Lecture 8

Question 1

Problem recognition

Answer 1

Problem recognition is the perceived difference between an actual and an ideal state. This triggers consumers to take action (ie search for information)

Ideal state influenced by past experience, future goals or aspirations and transition in life

Question 2

Actual va ideal state

Answer 2

Actual state is the way things actually are

Stimulate dissatisfaction with actual site (via marketing communications)

Ideal state is the way we want things to be

Promote a new ideal state (via marketing communications)

Question 3

Internal search

Answer 3

Internal search is problem solving based on information stored in memory, so brands / attributes / evaluations / experiences

Question 4

Internal search for brands

Answer 4

Consideration set = the subset of top of the mind brands when making a choice

Inclusion in the consideration set is influenced by prototypically, brand familiarity, goals and usage situations and brand preference

Question 5

Internal search for attributes

Answer 5

Consumers recall some info but (not all) attributable info (eg product price: expensive va cheap)

The recalled attibute information strongly influences brand choice

Attribute recall is influenced by:

Accessibility / diagnostically / goals

Question 6

Internal Search for biases

Answer 6

Confirmation bias > recall of info that reinforces our overall beliefs rather than contradicting them

Inhibition > recall of one attribute prevents the recall of another attribute ( due to limitation of internal processing capabilities

Mood > recall of info that matches consumers mood (eg good mood enhances recall of positive attribute)

Question 7

External search

Answer 7

External search is problem solving based information from outside sources

Collecting info: which brands, which attributes, which benefits

Pre purchase system/ search for info for specific buying decision (ie in response to problem recognition)

Ongoing search: search on regular and continual basis (ie result from enduring involvement, not problem recognition)

Question 8

Touchpoints

Answer 8

Any direct or indirect brand encounter

Question 9

External info search: classification by media type

Answer 9

Paid = touchpoints or media activities that a company (or its agent) generates eg tv, online ad

Owned = touchpoints or media activities that a company (or its agent) directly controls eg website, stores

Earned = touchpoints or media activities that is not controlled by the company (or its agents) but generated by third parties eg wom, reviews

Question 10

3 earned media touchpoints

Answer 10

Traditional earned media
Social earned media
Peer observations

Question 11

External info: classification by brand

Answer 11

Brand owned + partner owned + consumer owned = Brwnd

Question 12

External info: classification by ownership / control

Answer 12

Brand owned touchpoints = are designed and managed by the firm and under the firms controls eg brand owned media (ad, websites) brand controlled elements of the marketing mix (product packaging)

Partner owned touchpoints = are jointly designed, managed or controlled by the firm and its partners. Eg marketers agencies distribution (retailers external sales force )

Consumer owned touchpoints = are consumer actions that the firm or its partner do not influence or control (eg peer influence wom, reviews or review sites or social media

Question 13

Drivers of external search

Answer 13

Involvement and perceived risk 
Consideration set 
Attitudes towards search 
Perceived costs and benefits 
Relative brand uncertainty 
Discrepancy of info

Question 14

External info search: managerial implications

Answer 14

Increasing purchase by:

Making info readily available and easily accessible (but do not overload)

Providing info about diagnostic attributes

Matching the amount of info with the product type

Segmenting markets based on search activities
Not separating online and offline activities

Question 15

Key takeaways

Answer 15

Problem recognition triggers consumer search: managers can either influence the actual or ideal state to facilitate problem recognition

Consumers first search for information internally (ie based on info from memory) then externally (ie based on external sources)

The consideration set is crucial for decision making, it contains the subset of top of mind brands that consumers initially take into account

Companies can use a variety of external sources to gather info; companies need to identify the relevant touchpoints

Need to distinguish between paid owned and earned offline and online brand partner and consumer owned touchpoints