CONSUMER DECISION

MAKING AND DIFFUSION Integrates everything that

we have studied so far
OF INNOVATIONS
 Consumer Decision
Making

Evaluation
Problem Post
Information of
Recognitio Purchase
Search Alternative
n Evaluation
s
Inputs

Processes

Output
CONSUMER JOURNEY –
NEW CONCEPT
LEVEL OF INVOLVEMENT
AND DECISION MAKING

Low High

Mediu Purchase involvement

m is different from
product involvement
PROBLEM/NEED Difference between actual

RECOGNITION and desired state

PROBLEM RECOGNITION
What is problem recognition?
Problem recognition is the result of a discrepancy
between a desired state and an actual state that is
sufficient to arouse and activate the decision process.
Consumer problems can be:
1. Active
2. Inactive

What factors determine a consumer’s level of motivation

to solve a particular problem?
1. The magnitude of the discrepancy between the desired and actual states.
2. The relative importance of the problem.
Marketers try to make you realize problems that are not evident or on the
surface
NON-MARKETING
FACTORS AFFECTING
PROBLEM RECOGNITION
IMPACT ON MARKETING
STRATEGY
Discovering Consumer Problems
 Activity Analysis
 Product Analysis
 Problem Analysis
 Human Factors and Emotion Research

Reacting to Problem Recognition

Activating Problem Recognition
 Generic versus Selective
 Approaches:
 Increase Discrepancy
 Increase Perceptions of Importance of Discrepancy
 Influence Timing of Problem Recognition

Suppressing Problem Recognition

IMPACT ON MARKETING
STRATEGY
Discovering Consumer Problems
 Activity Analysis • Problem Analysis
 Product Analysis • Human Factors and Emotion
Research
 IMPACT ON MARKETING
STRATEGY
Reacting to Problem Recognition
 developing a new product
 altering an existing one
 modifying channels of distribution,
 changing pricing policy, or
 revising advertising strategy.

Curb – side pick up

in response to
Covid-19
IMPACT ON MARKETING
STRATEGY
Activating Problem Recognition
 Generic versus Selective
 Approaches:
 Increase Discrepancy
 Increase Perceptions of Importance of Discrepancy
 Influence Timing of Problem Recognition
QUESTIONS?
How does lifestyle relate to problem recognition?

How would you determine the existence of consumer

problems of relevance to a marketer of the following?
- Internet retail outlets
- Online health food store
INFORMATION mental as well as physical
activities that consumers
SEARCH must perform
NATURE OF INFORMATION
SEARCH
Internal Search: relevant information from
long-term memory
External Search: external information relevant
to solving the problem.
Ongoing Search: to acquire information for
possible later use and because the process itself
is pleasurable
INFORMATION SOURCES FOR A
PURCHASE DECISION
TYPES OF INFORMATION SOUGHT

1. The Appropriate Evaluative Criteria: factors or

features that are used to base a decision

2. Existence of Various Alternative Solutions

3. The Performance Level of Each Alternative

Solution on Each Evaluative Criteria
INFORMATION SEARCH IN CONSUMER
DECISIONS
CATEGORIES OF DECISION
ALTERNATIVES
AMOUNT OF EXTERNAL
INFORMATION SEARCH
number of stores visited,
number of alternatives considered,
number of personal sources used, and
overall or combination measures.

external information search is skewed toward limited search, with

the greatest proportion of consumers performing little external
search immediately prior to purchase
 PERCEIVED COSTS AND
BENEFITS OF CONSUMER
SEARCH GUIDE SEARCH EFFECT
Benefits obtained
Financial
Psychological Continue
YES
Physical search effort
Product Do the expected
benefits of
external search
Costs of search exceed the
Out-of-pocket expected costs?
expenses Terminate
Psychological NO search effort
Time
Activities missed

The Internet clearly has the potential to greatly lower

search costs. When it does, it has been shown to increase
search and result in better consumer decisions and a more
enjoyable shopping experience
FACTORS AFFECTING EXTERNAL
SEARCH

Influencing Factor Increasing the Influencing Factor

Causes the Search to:
I. Market characteristics
A. Number of alternatives Increase
B. Price range Increase
C. Store concentration Increase
D. Information availability Increase
1. Advertising
2. Point-of-purchase
3. Sales personnel
4. Packaging
5. Experienced consumers
6. Independent sources
II. Product characteristics
A. Price Increase
B. Differentiation Increase
C. Positive products Increase
 FACTORS AFFECTING EXTERNAL SEARCH

Influencing Factor Increasing the Influencing Factor

Causes the Search to:
III. Consumer characteristics
A. Learning and experience Decrease
B. Shopping orientation Mixed
C. Social status Increase
D. Age and household life cycle Mixed
E. Product involvement Increase
F. Perceived risk Increase
FACTORS AFFECTING EXTERNAL SEARCH

Influencing Factor Increasing the Influencing Factor

Causes the Search to:

IV. Situation characteristics

A. Time availability Increase
B. Purchase for self Decrease
C. Pleasant surroundings Increase
D. Social surroundings Mixed
E. Physical/mental energy Increase

*watch Akash Gupta’s “Excuse me Brother!”

MARKETING STRATEGIES BASED ON
INFORMATION SEARCH PATTERNS
Strategy What to do
Maintenanc • Attention to product quality, avoid out-of-stock situation
e Strategy • Reinforcement advertising strategy
• Defend disruptive acts of competitors
Disrupt • Disrupt the existing decision patterns- which is difficult
Strategy • Low-involvement learning over time could generate a positive product position
for our brand
• attention-attracting advertising aimed specifically at breaking habitual decision
making can be successful.
Capture • information search occurs at the point-of purchase
Strategy • Understand where consumer searched for information, encourage POS displays
and cooperative advertising
Intercept • Intercept the consumer during the search for information on the brands in the
Strategy evoked set
• Coupons can be effective
• The marketer will have to place considerable emphasis on attracting the
consumers’ attention
Preference • information campaign that will result in the brand being preferred by members
Strategy of the target market.
• strong position on those attributes important to the target market
Acceptance • Consumer not seeking information about the brand
Strategy • Motivating the consumers to learn about the brand
• Eg: Chrysler literally paid consumers to seek information about their cars!