1. 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 3-1 Chapter 3: Problem recognition

2. 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 3-2 Problem recognition An important stage of consumer decision making

3. 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 3-3 Problem recognition Nature of problem recognition Difference between habitual, limited and extended decision making Methods for measuring problem recognition Uncontrollable factors that effect problem recognition Marketing strategies based on problem recognition

4. 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 3-4 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?

5. 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 3-5 Types of consumer decisions Problem recognition Purchase involvement

6. 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 3-6 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

7. 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 3-7 Purchase involvement and types of decision making Low purchase involvement High purchase involvement Habitual decision making Limited decision making Extended decision making

8. Purchase involvement and types of decision making (cont.)

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 3-9 Marketing strategy and types of consumer decisions The process of problem recognition The nature of problem recognition – Desired state – Actual state

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 3-10 Process of problem recognition

11. 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 3-11 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

12. 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 3-12 Products are positioned as providing a potential solution eg. shampoo

13. 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 3-13 Products are positioned as providing a potential solution eg. cough medicine

14. 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 3-14 Types of consumer problems Active problem – A problem the consumer is aware of, or will become aware of, in the normal course of events. Inactive problem – A problem of which the consumer is not yet aware.

15. 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 3-15 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 Types of consumer problems and action required

16. 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 3-16 Non-marketing factors affecting problem recognition

17. 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 3-17 Factors that influence the desired state Culture/social class, e.g. importance of cleanliness Reference groups, e.g. a change 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

18. 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 3-18 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

19. 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 3-19 Product / brand performance Many products need to perform on two levels: Instrumental performance Expressive performance

20. 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 3-20 Marketing strategy and problem recognition Measuring problem recognition –Activity analysis—study of meal preparation –Product analysis—problems using it?

21. 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 3-21 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

22. 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 3-22 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

23. 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 3-23 An active attempt to activate problem recognition

24. 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 3-24 Responding to a recognised problem

25. 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 3-25 Responding to consumer problems Timing problem recognition, e.g. winter colds

26. 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 3-26 Responding to consumer problems (cont.) Suppressing problem recognition – Avoid upsetting habitual buyers – Anticipate and counteract negatives

27. 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 3-27 Summary What is the nature of problem recognition? What is the difference between habitual, limited and extended decision making? What are the key methods for measuring problem recognition? What are the uncontrollable factors that effect problem recognition? What marketing strategies can be used to activate problem recognition?

28. 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 3-28 Next lecture Chapter 4: Information Search