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BB Chapter Three: Problem Recognition

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BB Chapter Three: Problem Recognition

  1. 1. Chapter Three: Problem Recognition 3-1
  2. 2. Problem recognition An important stage of consumer decision making 3-2
  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 3-3
  4. 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? 3-4
  5. 5. Types of consumer decisions • Problem recognition • Purchase involvement 3-5
  6. 6. Types of Consumer Decisions Purchase involvement is the level of concern for, or interest in, the purchase process. Triggered by need to consider a particular purchase. A temporary state influenced by the interaction of individual, product, and situational characteristics. 3-6
  7. 7. Types of Consumer Decisions Product involvement or enduring involvement is very different from purchase involvement. A consumer may be very involved with a brand (e.g., Starbucks) or a product category, BUT… have low purchase involvement due to brand loyalty, time pressures, etc. 3-7
  8. 8. 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 3-8
  9. 9. Purchase involvement and types of decision making Low purchase High purchase involvement involvement Habitual Limited Extended decision decision decision making making making 1-9
  10. 10. Types of Decision Making Habitual Decision Making Habitual decision making, in effect involves no decision per making se. Go back to buy the same brand. Habitual decisions occur when there is very low involvement with the purchase. A completely habitual decision does not even include consideration of the “do not Consumer buys Campbell’s purchase” alternative. without considering other brands, its price, etc. 3-10
  11. 11. Types of Decision Making Limited Decision Making Limited decision making involves internal and limited external search, few alternatives, simple decision rules on a few attributes, and little post-purchase evaluation. Middle ground between habitual and extended decision making. Involves recognizing a problem for which there are several possible solutions. Decision based only on buying the cheapest rolls. 3-11
  12. 12. Types of Decision Making Extended Decision Making Extended decision making involves extensive internal and external search followed by a complex evaluation of multiple alternatives. It is a response to the high level of purchase involvement. During post-purchase evaluation, doubts are likely and a thorough evaluation takes place. Emotional decisions may involve substantial cognitive effort. 3-12
  13. 13. Purchase involvement and types of decision making (cont.) 3-13
  14. 14. The Process of Problem Recognition The Nature of Problem Recognition Problem recognition is the result of a gap between a desired state and an actual state sufficient to arouse and activate the decision process. An actual state is the way an individual perceives his/her feelings and situation to be at the present time. A desired state is the way an individual wants to feel or be at the present time. 3-14
  15. 15. Process of problem recognition 3-15
  16. 16. The Process of Problem Recognition The Nature of Problem Recognition Desire to resolve a particular problem depends on: 1. The magnitude of the discrepancy between the desired and actual states, and 2. The relative importance of the problem In general, importance is determined by how critical the problem is to maintenance of desired lifestyle. 3-16
  17. 17. Products are positioned as providing a potential solution eg. shampoo 3-17
  18. 18. Products are positioned as providing a potential solution eg. cough medicine 3-18
  19. 19. 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. 3-19
  20. 20. The Process of Problem Recognition Types of Consumer Problems Active Problem Inactive Problem An inactive problem is one of An active problem is one the which the consumer is not consumer is aware of or will aware. become aware of in normal course of events. Marketing strategy: strategy Marketing strategy: strategy Only require marketer to Marketer must convince convince consumers that its consumers that they have the brand is the superior solution. problem AND that their brand is a superior solution. 3-20
  21. 21. 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 3-21
  22. 22. Non-marketing factors affecting problem recognition 3-22
  23. 23. 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 3-23
  24. 24. 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 3-24
  25. 25. Uncontrollable Determinants of Problem Recognition Variety-seeking is a challenge to marketers because it means that consumers switch brands for reasons beyond a company’s control. Sensory-specific satiety – consumers get bored (satiated) with sensory attributes more than on non-sensory attributes. Offering variety on key sensory attributes can increase loyalty to the brand even if consumers Variety WITHIN brand can drive engage in variety seeking. loyalty in the face of variety seeking. 3-25
  26. 26. Marketing Strategy and Problem Recognition 1. Discovering Consumer Problems 2. Responding to Consumer Problems 3. Helping Consumers Recognize Problems 4. Suppressing Problem Recognition 3-26
  27. 27. Marketing Strategy and Problem Recognition Discovering Consumer Problems A wide variety of approaches are used to determine the problems consumers face. 1. Intuition - the most common, however, the problem identified may be of low importance to most consumers 2. Survey – asks relatively large numbers of individuals about the problems they are facing 3. Focus Groups – composed of 8 to 12 similar individuals brought together to discuss a particular topic; a moderator is present to keep the discussion moving and focused on the topic but otherwise free flowing 3-27
  28. 28. Product / brand performance Many products need to perform on two levels: • Instrumental performance • Expressive performance 3-28
  29. 29. 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 3-29
  30. 30. Marketing Strategy and Problem Recognition Discovering Consumer Problems Human Factors Research Human factors research attempts to determine human capabilities in areas such as vision, strength, response time, flexibility, and fatigue and the effect on these capabilities of lighting, temperature, and sound. Observational techniques such as slow-motion and time- lapse photography, video recording, and event recorders are particularly useful methods. This type of research can sometimes identify functional problems that consumers are unaware of. 3-30
  31. 31. Marketing Strategy and Problem Recognition Discovering Consumer Problems Emotion Research Marketers are increasingly conducting research on the role of emotions in problem recognition and resolution. Common approaches are focus group research and personal interviews that examine the emotions associate with certain problems. Critical in helping marketers anticipate consumer reaction to problems and train customer service personnel to respond appropriately. 3-31
  32. 32. Marketing strategy and problem recognition • Measuring problem recognition – Activity analysis—study of meal preparation – Product analysis—problems using it? 3-32
  33. 33. Marketing Strategy and Problem Recognition Discovering Consumer Problems Surveys and focus groups use one of the following approaches to problem identification: 1. Activity Analysis Focuses on a particular activity to determine what problems consumers encounter during the performance of the activity. 2. Product Analysis Examines the purchase or use of a particular product or brand. Consumers may be asked about problems associated with using a product or brand. 3. Problem Analysis Starts with a problem and asks which activities, products, or brand are associated with (or perhaps could eliminate) those problems 3-33
  34. 34. Marketing Strategy and Problem Recognition Responding to Consumer Problems Once a consumer problem is identified, the manager may structure the marketing mix to solve the problem. This can involve: • Developing a new product or altering an existing one • Modifying channels of distribution • Changing pricing policy, or • Revising advertising strategy 3-34
  35. 35. Responding to consumer problems • Activating problem recognition – Generic problem e.g. dairy foods when the problem is latent or of low importance – Selective problem recognition e.g. one brand solution 3-35
  36. 36. Marketing Strategy and Problem Recognition Helping Consumers Recognize Problems Generic versus Selective Problem Recognition Generic Problem Recognition Selective Problem Recognition • Involves a discrepancy that • Involves a discrepancy only a variety of brands within a one brand can solve product category can reduce • Firms attempt to cause selective problem • Increasing generic problem recognition to gain or recognition generally maintain market share results in an expansion of the total market 3-36
  37. 37. Responding to consumer problems • Influencing the desired state – Highlight unique features • Influencing perceptions of the desired state – Challenge customer to re-examine the existing state (‘good enough?’ • Timing problem recognition, e.g. winter colds
  38. 38. Marketing Strategy and Problem Recognition Helping Consumers Recognize Problems Approaches to Activating Problem Recognition How can a firm influence problem recognition? Recall that problem recognition is a function of (1) the importance, and (2) the magnitude of a discrepancy between the desired state and an existing state 3-38
  39. 39. An active attempt to activate problem recognition 3-39
  40. 40. Marketing Strategy and Problem Recognition Helping Consumers Recognize Problems Approaches to Activating Problem Recognition Many marketing efforts attempt to influence the desired state, often advertising the benefits their products will provide and hoping that these benefits will become desired by consumers. It is also possible to influence perceptions of the existing state through advertisements. Critics frequently question the ethics of activating problem recognition, especially for problems related to status or social acceptance. 3-40
  41. 41. Marketing Strategy and Problem Recognition Helping Consumers Recognize Problems The Timing of Problem Recognition Consumers often recognize problems at times when purchasing a solution is difficult or impossible, such as • deciding to purchase a generator during a hurricane • becoming aware of the need for health insurance after being hospitalized A common marketing strategy is to trigger problem recognition in advance of the actual problem 3-41
  42. 42. Responding to consumer problems (cont.) • Suppressing problem recognition – Avoid upsetting habitual buyers – Anticipate and counteract negatives 3-42
  43. 43. Marketing Strategy and Problem Recognition Helping Consumers Recognize Problems Suppressing Problem Recognition Occasionally information is introduced in the market place that triggers problem recognition that some marketers prefer to avoid. Obviously marketers do not want their current customers to recognize problems with their brands. Effective quality control and distribution (limited out-of- stock situations) are important in this effort. Packages and package inserts that assure the consumer of the wisdom of their purchase are also common. 3-43
  44. 44. Summary of topics in this chapter • 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? 3-44