Chapter 15

LO5: Discuss the major cost–benefit factors driving the amount of external search
Explicit external information search after problem recognition is often limited. It is often
suggested that consumers generally should engage in relatively extensive external search prior to
purchasing an item in order to reap higher benefits of the purchase such as higher brand quality or
lower price. However, this view ignores the fact that information search is not free. It takes time,
energy, and money and can often require giving up more desirable activities. Therefore,
consumers should engage in external search only to the extent that the expected benefits, such as
a lower price or a more satisfactory purchase, outweigh the expected costs. Numerous aspects
affect the perceived costs and/ or benefits of search. They can be market characteristics (e.g.,
number of brands), product characteristics (e.g., price), consumer characteristics (e.g., prior
search and learning), and situational characteristics (e.g., time availability)
AMOUNT OF EXTERNAL INFORMATION SEARCH
External information searches are of special relevance to marketers because they give them
access to customers directly.
Yet, across multiple measures (stores visited, brands evaluated, sources employed, total overall
search) one observation emerges: After problem recognition, the search for explicit external
information is frequently constrained.
The reason why external search is frequently insufficient right before purchases, even for high-
involvement goods and services, is attempted to be explained in the part that follows.
COSTS VERSUS BENEFITS OF EXTERNAL SEARCH
It is frequently advised that consumers should conduct a very thorough external search before
making a purchase in order to gain greater benefits from the transaction, such as a higher brand
quality or lower pricing.
This viewpoint, however, ignores the cost of information search.
It requires effort, time, and resources, and frequently necessitates forgoing more pleasurable
pursuits.
In light of this, buyers should only use external search when the benefits, such as a reduced price
or a more satisfying purchase, outweigh the costs.
The perceived costs and/or rewards of search are influenced by a variety of factors.
They can be market characteristics (e.g., number of brands), product characteristics (e.g., price),
consumer characteristics (e.g., prior search and learning), and situational characteristics (e.g.,
time availability)
Market Characteristics
The quantity of alternatives, the price range, store distribution, and the accessibility of
information are all examples of market features (or, more precisely, how consumers perceive
them). Of course, external search is more likely to occur when there are more options (i.e., items,
places to shop, brands) to tackle a certain issue.
The perceived price disparity across comparable brands in a product class is a significant driver
of external search.
The number of stores a consumer will visit before making a purchase depends on the number,
location, and distances between retail stores in the market.
Information consumption is generally directly tied to information availability, including format.
On the other hand, having too much information might result in information overload and
reduced usage.
Product Characteristics
Perceived product differentiation—feature and quality variance between brands—is connected
with higher external search.
Customers seem to enjoy purchasing goods that provide positive reinforcement—those that are
good for their business (e.g., smartphone, and skincare products).
Purchasing things with negative reinforcement or eradication of an unpleasant condition as their
primary benefit (e.g., grocery shopping, mobile repairs).
Consumer Characteristics
Consumer views of projected advantages, search costs, and the necessity of conducting a specific
level of external information search are all influenced by a range of consumer factors.
External search is uncommon if the customer finds a solution that they are confident is enough.
Positive reinforcement occurs when customers have a pleasant experience with a particular
brand. It lowers the possibility of an outside search and raises the likelihood of a repeat purchase
of that brand.
Customers often develop broad strategies or external search patterns. These general approaches
are termed shopping orientations. While sufficient current knowledge would exist, this
orientation would typically lessen the need to seek just prior to a purchase.
Several social status indicators (education, occupation, and income) tend to promote external
search, but middle-class people seek more than those at higher or lower income levels. As a
shopper's age rises, external search seems to decline.
Customers who are highly involved with a product category frequently look for information
related to that area. This constant research and the knowledge base it generates can lessen their
need to conduct immediate outside research before making a purchase.
Information search before a purchase is increased by the perceived risk of subpar product
performance, whether instrumental or symbolic.
Situation Characteristics
The situational variable of temporal perspective is perhaps the most significant in terms of
search behavior. The amount of external information search also lowers as the amount of time
available to solve a specific consumer problem increases.
Gift-giving situations (task definition) frequently lead to higher perceived risk, which, as we've
seen, leads to higher external search.
Consumers with lower levels of physical or emotional stamina (antecedent state) will look for
information less frequently.
At least inside that outlet, having a pleasant physical surroundings makes people more likely to
look for information.
Depending on the social situation, social surroundings can either increase or decrease search.