PROBLEM RECOGNITION AND INFORMATION SEARCH

2. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 2 True or False? 1.If you have bad breath, you cannot smell it yourself. 2.If you eat a balanced diet, you do not need vitamin supplements. 3.Using a razor with five blades will reduce the likelihood of cutting yourself and will result in less skin irritation. 4.Dell Computers tend to be of higher quality than those made by HP and Sony. 5.Rust stains on clothes can be removed with the use of lemon juice. Bleach actually makes these stains worse.

3. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 3 Questions Faced By Consumers Are soft drinks sweetened with high fructose corn syrup worse than those sweetened with cane sugar? Are veggie burgers actually healthy? Do I get any useful benefits from spending more than $125 on a digital camera? Is my mechanic honest? Should I give my wife roses, chocolate, or software?

4. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 4 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

5. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 5 CONSUMER DECISIONS: Theory and Reality in Consumer Buying INFORMATION SEARCH PROBLEM RECOGNITION EVALUATION OF ALTERNATIVES PURCHASE POSTPURCHASE EVALUATION/ BEHAVIORS Theory Complications

6. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 6 Post Purchase Behavior

7. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 7 Usefulness of the Model of Consumer Decision Making Most useful to determine how search for a particular consumer need or a product category may systematically differ from others –Importance of different steps –What may happen in each step (e.g., brand switching) –Extent of overlap of stages –Likeliness of different types of post purchase behaviors (e.g., WOM, positive or negative review, returning product) Not as useful for assessing repeated search for frequently used products

8. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 8 Problem Recognition— Implications Triggering problem recognition –Making the consumer aware of a discrepancy that he or she may not have consciously considered—e.g., Bacteria on kitchen counters (cross-contamination of chicken and salad) Clothes can get cleaner “There is an easier way to do this” Creating new ideal –Fashion Addressing denial

9. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 9 Approaches to Search for Problem Solutions INTERNAL EXTERNAL Memory Thinking Word of mouth, media, store visits, trial

10. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 10 Internal Search: Issues Brand recall Consideration set Attribute recall Recall of evaluations Recall of experiences Limitations

11. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 11 Factors Affecting Inclusion Into the Consideration Set Prototypicality Brand familiarity Goal and usage situations Brand preference Retrieval cues (and triggers)

12. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 12 Recall of Attributes-- Determinants Accessibility/availability Diagnosticity—the extent to which the information is believed to be useful in making a good choice Salience—the extent to which the information is emphasized, prominent, or otherwise notable Vividness Goals –Spreading activation in the Associative Network of Knowledge may trigger relevant attributes

13. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 13 Internal Search—Limitations Confirmation bias Inhibition of information Mood

14. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 14 External Search—Issues Information sources –Perceived value –Quality –Ease of access –Ease of understanding Information overload –Coping strategies “Cancelling out” seemingly equivalent factors Organization Heuristics –Turning quantitative info into qualitative ideas Scope of search –Motivation –Ability –Opportunity Information type Accuracy

15. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 15 External Search—Sources Retailer –Display –Online content Reviews Comparisons Media/social media –Manufacturer generated –Retailer generated –Consumer generated Internet—may or may not be a quality source Interpersonal/WOM Independent (e.g., books) Experiential (trial)

16. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 16 Alternative Specificity and Information Currency Rapid developments in some product categories (e.g., computers) result in rapid new product introduction Model names and numbers may last for only a limited period of time Reviews may be available only for selected models; some reviews may be for earlier models Submodels (e.g., automobile versions) Problems that are fixed without model renaming Difficulties in matching the exact model –Models made “exclusively” for specific retailers (but very similar to other ones) –Large numbers of models for specific product lines (e.g., notebook computers—but then the same “model” may come in different configurations) Model names that endure despite large year-to-year changes –Automobile names –Intel i3, i5, i7 chips of different “generations”

17. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 17 Internet Search Type of search –Search engine “Organic” results Sponsored results –Review site (e.g., CNET) Professional review Consumer reviews Combinations –Consumer comments on merchant site (e.g., Amazon) Vocabulary used and natural language search Search engine rankings Paid searches “Fake review” sites

18. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 18 Scope of Search—Determinants Motivation –Involvement and perceived risk –Perceived costs and benefits –Consideration set –Relative brand uncertainty –Attitude toward search –Discrepancy of information Ability –Knowledge –Cognitive abilities –Demographics Opportunity –Amount of info available –Information format –Time availability –Number of items being chosen

19. MKT 450 PROBLEM RECOGNITION AND INFORMATION SEARCH Lars Perner, Instructor 19 External Search Information Type –Brand name –Price information –Attribute Information Objective (e.g., specifications) Subjective (e.g., durability, ease of use, quality) –Negative information is seen as more diagnostic (i.e., accurate in predicting performance) Accuracy –Confirmation of existing biases –Reliance on inaccurate information