related toconsumer psychology

1. Problem Recognition and
Information Search
Naveen Kashyap, PhD
Indian Institute of Technology Guwahati
Email: naveen.kashyap@iitg.ernet.in

2. Consumer Decision Process Action Options
• For a high-involvement product, the consumer will
likely use the five EKB model decision process steps
1.Begin the process and stay with it until complete
2.Start and stop and then complete
3.Start and stop and never finish
4.Start and, because of marketplace changes, return
to an earlier step
• For low involvement, the consumer typically goes
directly from problem recognition to choice

3. Problem Recognition
1. We recognize that we need something
2. We start the process to find the product or service
that will deliver the benefits to fill the need or solve
the problem

4. Problem Recognition: Actual State
versus Desired State
•Psychological process through which we evaluate the
difference between our actual state and our desired state
•Comparison of our current need or benefits state with
what we would like it to be
•The greater the “perceived distance” between these two,
the more clearly the consumer recognizes potential need

5. Problem Recognition: Opportunity
Recognition
•You are completely satisfied with your old camera
•You spot an offer for powerful lens and start imagining
•The consumer does not perceive a problem, but perceives
an opportunity that leads to a comparison between actual
state and a new desired state

6. Influences on Problem Recognition
• Situational influences
•Replace products that are broken, lost, or worn out
•Product acquisition leads consumers to recognize new
needs
•Changed circumstances lead us to perceive new needs

7. Influences on Problem Recognition
• Consumer influences
• Actual state consumers look to existing goods and services
• Desired state consumers look to new products
Sense of drive to action (motivation) a consumer experiences
once a problem or need has been recognized
1. Optimize satisfaction 4. Resolve conflict
2. Prevent possible future problem 5. Maintain Satisfaction
3. Escape from a problem

8. Influences on Problem Recognition
• Marketing Influences
• Marketing information may lead the consumer to reevaluate
his or her actual and desired states
• Price information can be influential
• Promotional activities: advertising, coupons, free offers,
sweepstakes, product demonstrations, rebates
• Product or service developments can trigger a reassessment
of actual and desired states
• Place actions can trigger need recognition

9. Information Search
•Marketplace information is all around us
•Consumers can and do search for and find information
on products in many ways
•Different consumers look for differing amounts and
types of information
•Consumers often combine their information search
with alternative evaluation

10. If We Know ...
1. Why consumers are searching for information
2. Where they are looking
3. What information they are looking for
4. How extensively they are willing to search
• We can identify potential customers and their information needs

11. Types of Information Search
• Prepurchase information search
• Directed information searches are purposeful & deliberate
• Browsing may eventually lead to purchasing
• Accidental information search: a consumer who is not
looking for anything in particular is drawn to a product
• Postpurchase information search
• A consumer who has already made a purchase continues to
gather information and/or evaluates other options
• Ongoing search
• Consumers observe and stay current with what is happening

12. Internal Information Search
•Involves no sources other than the consumer’s own
memory, knowledge, and experience
•Experts are consumers who have gained extensive prior
knowledge through experience and training
•Novices are consumers who have little or no prior
knowledge or experience with a product or service
category

13. Quality of Internal Information
and the Need for External Search
Factor Status
Need for External
Search
Satisfaction with past
experience High None to low
Time since last decision Long High
Changes in alternatives Many High
Problem is new Yes High
Quality of relevant
information High None to low
Quantity of relevant
information Sufficient None to low

14. External Information Search
• Situational Influences
Components are ability to search, motivation to search,
costs of search, and benefits of search
• Perceived value of the search (Value of Information)
• Ease of acquiring and using information
• Information control: Consumers wish to have some control over
what information they are exposed to, how long it will be
presented to them, and what information will follow

15. Situational Influences
• Cost of External Search (Benefit vs Price)
• Financial
• Time
• Decision delay
• Physical
• Psychological
• Information-overload
External Information Search

16. Two Types of Capital
•Information capital is information about product
attributes, benefits, and prices learned by a consumer
in the past that can still be used in the current
situation
•Skill capital is related to how to search. Consumers
who have learned how to search from past experience
will enjoy lower search costs, and the amount of
information gathered will also be higher

17. Situational Influence
Actual or Perceived Risk (Purchase decision related risk)
1. Functional or performance
2. Financial
3. Psychological
4. Social
5. Physiological
6. Time
7. Linked-decision
External Information Search

18. Consumer Influences
• Quality of internal information (reliable, trust, quantity, useful)
• Need to acquire information (Inverted U, Knowledge & Extent)
• Confidence in decision-making ability (consumer influence)
• Locus of control theory (consumer influence)
• Externals believe that events or outcomes are outside their
control
• Internals believe that they are at least in part responsible for
the outcome of their actions
External Information Search

19. Product Influence
Type of Goods or Services Sought
1. Specialty goods and services (strong preference)
2. Shopping goods and services (major purchase)
3. Convenience goods and services (every day goods)
• Search products: most essential attributes and benefits can
easily be evaluated prior to the purchase
• Experience products: the evaluation cost is so high that
direct experience results in the lowest expenditure of
resources
External Information Search

20. Purchase Decision Influences
Characteristics of the Purchase Decision
1. Extent to which the number of possible solutions is limited
• If the acceptable characteristics sought are narrowly defined,
consumers are likely to accept the need for an extensive search
2. Need for trial
• If a product needs to be tried out before it is purchased,
consumers are more likely to engage in external search
3. Difficulty of trial
• When prepurchase trial is difficult or impossible, consumers
search for a reliable, quality supplier
External Information Search

21. External Search Strategy (Limiting Search Activity)
• Using sets: groups used to limit external search and alternative
evaluation
• Universal set—all options to which the consumer has access
• Retrieval set—consumer has front-of-mind awareness
• Relevant or consideration (evoked) set—consumer accepts
• Irrelevant information impact
• Consumers selectively look for “confirming” information that the
product or service delivers the desired benefits
• Information deemed “irrelevant” by its target market(s) will
weaken consumer beliefs concerning the product’s ability “to
deliver”

22. Marketplace Information Sources
General/Independent
Sources
Marketer-Controlled/
Advocate Sources
Face-to-face Personal influence Salespersons
Telemarketing
Media General purpose Mass advertising media
In-store information
In-store display
Package labels

23. Sources and Uses of
Information in “U-Commerce”
• U-commerce (Uber-commerce) flows out of the hyper-networking
of computers
1. Ubiquity: networked computers are everywhere
2. Universality: access available anywhere
3. Uniqueness: customized to consumer needs
4. Unison or unified: change one, change them all

24. Believability of Sources of
Information on Products and Services
• Consumer Reports (58 percent)
• Recommendation from a friend (52 percent)
• Direct-mail piece (4 percent)
• Celebrity endorsement (3 percent)