Description
Problem recognition is that result when there is a difference between one's desired state and one's actual/current state i.e. when consumer recognizes a problem or a need e.g. Kathy may realize that her best suit doesn’t look contemporary any more or, Dan may recognize that his personal computer is not performing as well as he thought it should.
Basic Model of Consumer Decision Making
Problem Recognition (Motivation)
Problem recognition is that result when there is a difference between one's desired state
and one's actual/current state i.e. when consumer recognizes a problem or a need e.g. Kathy may
realize that her best suit doesn?t look contemporary any more or, Dan may recognize that his
personal computer is not performing as well as he thought it should. These are the kinds of
problem that we as consumers encounter all the time. When we find out a difference between
the actual state and a desired state, a problem is recognised. When we find a problem, we
usually try to solve the problem. The word motivation means "to stimulate toward action," seeing
the difference in his/her actual and desired state the consumer is „motivated? to take action i.e.
consumers are motivated to address this discrepancy and hence they commence the buying
process.
Sources of problem recognition include:
? An item is out of stock
? Dissatisfaction with a current product or service
? Consumer needs and wants
? Related products/purchases
? Marketer-induced
I nformation Search (Perception)
When a consumer discovers a problem, he/she is likely to search for information
regarding what products he/she can use to satisfy his/her need, e.g. Dan may simply pay more
attention to product information of a personal computer. He becomes more attentive to computer
ads, computers purchased by his friends, and peer conversations about computers. Or, he may
more actively seek information by visiting stores, talking to friends, or reading computer
magazines, among others. Through gathering information, the consumer learns more about some
brands that compete in the market and their features and characteristics. Theoretically, there is a
total set of brands available to Dan, but he will become aware of only a subset of the brands
(awareness set) in the market. Some of these brands may satisfy his initial buying criteria, such
as price and processing speed (consideration set). As Dan proceeds to more information search,
only a few will remain as strong candidates (choice set).
Once the consumer has recognised a problem, they search for information on products
and services that can solve that problem. Consumers undertake both an internal (memory) and an
external search.
Sources of information include:
? Personal sources
? Commercial sources
? Public sources
? Personal experience
The relevant internal psychological process that is associated with information search is
perception. Perception is defined as 'the process by which an individual receives, selects,
organizes, and interprets information to create a meaningful picture of the world', which in this
case means the picture of the product.
Evaluation and Selection of Alternatives (Attitude Formation)
How does the consumer process competitive brand information and evaluate the value of
the brands? Unfortunately there is no single, simple evaluation process applied by all consumers
or by one consumer in all buying situations.
One dominant view, however, is to see the evaluation process as being cognitively driven
and rational. Under this view, a consumer is trying to solve the problem and ultimately
satisfying his/her need. In other words, he/she will look for problem-solving benefits from the
product. The consumer, then, looks for products with a certain set of attributes that deliver the
benefits. Thus, the consumer sees each product as a bundle of attributes with different levels of
ability of delivering the problem solving benefits to satisfy his/her need. The distinctions among
the need, benefits, and attributes are very important. One useful way to organize the
relationships among the three is a hierarchical one (Figure 1). Although simplified, Figure 1 is
an example of how a bundle of attributes (i.e., a product or, more specifically, personal
computer) relates to the benefits and underlying needs of Dan.
Figure 1: Hierarchical Views of Needs, Benefits, and Attributes
From this figure and the preceding discussion, one might recognize that the product
attributes are relevant and important only to the extent that they lead to a certain set of benefits.
Likewise, benefits are meaningful only if they can address the problem and be instrumental to
satisfy the underlying need – as underlying needs are often personal, consumers differ as to their
beliefs about what product benefits and attributes are more (or less) important and relevant in
satisfying their needs. Based on their personal judgment on importance of benefits and
attributes, consumers develop a set of attitudes (or preferences) toward the various brands. One
may express his/her preferences of the brands in terms of ranking, probability of choice, and so
forth. What actually happens in this stage is; the consumer compares the brands and products that
are in their consideration set.
Underlying Needs
Benefits
Attributes
Size
Portability
Price
CPU Speed
Computational
Horse
Economical
Hard Drive Size
Software
Bundle
Helps Me Survive
SIMSREE MBA Program
Doesn?t Break
Down
Brand
Reputation
Warranty
Globe Net
Ready
Now, the question that comes to my mind here is – How can the marketing organisations
increase the likelihood that their brand is part of the consumer's consideration set?
Consumers evaluate alternatives in terms of the functional and psychological benefits
that they offer. The marketing organisation needs to understand what benefits consumers are
seeking and therefore which attributes are most important in terms of making a decision. The
relevant internal psychological process that is associated with the alternative evaluation stage is
attitude formation. Attitudes are 'learned predispositions' towards an object. Attitudes comprise
both cognitive and affective elements - that is both what you think and how you feel about
something. The multi-attribute attitude model explains how consumers evaluate alternatives on a
range of attributes. There are a number of strategies that can be used to influence the process
(attitude change strategies). Finally, there is a range of ways that consumers apply criteria to
make decisions. The marketing organisations should know how consumers evaluate alternatives
on salient or important attributes and make their buying.
Purchase decision (I ntegration)
To actually implement the purchase decision, however, a consumer needs to select both
specific items (brands) and specific outlets (where to buy) to resolve the problems. There are, in
fact, three ways these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3)
outlet first, item second. In many situations, consumers engage in a simultaneous selection
process of stores and brands. For example, in Dan?s personal computer case, he may select a set
of brands based on both the product?s technical features (attributes) and availability of brands in
the computer stores and mail-order catalogs he knows well. It is also possible, that he decides
where to buy (e.g., House of PC?s in his neighborhood) and then chooses one or two brands the
store carries. Once the brand and outlet have been decided, the consumer moves on to the
transaction (“buying”).
Sometimes purchase intention does not result in an actual purchase. The marketing
organisation must facilitate the consumer to act on their purchase intention. The provision of
credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to
receive a premium or enter a competition may provide an incentive to buy now. The relevant
internal psychological process that is associated with purchase decision is integration.
Post-purchase evaluation (Learning)
There should be a feedback loop, importance of the post purchase evaluation and that the
post purchase evaluation is the key due to its influences on future purchase patterns.
Post-purchase evaluation processes are directly influenced by the type of preceding
decision-making process. Directly relevant here is the level of purchase involvement of the
consumer. Purchase involvement is often referred to as “the level of concern for or interest in
the purchase”
situation, and it determines how extensively the consumer searches information in
making a purchase decision. Although purchase involvement is viewed as a continuum (from
low to high), it is useful to consider two extreme cases here. Suppose one buys a certain brand
of product (e.g., Diet Pepsi) as a matter of habit (habitual purchase). For him/her, buying a cola
drink is a very low purchase involvement situation, and he/she is not likely to search and
evaluate product information extensively.
In such a case, the consumer would simply purchase, consume and/or dispose of the
product with very limited post-purchase evaluation, and generally maintain a high level of repeat
purchase motivation.
Figure 2 Low I nvolvement Purchase
Purchase Product Use
Simple
Evaluation
Disposition
Repeat Purchase
Motivation
Figure3 Elaborate Post-purchase Evaluation
According to the research, the likelihood of experiencing this kind of dissonance and the
magnitude of it is a function of:
? The degree of commitment or irrevocability of the decision,
? The importance of the decision to the consumer,
? The difficulty of choosing among the alternatives, and
? The individual?s tendency to experience anxiety.
Because dissonance is uncomfortable, the consumer may use one or more of the following
approaches to reduce it:
? Increase the desirability of the brand purchased.
? Decrease the desirability of rejected alternatives.
? Decrease the importance of the purchase decision.
? Reject the negative data on the brand purchased.
If the dissonance about the purchase is not reduced, the anxiety may transform into
dissatisfaction (general or specific). Certainly, this negative experience leads to new problem
recognition, and the consumer will engage in another problem solving process. The difference,
however, is that in the next round of process, memory of the previous negative experience and
dissatisfaction will be used as part of information. Therefore, the probability for the
unsatisfactory brand to be re-selected and repurchased will be significantly lower than before.
Purchase Product Use
Elaborate
Evaluation
Disposition
Dissatisfaction
Repeat Purchase
Motivation
Post-purchase
Dissonance
doc_118829606.docx
Problem recognition is that result when there is a difference between one's desired state and one's actual/current state i.e. when consumer recognizes a problem or a need e.g. Kathy may realize that her best suit doesn’t look contemporary any more or, Dan may recognize that his personal computer is not performing as well as he thought it should.
Basic Model of Consumer Decision Making
Problem Recognition (Motivation)
Problem recognition is that result when there is a difference between one's desired state
and one's actual/current state i.e. when consumer recognizes a problem or a need e.g. Kathy may
realize that her best suit doesn?t look contemporary any more or, Dan may recognize that his
personal computer is not performing as well as he thought it should. These are the kinds of
problem that we as consumers encounter all the time. When we find out a difference between
the actual state and a desired state, a problem is recognised. When we find a problem, we
usually try to solve the problem. The word motivation means "to stimulate toward action," seeing
the difference in his/her actual and desired state the consumer is „motivated? to take action i.e.
consumers are motivated to address this discrepancy and hence they commence the buying
process.
Sources of problem recognition include:
? An item is out of stock
? Dissatisfaction with a current product or service
? Consumer needs and wants
? Related products/purchases
? Marketer-induced
I nformation Search (Perception)
When a consumer discovers a problem, he/she is likely to search for information
regarding what products he/she can use to satisfy his/her need, e.g. Dan may simply pay more
attention to product information of a personal computer. He becomes more attentive to computer
ads, computers purchased by his friends, and peer conversations about computers. Or, he may
more actively seek information by visiting stores, talking to friends, or reading computer
magazines, among others. Through gathering information, the consumer learns more about some
brands that compete in the market and their features and characteristics. Theoretically, there is a
total set of brands available to Dan, but he will become aware of only a subset of the brands
(awareness set) in the market. Some of these brands may satisfy his initial buying criteria, such
as price and processing speed (consideration set). As Dan proceeds to more information search,
only a few will remain as strong candidates (choice set).
Once the consumer has recognised a problem, they search for information on products
and services that can solve that problem. Consumers undertake both an internal (memory) and an
external search.
Sources of information include:
? Personal sources
? Commercial sources
? Public sources
? Personal experience
The relevant internal psychological process that is associated with information search is
perception. Perception is defined as 'the process by which an individual receives, selects,
organizes, and interprets information to create a meaningful picture of the world', which in this
case means the picture of the product.
Evaluation and Selection of Alternatives (Attitude Formation)
How does the consumer process competitive brand information and evaluate the value of
the brands? Unfortunately there is no single, simple evaluation process applied by all consumers
or by one consumer in all buying situations.
One dominant view, however, is to see the evaluation process as being cognitively driven
and rational. Under this view, a consumer is trying to solve the problem and ultimately
satisfying his/her need. In other words, he/she will look for problem-solving benefits from the
product. The consumer, then, looks for products with a certain set of attributes that deliver the
benefits. Thus, the consumer sees each product as a bundle of attributes with different levels of
ability of delivering the problem solving benefits to satisfy his/her need. The distinctions among
the need, benefits, and attributes are very important. One useful way to organize the
relationships among the three is a hierarchical one (Figure 1). Although simplified, Figure 1 is
an example of how a bundle of attributes (i.e., a product or, more specifically, personal
computer) relates to the benefits and underlying needs of Dan.
Figure 1: Hierarchical Views of Needs, Benefits, and Attributes
From this figure and the preceding discussion, one might recognize that the product
attributes are relevant and important only to the extent that they lead to a certain set of benefits.
Likewise, benefits are meaningful only if they can address the problem and be instrumental to
satisfy the underlying need – as underlying needs are often personal, consumers differ as to their
beliefs about what product benefits and attributes are more (or less) important and relevant in
satisfying their needs. Based on their personal judgment on importance of benefits and
attributes, consumers develop a set of attitudes (or preferences) toward the various brands. One
may express his/her preferences of the brands in terms of ranking, probability of choice, and so
forth. What actually happens in this stage is; the consumer compares the brands and products that
are in their consideration set.
Underlying Needs
Benefits
Attributes
Size
Portability
Price
CPU Speed
Computational
Horse
Economical
Hard Drive Size
Software
Bundle
Helps Me Survive
SIMSREE MBA Program
Doesn?t Break
Down
Brand
Reputation
Warranty
Globe Net
Ready
Now, the question that comes to my mind here is – How can the marketing organisations
increase the likelihood that their brand is part of the consumer's consideration set?
Consumers evaluate alternatives in terms of the functional and psychological benefits
that they offer. The marketing organisation needs to understand what benefits consumers are
seeking and therefore which attributes are most important in terms of making a decision. The
relevant internal psychological process that is associated with the alternative evaluation stage is
attitude formation. Attitudes are 'learned predispositions' towards an object. Attitudes comprise
both cognitive and affective elements - that is both what you think and how you feel about
something. The multi-attribute attitude model explains how consumers evaluate alternatives on a
range of attributes. There are a number of strategies that can be used to influence the process
(attitude change strategies). Finally, there is a range of ways that consumers apply criteria to
make decisions. The marketing organisations should know how consumers evaluate alternatives
on salient or important attributes and make their buying.
Purchase decision (I ntegration)
To actually implement the purchase decision, however, a consumer needs to select both
specific items (brands) and specific outlets (where to buy) to resolve the problems. There are, in
fact, three ways these decisions can be made: 1) simultaneously; 2) item first, outlet second; or 3)
outlet first, item second. In many situations, consumers engage in a simultaneous selection
process of stores and brands. For example, in Dan?s personal computer case, he may select a set
of brands based on both the product?s technical features (attributes) and availability of brands in
the computer stores and mail-order catalogs he knows well. It is also possible, that he decides
where to buy (e.g., House of PC?s in his neighborhood) and then chooses one or two brands the
store carries. Once the brand and outlet have been decided, the consumer moves on to the
transaction (“buying”).
Sometimes purchase intention does not result in an actual purchase. The marketing
organisation must facilitate the consumer to act on their purchase intention. The provision of
credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to
receive a premium or enter a competition may provide an incentive to buy now. The relevant
internal psychological process that is associated with purchase decision is integration.
Post-purchase evaluation (Learning)
There should be a feedback loop, importance of the post purchase evaluation and that the
post purchase evaluation is the key due to its influences on future purchase patterns.
Post-purchase evaluation processes are directly influenced by the type of preceding
decision-making process. Directly relevant here is the level of purchase involvement of the
consumer. Purchase involvement is often referred to as “the level of concern for or interest in
the purchase”
situation, and it determines how extensively the consumer searches information in
making a purchase decision. Although purchase involvement is viewed as a continuum (from
low to high), it is useful to consider two extreme cases here. Suppose one buys a certain brand
of product (e.g., Diet Pepsi) as a matter of habit (habitual purchase). For him/her, buying a cola
drink is a very low purchase involvement situation, and he/she is not likely to search and
evaluate product information extensively.
In such a case, the consumer would simply purchase, consume and/or dispose of the
product with very limited post-purchase evaluation, and generally maintain a high level of repeat
purchase motivation.
Figure 2 Low I nvolvement Purchase
Purchase Product Use
Simple
Evaluation
Disposition
Repeat Purchase
Motivation
Figure3 Elaborate Post-purchase Evaluation
According to the research, the likelihood of experiencing this kind of dissonance and the
magnitude of it is a function of:
? The degree of commitment or irrevocability of the decision,
? The importance of the decision to the consumer,
? The difficulty of choosing among the alternatives, and
? The individual?s tendency to experience anxiety.
Because dissonance is uncomfortable, the consumer may use one or more of the following
approaches to reduce it:
? Increase the desirability of the brand purchased.
? Decrease the desirability of rejected alternatives.
? Decrease the importance of the purchase decision.
? Reject the negative data on the brand purchased.
If the dissonance about the purchase is not reduced, the anxiety may transform into
dissatisfaction (general or specific). Certainly, this negative experience leads to new problem
recognition, and the consumer will engage in another problem solving process. The difference,
however, is that in the next round of process, memory of the previous negative experience and
dissatisfaction will be used as part of information. Therefore, the probability for the
unsatisfactory brand to be re-selected and repurchased will be significantly lower than before.
Purchase Product Use
Elaborate
Evaluation
Disposition
Dissatisfaction
Repeat Purchase
Motivation
Post-purchase
Dissonance
doc_118829606.docx