consumer behavior ch.4

CHAPTER 4

PEPURCHASE PROCESS: NEED RECOGNITION, SEARCH, AND EVALUATION

CHAPTER OUTLINE

I. Need Recognition

A. Need recognition, the first stage of decision making, is the perception of a difference between the desired state of affairs and the actual situation sufficient to arouse and activate the decision process.

B. Once need recognition occurs, consumers may engage in a search for potential need satisfiers. Search is defined as the motivated activation of knowledge in memory or acquisition of information from the environment.

C. The benefits of need recognition to marketers include:

1.          Reveal opportunities a business may exploit

2.          Identify a market segment with unsatisfied desires

3.          Provide new sales opportunities

4.          Reveal barriers to a firm’s success

D. How firms can activate need recognition:

1.          Create a strong desire for something new and different

2.          Style and design changes

3.          Product innovation

4.          Undermine perceptions about the adequacy of existing products

5.          Reminding consumer of an existing need

E. Generic versus selective need recognition

1.          Generic need recognition occurs when primary demand for a product is stimulated.

2.          Selective need recognition occurs when the need for a specific brand within a product category is stimulated.

II. Search

A. Search, the second stage of the decision-making process, can be defined is the motivated activation of knowledge stored in memory (internal) or acquisition of information from the environment (external).

B. Internal search

1.          Internal search first occurs following need recognition and involved a scan for decision-relevant knowledge stored in long-term memory. If internal search provides sufficient information, then external search is unnecessary.

2.          Consumers’ reliance on internal search will depend on adequacy or quality of existing knowledge and degree of satisfaction with prior purchases.

C. External Search

1.          External search for information from the environment may be conducted when internal search proves inadequate.

2.          Prepurchase search is external search that is driven by an upcoming purchase decision. The primary motivation is the desire to make better consumption choices.

3.          Ongoing search is where information search occurs on a relatively regular basis regardless of sporadic purchase needs. It is motivated by a desire to develop a knowledge base that can be used in future decision-making.

III. How Much Do Consumers Search?

A. The typical answer is “It Depends.”

1.          Consumers normally engage in very little search prior to most purchases

2.          An extended problem-solving process entails considerable amounts of search, habitual problem solving involves a minimal amount of search and limited problem solving involves a moderate amount of search.

3.          Amount of search can also vary from one consumer to the other and can be used as a basis for segmenting consumers. Segments that engage in considerable search can be easier to reach.

B. The amount of time put into search is determined from a cost versus benefit perspective.

1.          More time will be put in if the benefits of new information are greater then the costs of getting the information.

2.          Search costs vary directly with how easily information can be acquired.

3.          The primary benefit prepurchase search is making better decisions by lowering perceived risk.

4.          Search becomes more likely when consumers perceive significant differences between products but are uncertain about which product is best for their needs.

C. The value of understanding search impacts:

1.          Product line width and depth

2.          Pricing decisions to maximize profitability

3.          Promotional strategy:

a. Focus on areas most likely to be searched by consumers

b. Efforts to gain favorable opinion from people of influence

c. Identify situations to discourage search

IV. Prepurchase Evaluation

A. Pre-purchase alternative evaluation is defined as the process by which a choice alternative is evaluated and selected to meet one’s needs. Pre-purchase alternative evaluation is intertwined with search during decision-making.

B. Determining Choice-Alternative

1.          The consideration set (evoked set) is a subset of available alternatives used in making a choice. Failure to gain entry into the consideration set means that a competitor’s offering will be purchased.

2.          Evaluation and choice of a given alternative may be affected by the alternatives that make up the consideration set. An attraction effect can occur such that an alternative’s attractiveness is enhanced when an inferior alternative is added to the set of choice alternatives.

3.          The consideration set may be based on the recall of alternatives from memory (retrieval set) and also on information obtained from external factors such as the yellow pages, the retail environment, etc. External sources have a greater effect on the consideration set of less knowledgeable consumers.

4.          When consideration sets are based on internal search, consumers must recall the company’s officering

5.          Recognition of alternatives at the point of purchase would determine the consideration set.

C. There are two options for deciding how to evaluate choice alternative:

1. Rely on existing product evaluations stored in memory

a. The ability to retrieve information from memory may affect which alternative is eventually chosen. Consumers who lack such knowledge may rely on external information in forming beliefs about product performance.

2. Construct new evaluations based on internal or external search

a. Categorization process

b. Piecemeal process

3. The categorization process:

a. Categorization can be general

b. Categorization can be specific

c. With brand extension, companies can use categorization to their advantage

4. The piecemeal process uses constructing an evaluation of a choice alternative using bits and pieces of information.

a. Decisions involving “noncomparable” alternatives may require abstract criteria during evaluation

b. Consumers need to evaluate the strengths or weaknesses of each alternative based on criteria they see as important in making their choice

c. The ability to retrieve stored memory judgments about the performance of choice alternatives can affect which alternative is eventually chosen

d. Cutoffs are restrictions or requirements for acceptable attribute values that customers employ in judging performance of alternatives

e. Cues or signals such as price as a signal of quality are also used by customers in making judgments about product alternatives (Consumer in Focus 6.3 “Is Whirlpool Missing the Signal?”).

5. Noncompensatory evaluative strategies: These are strategies that are characterized by the fact that a weakness in one attribute cannot be offset by a strength in another attribute. Noncompensatory rules can be of three types:

a. Lexicographic: Under this strategy, brands are compared on the most important attribute. If one of the brands is perceived as superior based on that attribute, it is selected. If two or more brands are perceived to be equally good then they are compared on the second most important attribute and so on until the tie is broken.

b. Elimination by aspects: Again, brands are evaluated on the most important attribute, but the consumer imposes cutoffs for each attribute. If one brand meets the cutoff on the most important attribute, it is chosen. If several brands meet the cutoff, the process of comparison continues until the tie is broken.

c. Conjunctive: Under this rule, cutoffs are established for each salient attribute. Each brand is then compared, one at a time, against this set of cutoffs, and a rank meeting the cutoffs for all attributes is chosen.

6. Compensatory evaluative strategies: These are strategies where a perceived weakness of one attribute may be offset or compensated for by a perceived strength of another attribute. Two types of rules may be used:

a. Simple additive: The consumer counts or adds the number of times each alternative is judged favorably in terms of the set of salient criteria.

b. Weighted additive: This rule incorporates the relative salience of relevant evaluative criteria and is similar to multiattribute models.

V. Consumers are typically not good at evaluating which choice alternative is the best for them.