Marketing 2
“Consumer behavior” – chapter 7-10
1
,Table of contents
Chapter 7 – Problem recognition and information search ..................................................................... 5
Problem recognition ............................................................................................................................ 5
The ideal state: where we want to be ............................................................................................. 5
The actual state: where we are now ............................................................................................... 5
Internal search: searching for information from memory .................................................................. 5
How much do we engage in internal search? ................................................................................. 5
What kind of information is retrieved from internal search? ......................................................... 5
Is internal search always accurate? ................................................................................................. 7
External search: searching for information from the environment .................................................... 8
Where can we search for information? .......................................................................................... 8
How much do we engage in external search?................................................................................. 9
What kind of information is acquired in external search? ............................................................ 10
Is external search always accurate? .............................................................................................. 11
How do we engage in external search? ........................................................................................ 11
Chapter 8 – Judgement and decision making based on high effort ...................................................... 12
High-effort judgement processes ...................................................................................................... 12
Judgements of likelihood and goodness/badness ........................................................................ 12 2
Mental and emotional accounting ................................................................................................ 12
Biases in judgement processes...................................................................................................... 13
High-effort decisions and high-effort decision-making processes .................................................... 13
Deciding which brands to consider ............................................................................................... 13
Deciding criteria are important to the choice ............................................................................... 14
Deciding what brand to choose: thought-based decisions ............................................................... 14
Decisions based on brands ............................................................................................................ 15
Decisions based on product attributes ......................................................................................... 15
Decisions based on gains and losses ............................................................................................. 15
Deciding what brand to choose: high-effort feeling-based decisions............................................... 16
Appraisals and feelings .................................................................................................................. 16
Affective forecasts and choices ..................................................................................................... 16
Imagery .......................................................................................................................................... 16
Additional high-effort decisions ........................................................................................................ 17
Decision delay................................................................................................................................ 17
Decision making when alternatives cannot be compared ............................................................ 17
, What affects high-effort decisions? .................................................................................................. 17
Consumer characteristics .............................................................................................................. 17
Characteristics of the decision ...................................................................................................... 18
Group context................................................................................................................................ 19
Chapter 9 – Judgement and decision-making based on low effort ...................................................... 19
Low-effort judgement processes ...................................................................................................... 19
The representativeness heuristic .................................................................................................. 19
The availability heuristic ................................................................................................................ 19
Low-effort decision-making processes .............................................................................................. 20
Unconscious low-effort decision making ...................................................................................... 20
Conscious low-effort decision making........................................................................................... 20
Using simplifying strategies when consumer effort is low............................................................ 20
Learning choice tactics ...................................................................................................................... 21
Reinforcement ............................................................................................................................... 21
Punishment.................................................................................................................................... 21
Repeat purchase ............................................................................................................................ 21
Choice tactics depend on the product .......................................................................................... 21
3
Low-effort thought-based decision making ...................................................................................... 21
Performance as a simplifying strategy .......................................................................................... 21
Habit as a simplifying strategy....................................................................................................... 21
Brand loyalty as a simplifying strategy .......................................................................................... 22
Price as a simplifying strategy ....................................................................................................... 22
Normative influences as a simplifying strategy ............................................................................. 22
Low-effort feeling-based decision making ........................................................................................ 23
Feelings as a simplifying strategy .................................................................................................. 23
Brand familiarity ................................................................................................................................ 23
Decision making based on variety-seeking needs ......................................................................... 23
Buying on impulse ......................................................................................................................... 24
Chapter 10 – Post-decision processes ................................................................................................... 24
Post-decision dissonance and regret ................................................................................................ 24
Dissonance..................................................................................................................................... 24
Regret ............................................................................................................................................ 24
Learning from consumer experience ................................................................................................ 24
A model of learning from consumer experience........................................................................... 24
, What affects learning? .................................................................................................................. 25
How do consumers make satisfaction or dissatisfaction judgements? ............................................ 25
Satisfaction/dissatisfaction based on thoughts ............................................................................ 26
Satisfaction/dissatisfaction based on feelings .............................................................................. 27
Responses to dissatisfaction ............................................................................................................. 27
Complaints ..................................................................................................................................... 27
Responding to service recovery .................................................................................................... 28
Responding by negative word of mouth ....................................................................................... 28
Is customer satisfaction enough? ...................................................................................................... 28
Disposition ......................................................................................................................................... 28
Disposing of meaningful objects ................................................................................................... 29
Recycling ........................................................................................................................................ 29
4
,Chapter 7 – Problem recognition and information search
Problem recognition
Problem recognition: the perceived difference between an actual and an ideal
state
Ideal state: the way people want things to be
Actual state: the way things actually are
The greater the discrepancy between the actual and ideal states, and the higher the
level of MAO, the more likely consumers are to act. Problem recognition relates to
consumption, disposition and acquisition.
The ideal state: where we want to be
People sometimes get their notion of the ideal state by relying on simple
expectations, usually based on past experience, about everyday consumption and
disposition situations and how products or services fulfil people’s needs. The ideal
state can also be a function of people’s future goals of aspirations. Both expectations
and aspirations are often stimulated by people’s personal motivations and by aspects
of their culture. Likewise, social class can have an influence as well as reference
groups. Major changes in personal circumstances can instigate new ideal states.
The actual state: where we are now
The perception of the actual state can be influenced by a variety of factors:
- Physical factors
- Needs 5
- External stimuli
Internal search: searching for information from memory
Internal search: the process of recalling stored information from memory (to make
a decision)
Because consumers have limited capacity or ability to process information
consumers are likely to recall only a small subset of stored information when they
engage in internal search.
How much do we engage in internal search?
The degree of recall can vary widely and, on a general level, researchers know that
the effort consumers devote to internal search depends on their MAO to process
information. Consumers can only engage in active internal search if the information is
stored in memory and if they have the opportunity to do so.
What kind of information is retrieved from internal search?
Recall of brands
The set of brands that consumers recall from memory whenever problem recognition
has been stimulated is an important aspect of internal search that greatly affects
decision making.
Consideration set: the subset of top-of-mind brands evaluated when making a
choice evoked set
, In general, the consideration set consists of brands that are “top-of-mind” or easy to
remember, when a consumer is making a decision. A small consideration set is
usually necessary because consumers’ ability to recall brand information decreases
as the size of the set increases. However, even if they do not recall the entire set
from memory, stored information aids the recognition set process. Studies indicate
that consideration sets vary in terms of their size, stability, variety, and preference
dispersion.
Preference dispersion: the equality of preferences toward brand or products in the
set
A company should enhance its product’s linkage with an occasion and in more
familiar to consumers to increase the chance that its product will be retrieved from
memory as part of the consideration set. According to research, brands that are
recalled are more likely to be chosen. However, if consumers cannot recall brands
from memory to form a consideration set, the set will tend to be determined by
external factors. Factors what cause a brand to be included in the consideration set:
- Prototypicality
People will more easily recall brands that are closest to the prototype or that
most resemble other category members
- Brand familiarity
Well-known brands are more easily recalled during internal search because
the memory links associated with these brands tend to be stronger than those
of less known brands. keep brand awareness high + associations strong
- Goals and usage situations
Consumers have goal-derived and usage-specific categories in memory and 6
the activation of these categories will determine which brands people recall
during internal search companies should associate products with certain
goals and usage situations
- Brand preference
Brands toward which the consumer has positive attitudes tend to be recalled
more easily + included in consideration set
- Retrieval cues
By strongly associating the brand with a retrieval cue, marketers can increase
the chance that the brand will be included in the consumer’s consideration set.
E.g. packaging
Recall of attributes
Attribute information that people recall tends to be in summary or in a simplified form
rather than in its original detail. Consumers can often recall some details when they
engage in internal search, and the recalled attribute information can strongly
influence their brand choices. The following factors influence the recall of attributes:
- Accessibility or availability
Information that is more accessible or available (strongest associative links) is
the most likely to be recalled and entered into decision process
- Diagnosticity
Diagnostic information: that which helps people discriminate among objects
If information is both accessible and diagnostic, it has a very strong influence
in the decision-making process. Negative information tends to be more
diagnostic more distinctive reject brands with negative quality easier.
“Consumer behavior” – chapter 7-10
1
,Table of contents
Chapter 7 – Problem recognition and information search ..................................................................... 5
Problem recognition ............................................................................................................................ 5
The ideal state: where we want to be ............................................................................................. 5
The actual state: where we are now ............................................................................................... 5
Internal search: searching for information from memory .................................................................. 5
How much do we engage in internal search? ................................................................................. 5
What kind of information is retrieved from internal search? ......................................................... 5
Is internal search always accurate? ................................................................................................. 7
External search: searching for information from the environment .................................................... 8
Where can we search for information? .......................................................................................... 8
How much do we engage in external search?................................................................................. 9
What kind of information is acquired in external search? ............................................................ 10
Is external search always accurate? .............................................................................................. 11
How do we engage in external search? ........................................................................................ 11
Chapter 8 – Judgement and decision making based on high effort ...................................................... 12
High-effort judgement processes ...................................................................................................... 12
Judgements of likelihood and goodness/badness ........................................................................ 12 2
Mental and emotional accounting ................................................................................................ 12
Biases in judgement processes...................................................................................................... 13
High-effort decisions and high-effort decision-making processes .................................................... 13
Deciding which brands to consider ............................................................................................... 13
Deciding criteria are important to the choice ............................................................................... 14
Deciding what brand to choose: thought-based decisions ............................................................... 14
Decisions based on brands ............................................................................................................ 15
Decisions based on product attributes ......................................................................................... 15
Decisions based on gains and losses ............................................................................................. 15
Deciding what brand to choose: high-effort feeling-based decisions............................................... 16
Appraisals and feelings .................................................................................................................. 16
Affective forecasts and choices ..................................................................................................... 16
Imagery .......................................................................................................................................... 16
Additional high-effort decisions ........................................................................................................ 17
Decision delay................................................................................................................................ 17
Decision making when alternatives cannot be compared ............................................................ 17
, What affects high-effort decisions? .................................................................................................. 17
Consumer characteristics .............................................................................................................. 17
Characteristics of the decision ...................................................................................................... 18
Group context................................................................................................................................ 19
Chapter 9 – Judgement and decision-making based on low effort ...................................................... 19
Low-effort judgement processes ...................................................................................................... 19
The representativeness heuristic .................................................................................................. 19
The availability heuristic ................................................................................................................ 19
Low-effort decision-making processes .............................................................................................. 20
Unconscious low-effort decision making ...................................................................................... 20
Conscious low-effort decision making........................................................................................... 20
Using simplifying strategies when consumer effort is low............................................................ 20
Learning choice tactics ...................................................................................................................... 21
Reinforcement ............................................................................................................................... 21
Punishment.................................................................................................................................... 21
Repeat purchase ............................................................................................................................ 21
Choice tactics depend on the product .......................................................................................... 21
3
Low-effort thought-based decision making ...................................................................................... 21
Performance as a simplifying strategy .......................................................................................... 21
Habit as a simplifying strategy....................................................................................................... 21
Brand loyalty as a simplifying strategy .......................................................................................... 22
Price as a simplifying strategy ....................................................................................................... 22
Normative influences as a simplifying strategy ............................................................................. 22
Low-effort feeling-based decision making ........................................................................................ 23
Feelings as a simplifying strategy .................................................................................................. 23
Brand familiarity ................................................................................................................................ 23
Decision making based on variety-seeking needs ......................................................................... 23
Buying on impulse ......................................................................................................................... 24
Chapter 10 – Post-decision processes ................................................................................................... 24
Post-decision dissonance and regret ................................................................................................ 24
Dissonance..................................................................................................................................... 24
Regret ............................................................................................................................................ 24
Learning from consumer experience ................................................................................................ 24
A model of learning from consumer experience........................................................................... 24
, What affects learning? .................................................................................................................. 25
How do consumers make satisfaction or dissatisfaction judgements? ............................................ 25
Satisfaction/dissatisfaction based on thoughts ............................................................................ 26
Satisfaction/dissatisfaction based on feelings .............................................................................. 27
Responses to dissatisfaction ............................................................................................................. 27
Complaints ..................................................................................................................................... 27
Responding to service recovery .................................................................................................... 28
Responding by negative word of mouth ....................................................................................... 28
Is customer satisfaction enough? ...................................................................................................... 28
Disposition ......................................................................................................................................... 28
Disposing of meaningful objects ................................................................................................... 29
Recycling ........................................................................................................................................ 29
4
,Chapter 7 – Problem recognition and information search
Problem recognition
Problem recognition: the perceived difference between an actual and an ideal
state
Ideal state: the way people want things to be
Actual state: the way things actually are
The greater the discrepancy between the actual and ideal states, and the higher the
level of MAO, the more likely consumers are to act. Problem recognition relates to
consumption, disposition and acquisition.
The ideal state: where we want to be
People sometimes get their notion of the ideal state by relying on simple
expectations, usually based on past experience, about everyday consumption and
disposition situations and how products or services fulfil people’s needs. The ideal
state can also be a function of people’s future goals of aspirations. Both expectations
and aspirations are often stimulated by people’s personal motivations and by aspects
of their culture. Likewise, social class can have an influence as well as reference
groups. Major changes in personal circumstances can instigate new ideal states.
The actual state: where we are now
The perception of the actual state can be influenced by a variety of factors:
- Physical factors
- Needs 5
- External stimuli
Internal search: searching for information from memory
Internal search: the process of recalling stored information from memory (to make
a decision)
Because consumers have limited capacity or ability to process information
consumers are likely to recall only a small subset of stored information when they
engage in internal search.
How much do we engage in internal search?
The degree of recall can vary widely and, on a general level, researchers know that
the effort consumers devote to internal search depends on their MAO to process
information. Consumers can only engage in active internal search if the information is
stored in memory and if they have the opportunity to do so.
What kind of information is retrieved from internal search?
Recall of brands
The set of brands that consumers recall from memory whenever problem recognition
has been stimulated is an important aspect of internal search that greatly affects
decision making.
Consideration set: the subset of top-of-mind brands evaluated when making a
choice evoked set
, In general, the consideration set consists of brands that are “top-of-mind” or easy to
remember, when a consumer is making a decision. A small consideration set is
usually necessary because consumers’ ability to recall brand information decreases
as the size of the set increases. However, even if they do not recall the entire set
from memory, stored information aids the recognition set process. Studies indicate
that consideration sets vary in terms of their size, stability, variety, and preference
dispersion.
Preference dispersion: the equality of preferences toward brand or products in the
set
A company should enhance its product’s linkage with an occasion and in more
familiar to consumers to increase the chance that its product will be retrieved from
memory as part of the consideration set. According to research, brands that are
recalled are more likely to be chosen. However, if consumers cannot recall brands
from memory to form a consideration set, the set will tend to be determined by
external factors. Factors what cause a brand to be included in the consideration set:
- Prototypicality
People will more easily recall brands that are closest to the prototype or that
most resemble other category members
- Brand familiarity
Well-known brands are more easily recalled during internal search because
the memory links associated with these brands tend to be stronger than those
of less known brands. keep brand awareness high + associations strong
- Goals and usage situations
Consumers have goal-derived and usage-specific categories in memory and 6
the activation of these categories will determine which brands people recall
during internal search companies should associate products with certain
goals and usage situations
- Brand preference
Brands toward which the consumer has positive attitudes tend to be recalled
more easily + included in consideration set
- Retrieval cues
By strongly associating the brand with a retrieval cue, marketers can increase
the chance that the brand will be included in the consumer’s consideration set.
E.g. packaging
Recall of attributes
Attribute information that people recall tends to be in summary or in a simplified form
rather than in its original detail. Consumers can often recall some details when they
engage in internal search, and the recalled attribute information can strongly
influence their brand choices. The following factors influence the recall of attributes:
- Accessibility or availability
Information that is more accessible or available (strongest associative links) is
the most likely to be recalled and entered into decision process
- Diagnosticity
Diagnostic information: that which helps people discriminate among objects
If information is both accessible and diagnostic, it has a very strong influence
in the decision-making process. Negative information tends to be more
diagnostic more distinctive reject brands with negative quality easier.
