Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–1

Chapter 3 Problem Recognition

• Nature of problem recognition• Difference between habitual, limited and extended

decision making• Methods for measuring problem recognition• Marketing strategies based on problem recognition

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–2

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?

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–3

Types of Consumer Decisions

• Problem recognition

• Purchase involvement

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–4

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

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–5

Purchase Involvement and Types of Decision Making

Low purchaseinvolvement

High purchaseinvolvement

Habitualdecisionmaking

Limiteddecisionmaking

Extendeddecisionmaking

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Purchase Involvement and Types of Decision Making (cont.)

3–7

Purchase Involvement and Types of Decision Making (cont.)

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–8

Marketing Strategy and Types of Consumer Decisions

The process of problem recognition

• The nature of problem recognition– Desired state– Actual state

3–9

The Process of Problem Recognition

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The Process of Problem Recognition (cont.)

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–11

The Desire to Resolve Recognised Problems

• Depends on two factors:1. The magnitude of the discrepancy between the desired

state and the actual state

2. The relative importance of the problem

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–12

Types of Consumer Problems

• Active problem

• Inactive problem

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–13

• 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

Types of Consumer Problems and Action Required

3–14

Non-Marketing Factors Affecting Problem Recognition

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–15

Factors that Influence the Desired State

• Culture/social class, e.g. cleanliness• Reference groups, e.g. 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

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–16

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

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–17

Brand Performance

Many products need to perform on two levels:

1. Instrumental performance

2. Expressive performance

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–18

Marketing Strategy and Problem Recognition

• Measuring problem recognition

1. activity analysis—study of meal preparation

2. product analysis—problems using it?

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–19

Marketing Strategy and Problem Recognition (cont.)

• Measuring problem recognition (cont.)

3. problem analysis—product/brand solutions?

4. human factors research—suit users

5. emotion research—how people feel about it

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–20

Responding to Consumer Problems

• Activating problem recognition

– generic problem e.g. dairy foods When the problem is latent or of low importance

– selective e.g. one brand solution

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An Active Attempt to Activate Problem Recognition

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Responding to a Recognised Problem

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–23

Responding to Consumer Problems

• Timing problem recognition

e.g. winter colds

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–24

Responding to Consumer Problems (cont.)

• Suppressing problem recognition

– avoid upsetting habitual buyers

– anticipate and counteract negatives

Copyright 2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 3–25

Next lecture…

Chapter 4Information Search