Summary Midterm 2 Marketing for Premasters Tilburg University
Chapter 7: Problem Recognition and Information Search
The first step in the consumer decision-making
process involves problem recognition. Next, the
consumer searches for information to solve the
problem either internally from memory or
externally from outside sources.
Problem recognition is the perceived difference between an ideal and an actual state. This
is a critical stage in the decision process because it motivates the consumer to action.
- The ideal state is the way that consumers would like a situation to be (personal
motivations, self-image, social class, reference groups, changes in circumstances).
- The actual state is the real situation as consumers perceive it now. Influenced by
physical factors (running out, malfunction product), needs (hungry,), creative,
external stimuli.
The greater the discrepancy between the actual and the ideal states, and the higher MOA.
Internal search is the process of recalling stored information from memory, step after
recognition of the problem. Biggest part is on what is recalled, four types of recall:
- Brands: set that customer recall from memory
Consideration (or evoked set): he subset of top-of-mind brands evaluated when
making a choice. A small is better ability to recall decreases as size increases.
Studies indicate that consideration sets vary in terms of their size, stability,
variety, and preference dispersion (the equality of preferences toward brands or
products in the set).
Factors that increase the possibility of consumers’ recalling a particular brand:
o Prototypicality: closest to prototype, resemble other category members
o Brand familiarity. Well-known brands
o Goals and usage situations: activations of goal-categories
o Brand preference: positive attitudes
o Retrieval cues: easy identify and remember
- Attributes: summary or simplified form rather than in its original detail. Variables
which influence factors the recall of an attribute are:
Accessibility or availability: having the strongest associative links. Easy to recall.
Done by repeatedly drawing attention
Diagnostic information: helps distinguish objects (vary in price). (competitive
advantage)
Salience: consumers can recall very salient (prominent) attributes even when
their opportunity to process is low
Vividness: Vivid information is presented as concrete words, pictures, or
instructions to imagine or through word- of-mouth communication.
Goals: determine which attribute is recalled from memory. Identify important
goals position the offerings in the context of these goal
Attribute determinance: attribute that is both salient and diagnostic (Rolex tell time
salient, and is craftsmanship as diagnostic attributes)
, - Evaluations: overall evaluations or attitudes (i.e., our likes and dislikes) easier to
remember than specific attribute information form strong associative
Online processing: actively evaluating a brand views an ad
- Experiences: recall of experiences from autobiographical memory in the form of
specific images and the effect associated with them
Three search biases can lead to the recall of information that results in bad judgment:
- Confirmation bias: tendency to recall information that reinforces or confirms our
overall beliefs rather than contradicting them (to maintain consistency in our views)
Selective perception: we see what we want to see
- Inhibition: recall of one attribute inhibiting the recall of another (forget an attribute
or remember but still ignore)
- Mood: consumers engaged in internal search are most likely to recall information,
feelings, and experiences that match their mood
External search: process of collecting information from outside
sources, for example, magazines, dealers, and ads. 2 types:
- Prepurchase search: search for information that aids a
specific acquisition decision.
- Ongoing search: search that occurs regularly, regardless
of whether the consumer is making a choice.
External sources of information:
- Retailer search: visits or calls to stores or dealers
- Media and social media search
- Interpersonal search: advice from friends, relatives, neighbors, coworkers, and/or
other consumers
- Independent search: contact with independent sources of information (books,
websites)
- Experiential search: using product samples or product/ service trials or experiencing
the product online (critical for hedonic products and services)
Information Overload: access to so much information can make customers overloaded.
Depending on the way in which the information is structured, an overload can lead to a
decline in decision quality.
Simulations: Advances in technology and graphics have dramatically improved the online
experience sites that incorporate special and interactive effects (VR)
Online Community: people with a interest or condition related to a product or service go
online to share ideas by using websites, discussion forums, text chat, and other tools.
The level of engagement in external search varies between different factors and situations.
- Motivation to Process Information: motivation increases, search will be more
extensive. Factors which increase search:
Involvement and perceived risk: situational involvement (particular situation) and
enduring involvement (an ongoing response). riskier decisions more external
search activity
, Perceived costs and benefits: search is greater when its perceived benefits are
high relative to its costs
Consideration set: number of attractive alternatives motivated to engage
Relative brand uncertainty: uncertain about which best brand more search
Type of product: Hedonic (unique) more search
Attitudes toward search: like to search for information
Discrepancy of information: search the unknown
Presence of others: don’t like to be watched
- Ability to Process Information: 4 variables affect the extent ability to search:
Consumer knowledge:
o subjective knowledge: the consumer’s perception about what they know
relative to what others know
o Objective knowledge: the actual information stored in memory that can
be measured with a formal knowledge test
Cognitive abilities: higher basic cognitive abilities result in higher ability
Consumer affect: positive affect (efficient processing) negative affect (make
judgments both less efficient and more effortful)
Demographics: certain types of consumers search more than others
- Opportunity to Process Information: factors that affect the search process:
Amount of information available: consumers can do more searching as the
amount of available information increase
Information format: sometimes information is available from diverse sources or
locations, but consumers must expend considerable effort to collect it
Time availability: consumers who face no time restrictions have more
opportunity to search
Number of items being chosen: multiple items conduct a more extensive
search with less variability in search patterns
Kind of information acquired in external search:
1. Brand name information: it is a central node around which other information can be
organized in memory
2. Price Information: it tends to be diagnostic and can be used to make inferences
about other attributes such as quality and value.
3. Information About Other Attributes: depends on which attributes are salient and
diagnostic in the offering category
Consumers can be just as biased in their search for external information as they are during
internal search. Consumers tend to search info that confirms their overall beliefs.
External search follows a series of sequential steps:
1. Orientation, or getting an overview of the product display (mass media and
marketer-related sources)
2. Evaluation, or comparing options on key attributes
3. Verification, or confirming the choice (interpersonal sources)
Early in a search, consumers will use simpler criteria to screen out options and then apply
more detailed decision rules later in the search process.
Two major types of processes are:
, - searching by brand: acquire all the needed information on one brand before moving
on to the next
- searching by attribute: compare brands in terms of one attribute at a time (price)
Customer reports help with viewing information and assessing the best option.
Chapter 8: Judgment and Decision-Making Based on High-Effort
After problem recognition and search, consumers can
engage in some form of judgment or decision-making,
which can vary in terms of processing effort (from high
to low). This chapter looks at high-effort judgment and
decision processes. Judgments serve as inputs into
decision-making, which can be cognitively or affectively
based. Contextual effects also influence this process.
Judgment is the evaluation of an object or estimate of likelihood of an outcome or event.
Decision-making: making a selection among options or courses of action.
Kinds of judgement:
- Estimation of likelihood: judging how likely it is that something will occur (of
something breakingdown)
- Judgment of goodness/badness: evaluating the desirability of something. Affected by
attributes and feelings
When making judgments about likelihood and goodness/ badness, consumers employ an
anchoring and adjustment process, starting with an initial evaluation and adjusting it with
additional information. Imagery, or visualization, also plays a major role in judgments.
Consumers can try to construct an image of an event, such as how they will look and feel
behind the wheel of a new car (can lead to overestimating satisfaction).
The way we mentally account for our money influences judgments about what, when,
where, why, how, and how much we should spend or save, borrow, make payments, and
behave as a consumer over time. Two types of accounting:
- Mental accounting: categorizing spending and saving decisions into “accounts”
mentally designated for specific consumption transactions, goals, or situations.
Vacation, emergency, rent
- Emotional accounting: the intensity of positive or negative feelings associated with
each mental “account” for saving or spending.
Money received under negative circumstances (ill relative) is more likely to be
spent on a utilitarian purchase (such as tuition) than on a hedonic purchase (a
trip) because the utilitarian purchase helps counter the negative feelings.
Judgments are not always objective. Biases and other factors affect judgment in ways:
- Confirmation bias: focus on that confirm what they already believe
- Self-positivity bias: the extent to which they or others are vulnerable to having bad
things happen to them
- Negativity bias: give negative information more weight than positive
- Mood and bias: (1) good mood positive judgement (2) good mood avoid
negative info (3) mood overconfident about the judgment
Chapter 7: Problem Recognition and Information Search
The first step in the consumer decision-making
process involves problem recognition. Next, the
consumer searches for information to solve the
problem either internally from memory or
externally from outside sources.
Problem recognition is the perceived difference between an ideal and an actual state. This
is a critical stage in the decision process because it motivates the consumer to action.
- The ideal state is the way that consumers would like a situation to be (personal
motivations, self-image, social class, reference groups, changes in circumstances).
- The actual state is the real situation as consumers perceive it now. Influenced by
physical factors (running out, malfunction product), needs (hungry,), creative,
external stimuli.
The greater the discrepancy between the actual and the ideal states, and the higher MOA.
Internal search is the process of recalling stored information from memory, step after
recognition of the problem. Biggest part is on what is recalled, four types of recall:
- Brands: set that customer recall from memory
Consideration (or evoked set): he subset of top-of-mind brands evaluated when
making a choice. A small is better ability to recall decreases as size increases.
Studies indicate that consideration sets vary in terms of their size, stability,
variety, and preference dispersion (the equality of preferences toward brands or
products in the set).
Factors that increase the possibility of consumers’ recalling a particular brand:
o Prototypicality: closest to prototype, resemble other category members
o Brand familiarity. Well-known brands
o Goals and usage situations: activations of goal-categories
o Brand preference: positive attitudes
o Retrieval cues: easy identify and remember
- Attributes: summary or simplified form rather than in its original detail. Variables
which influence factors the recall of an attribute are:
Accessibility or availability: having the strongest associative links. Easy to recall.
Done by repeatedly drawing attention
Diagnostic information: helps distinguish objects (vary in price). (competitive
advantage)
Salience: consumers can recall very salient (prominent) attributes even when
their opportunity to process is low
Vividness: Vivid information is presented as concrete words, pictures, or
instructions to imagine or through word- of-mouth communication.
Goals: determine which attribute is recalled from memory. Identify important
goals position the offerings in the context of these goal
Attribute determinance: attribute that is both salient and diagnostic (Rolex tell time
salient, and is craftsmanship as diagnostic attributes)
, - Evaluations: overall evaluations or attitudes (i.e., our likes and dislikes) easier to
remember than specific attribute information form strong associative
Online processing: actively evaluating a brand views an ad
- Experiences: recall of experiences from autobiographical memory in the form of
specific images and the effect associated with them
Three search biases can lead to the recall of information that results in bad judgment:
- Confirmation bias: tendency to recall information that reinforces or confirms our
overall beliefs rather than contradicting them (to maintain consistency in our views)
Selective perception: we see what we want to see
- Inhibition: recall of one attribute inhibiting the recall of another (forget an attribute
or remember but still ignore)
- Mood: consumers engaged in internal search are most likely to recall information,
feelings, and experiences that match their mood
External search: process of collecting information from outside
sources, for example, magazines, dealers, and ads. 2 types:
- Prepurchase search: search for information that aids a
specific acquisition decision.
- Ongoing search: search that occurs regularly, regardless
of whether the consumer is making a choice.
External sources of information:
- Retailer search: visits or calls to stores or dealers
- Media and social media search
- Interpersonal search: advice from friends, relatives, neighbors, coworkers, and/or
other consumers
- Independent search: contact with independent sources of information (books,
websites)
- Experiential search: using product samples or product/ service trials or experiencing
the product online (critical for hedonic products and services)
Information Overload: access to so much information can make customers overloaded.
Depending on the way in which the information is structured, an overload can lead to a
decline in decision quality.
Simulations: Advances in technology and graphics have dramatically improved the online
experience sites that incorporate special and interactive effects (VR)
Online Community: people with a interest or condition related to a product or service go
online to share ideas by using websites, discussion forums, text chat, and other tools.
The level of engagement in external search varies between different factors and situations.
- Motivation to Process Information: motivation increases, search will be more
extensive. Factors which increase search:
Involvement and perceived risk: situational involvement (particular situation) and
enduring involvement (an ongoing response). riskier decisions more external
search activity
, Perceived costs and benefits: search is greater when its perceived benefits are
high relative to its costs
Consideration set: number of attractive alternatives motivated to engage
Relative brand uncertainty: uncertain about which best brand more search
Type of product: Hedonic (unique) more search
Attitudes toward search: like to search for information
Discrepancy of information: search the unknown
Presence of others: don’t like to be watched
- Ability to Process Information: 4 variables affect the extent ability to search:
Consumer knowledge:
o subjective knowledge: the consumer’s perception about what they know
relative to what others know
o Objective knowledge: the actual information stored in memory that can
be measured with a formal knowledge test
Cognitive abilities: higher basic cognitive abilities result in higher ability
Consumer affect: positive affect (efficient processing) negative affect (make
judgments both less efficient and more effortful)
Demographics: certain types of consumers search more than others
- Opportunity to Process Information: factors that affect the search process:
Amount of information available: consumers can do more searching as the
amount of available information increase
Information format: sometimes information is available from diverse sources or
locations, but consumers must expend considerable effort to collect it
Time availability: consumers who face no time restrictions have more
opportunity to search
Number of items being chosen: multiple items conduct a more extensive
search with less variability in search patterns
Kind of information acquired in external search:
1. Brand name information: it is a central node around which other information can be
organized in memory
2. Price Information: it tends to be diagnostic and can be used to make inferences
about other attributes such as quality and value.
3. Information About Other Attributes: depends on which attributes are salient and
diagnostic in the offering category
Consumers can be just as biased in their search for external information as they are during
internal search. Consumers tend to search info that confirms their overall beliefs.
External search follows a series of sequential steps:
1. Orientation, or getting an overview of the product display (mass media and
marketer-related sources)
2. Evaluation, or comparing options on key attributes
3. Verification, or confirming the choice (interpersonal sources)
Early in a search, consumers will use simpler criteria to screen out options and then apply
more detailed decision rules later in the search process.
Two major types of processes are:
, - searching by brand: acquire all the needed information on one brand before moving
on to the next
- searching by attribute: compare brands in terms of one attribute at a time (price)
Customer reports help with viewing information and assessing the best option.
Chapter 8: Judgment and Decision-Making Based on High-Effort
After problem recognition and search, consumers can
engage in some form of judgment or decision-making,
which can vary in terms of processing effort (from high
to low). This chapter looks at high-effort judgment and
decision processes. Judgments serve as inputs into
decision-making, which can be cognitively or affectively
based. Contextual effects also influence this process.
Judgment is the evaluation of an object or estimate of likelihood of an outcome or event.
Decision-making: making a selection among options or courses of action.
Kinds of judgement:
- Estimation of likelihood: judging how likely it is that something will occur (of
something breakingdown)
- Judgment of goodness/badness: evaluating the desirability of something. Affected by
attributes and feelings
When making judgments about likelihood and goodness/ badness, consumers employ an
anchoring and adjustment process, starting with an initial evaluation and adjusting it with
additional information. Imagery, or visualization, also plays a major role in judgments.
Consumers can try to construct an image of an event, such as how they will look and feel
behind the wheel of a new car (can lead to overestimating satisfaction).
The way we mentally account for our money influences judgments about what, when,
where, why, how, and how much we should spend or save, borrow, make payments, and
behave as a consumer over time. Two types of accounting:
- Mental accounting: categorizing spending and saving decisions into “accounts”
mentally designated for specific consumption transactions, goals, or situations.
Vacation, emergency, rent
- Emotional accounting: the intensity of positive or negative feelings associated with
each mental “account” for saving or spending.
Money received under negative circumstances (ill relative) is more likely to be
spent on a utilitarian purchase (such as tuition) than on a hedonic purchase (a
trip) because the utilitarian purchase helps counter the negative feelings.
Judgments are not always objective. Biases and other factors affect judgment in ways:
- Confirmation bias: focus on that confirm what they already believe
- Self-positivity bias: the extent to which they or others are vulnerable to having bad
things happen to them
- Negativity bias: give negative information more weight than positive
- Mood and bias: (1) good mood positive judgement (2) good mood avoid
negative info (3) mood overconfident about the judgment
