BB Chapter Three: Problem Recognition

Chapter Three:Problem Recognition

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Problem recognitionAn important stage of consumer decision making

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Problem recognition

• Nature of problem recognition

• Difference between habitual, limited and extended decision making

• Methods for measuring problem recognition

• Uncontrollable factors that effect problem recognition

• Marketing strategies based on problem recognition

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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?

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Types of consumer decisions

• Problem recognition

• Purchase involvement

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Types of Consumer DecisionsTypes of Consumer Decisions

Purchase involvementPurchase involvement is the level of concern for, or interest in, the purchase process.

Triggered by need to consider a particular purchase.

A temporary state influenced by the interaction of individual, product, and situational characteristics.

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Types of Consumer DecisionsTypes of Consumer Decisions

A consumer may be very involved with a brand (e.g., Starbucks) or a product category, BUT…

have low purchase involvement due to brand loyalty, time pressures, etc.

Product involvementProduct involvement or enduring involvementenduring involvement is very different from purchase involvement.

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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

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Purchase involvement and types of decision making

Low purchaseinvolvement

High purchaseinvolvement

Habitualdecisionmaking

Limiteddecisionmaking

Extendeddecisionmaking

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Types of Decision MakingTypes of Decision Making

Habitual decisions occur when there is very low involvement with the purchase.

A completely habitual decision does not even include consideration of the “do not purchase” alternative. Consumer buys CampbellConsumer buys Campbell’’s s

without considering other brands, without considering other brands, its price, etc.its price, etc.

Habitual decision makingHabitual decision making, in effect involves no decision per se. Go back to buy the same brand.

Habitual Decision MakingHabitual Decision Making

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Middle ground between habitual and extended decision making.

Involves recognizing a problem for which there are several possible solutions.

Decision based only on Decision based only on buying the cheapest rolls.buying the cheapest rolls.

Limited decision making Limited decision making involves internal and limited external search, few alternatives, simple decision rules on a few attributes, and little post-purchase evaluation.

Limited Decision MakingLimited Decision Making

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It is a response to the high level of purchase involvement.

During post-purchase evaluation, doubts are likely and a thorough evaluation takes place.

Emotional decisions may involve Emotional decisions may involve substantial cognitive effort.substantial cognitive effort.

Extended decision makingExtended decision making involves extensive internal and external search followed by a complex evaluation of multiple alternatives.

Extended Decision MakingExtended Decision Making

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Purchase involvement and types of decision making (cont.)

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The Process of Problem RecognitionThe Process of Problem Recognition

Problem recognitionProblem recognition is the result of a gap between a desired state and an actual state sufficient to arouse and activate the decision process.

�An actual stateactual state is the way an individual perceives his/her feelings and situation to be at the present time.

�A desired statedesired state is the way an individual wants to feel or be at the present time.

The Nature of Problem RecognitionThe Nature of Problem Recognition

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Process of problem recognition

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1. The magnitude of the discrepancy between the desired and actual states, and

2. The relative importance of the problem

Desire to resolve a particular problem depends on:

The Nature of Problem RecognitionThe Nature of Problem Recognition

In general, importance is determined by how critical the problem is to maintenance of desired lifestyle.

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Products are positioned as providing a potential solution eg. shampoo

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Products are positioned as providing a potential solution eg. cough medicine

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Types of consumer problems

• Active problem

– A problem the consumer is aware of, or will become aware of, in the normal course of events.

• Inactive problem– A problem of which the consumer is not yet

aware.

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Types of Consumer ProblemsTypes of Consumer Problems

Active Problem Active Problem

An active problemactive problem is one the consumer is aware of or will become aware of in normal course of events.

Marketing strategyMarketing strategy:

Only require marketer to convince consumers that its brand is the superior solution.

Inactive Problem Inactive Problem An inactive probleminactive problem is one of which the consumer is not aware.

Marketing strategyMarketing strategy:

Marketer must convince consumers that they have the problem AND that their brand is a superior solution.

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• 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

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Non-marketing factors affecting problem recognition

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Factors that influence the desired state

• Culture/social class, e.g. importance of cleanliness

• Reference groups, e.g. a change 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

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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

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Uncontrollable Determinants of Problem Uncontrollable Determinants of Problem Recognition Recognition VarietyVariety--seekingseeking is a challenge to marketers because it means that consumers switch brands for reasons beyond a company’s control.

SensorySensory--specific satietyspecific satiety –consumers get bored (satiated) with sensory attributes more than on non-sensory attributes.

Offering variety on key sensory attributes can increase loyalty to the brand even if consumers engage in variety seeking. Variety WITHIN brand can drive Variety WITHIN brand can drive

loyalty in the face of variety loyalty in the face of variety seeking.seeking.

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Marketing Strategy and Problem Marketing Strategy and Problem RecognitionRecognition

1.1. Discovering Consumer ProblemsDiscovering Consumer Problems

2.2. Responding to Consumer ProblemsResponding to Consumer Problems

3.3. Helping Consumers Recognize ProblemsHelping Consumers Recognize Problems

4.4. Suppressing Problem RecognitionSuppressing Problem Recognition

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A wide variety of approaches are used to determine the problems consumers face.

Discovering Consumer ProblemsDiscovering Consumer Problems

1.1. IntuitionIntuition - the most common, however, the problem identified may be of low importance to most consumers

2.2. Survey Survey – asks relatively large numbers of individuals about the problems they are facing

3.3. Focus Groups Focus Groups – composed of 8 to 12 similar individuals brought together to discuss a particular topic; a moderator is present to keep the discussion moving and focused on the topic but otherwise free flowing

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Product / brand performance

Many products need to perform on two levels:

• Instrumental performance

• Expressive performance

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Marketing strategy and problem recognition (cont.)

• Measuring problem recognition (cont.)

– Problem analysis—product/brand solutions?

– Human factors research—suit users

– Emotion research—how people feel about it

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Human Factors ResearchHuman Factors Research

Human factors research attempts to determine human capabilities in areas such as vision, strength, response time, flexibility, and fatigue and the effect on these capabilities of lighting, temperature, and sound.

�Observational techniques such as slow-motion and time-lapse photography, video recording, and event recorders are particularly useful methods.

�This type of research can sometimes identify functional problems that consumers are unaware of.


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Emotion ResearchEmotion Research

Marketers are increasingly conducting research on the role of emotions in problem recognition and resolution.

�Common approaches are focus group researchfocus group research and personal personal interviewsinterviews that examine the emotions associate with certain problems.

�Critical in helping marketers anticipate consumer reaction to problems and train customer service personnel to respond appropriately.


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Marketing strategy and problem recognition

• Measuring problem recognition

– Activity analysis—study of meal preparation

– Product analysis—problems using it?

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Surveys and focus groups use one of the following approaches to problem identification:


1. Activity Analysis Focuses on a particular activity to determine what problems consumers encounter during the performance of the activity.

2. Product Analysis Examines the purchase or use of a particular product or brand. Consumers may be asked about problems associated with using a product or brand.

3. Problem Analysis Starts with a problem and asks which activities, products, or brand are associated with (or perhaps could eliminate) those problems

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Once a consumer problem is identified, the manager may structure the marketing mix to solve the problem.

This can involve:

Responding to Consumer ProblemsResponding to Consumer Problems

• Developing a new product or altering an existing one

• Modifying channels of distribution

• Changing pricing policy, or

• Revising advertising strategy

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Responding to consumer problems

• Activating problem recognition

– Generic problem e.g. dairy foods

� when the problem is latent or of low importance

– Selective problem recognition e.g. one brand solution

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Generic versus Selective Problem RecognitionGeneric versus Selective Problem Recognition

Helping Consumers Recognize ProblemsHelping Consumers Recognize Problems

Generic Problem RecognitionGeneric Problem Recognition

• Involves a discrepancy that a variety of brands within a product category can reduce

• Increasing generic problem recognition generally results in an expansion of the total market

Selective Problem RecognitionSelective Problem Recognition

• Involves a discrepancy only one brand can solve

• Firms attempt to cause selective problem recognition to gain or maintain market share

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• Influencing the desired state– Highlight unique features

• Influencing perceptions of the desired state– Challenge customer to re-examine the existing

state (‘good enough?’

• Timing problem recognition,e.g. winter colds

Responding to consumer problems


Approaches to Activating Problem RecognitionApproaches to Activating Problem Recognition

How can a firm influence problem recognition?

Recall that problem recognitionproblem recognition is a function of

(1) the importance, and

(2) the magnitude

of a discrepancy between the desired statedesired state and an existing state


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An active attempt to

activate problem recognition

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Approaches to Activating Problem RecognitionApproaches to Activating Problem Recognition


Many marketing efforts attempt to influence the desired state, often advertising the benefits their products will provide and hoping that these benefits will become desired by consumers.

It is also possible to influence perceptions of the existing state through advertisements.

Critics frequently question the ethics of activating problem recognition, especially for problems related to status or socialacceptance.

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The The Timing Timing of Problem Recognitionof Problem Recognition


Consumers often recognize problems at times when purchasing a solution is difficult or impossible, such as

• deciding to purchase a generator during a hurricane

• becoming aware of the need for health insurance after being hospitalized

A common marketing strategy is to trigger problem recognition inadvance of the actual problem

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Responding to consumer problems (cont.)

• Suppressing problem recognition

– Avoid upsetting habitual buyers

– Anticipate and counteract negatives

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Suppressing Problem RecognitionSuppressing Problem Recognition


Occasionally information is introduced in the market place that triggers problem recognition that some marketers prefer to avoid.

�Obviously marketers do not want their current customers to recognize problems with their brands.

�Effective quality control and distribution (limited out-of-stock situations) are important in this effort.

�Packages and package inserts that assure the consumer of the wisdom of their purchase are also common.

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Summary of topics in this chapter

• What is the nature of problem recognition?• What is the difference between habitual,

limited and extended decision making?• What are the key methods for measuring

problem recognition?

• What are the uncontrollable factors that effect problem recognition?

• What marketing strategies can be used to activate problem recognition?

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BB Chapter Three: Problem Recognition

Business

Transcript of BB Chapter Three: Problem Recognition