Lesson 3 Videos Flashcards
Need Recognition
The difference between consumers’ actual and desired states
The need recognition process centers on the degree of discrepancy between the actual state and desired state
Degree of discrepancy
Discrepancy between the desired state and actual state
Below the threshold: No need recognition
At or above the threshold: Need recognition
Understanding need recognition may identify a segment with…
…unsatisfied desires
Unsatisfied needs help identify new business and…
…product opportunities for the future
Analyzing need recognition can reveal…
…existing barriers
How Companies Can Activate Need Recognition
Change consumers’ desired state with new products or innovations
Influence how consumers perceive their current state
Generic (primary) need recognition
Selective (secondary) need recognition
Generic (primary) need recognition
occurs when companies seek to grow the size of the total market for a product category
Generic (primary) need recognition
occurs when companies seek to grow the size of the total market for a product category
Selective (secondary) need recognition
the result of stimulating the need for a specific brand within a category
Search
The motivated acquisition of knowledge stored in memory or acquisition of information from the environment
Internal search
involves scanning and retrieving decision-relevant knowledge stored in memory
External search
involves collecting information from the environment
What to Search?
Which choice alternatives should the consumer search?
Those choice alternatives that consumers gather information about during pre-purchase search are referred to as the external search set
Depending on the consumer’s experience and the importance of the decision, a considerable amount of effort may be invested into identifying search set members
Consumers must also decide what they wish to learn about each of the set members
Consumers are more likely to rely upon the opinions of…
…other individuals than information sources with vested interests in their decisions
Other consumers respected for their expertise in a particular product category are referred to as…
…opinion leaders or influentials
Particular search words or phrases used by consumers fall into three categories
70% Generic terms; representing product categories
20% Specific retailers; e.g., Best Buy, Home Depot, etc.
10% Specific products; e.g., Canon digital camcorder, HP notebook, etc.
Consumers are increasingly turning to _____ for their search needs
the Internet
Traditional advtg triggers online searches
The top motivators for starting online search are:
Ads in magazines: 47.2%
Articles: 43.7%
TV ads: 42.8%
Newspaper ads: 42.3%
___ Of Consumers Are More Likely To Buy Products From Amazon Than Other E-Commerce Sites Forbes
89%
The relationship b/w the amount of pre-purchase search and the level of consumer knowledge is in ht shape of an
upside down parabola
How Companies Benefit from Understanding Search
Adjusting the breadth of a product line based on consumers’ willingness to search
Monitoring consumers’ price comparison activities to gauge their price sensitivity
Focus promotions on sources that consumers search most, including individuals that provide information
Monitor search activities to identify new ways to reach and gain customers
Pre-purchase Evaluation
The evaluation of choice alternatives
Intertwined with the search process
Pre-purchase Evaluation
Forming the Consideration Set
How Companies Can Get Into Consumers’ Consideration Sets
Ask to be in the set
Offer incentives
Modify the product offering
Consideration set
alternatives considered during decision making (also known as the evoked set)
Pre-purchase Evaluation
Deciding How to Evaluate the Choice Alternatives
Rely on preexisting product evaluations stored in memory
Construct new evaluations based on information acquired through internal or external search
Direct Experience
prior purchase or consumption experiences with product
Indirect Experience
experiences or impressions gained second-hand
Evaluating Alternatives:
The Categorization Process
the evaluation of a choice alternative based on the evaluation of the particular category to which it is assigned.
Categories may be general (drinks) or
specific (colas)
Evaluation of a category can be transferred to a new product assigned to that category
‘Brand extensions’ allow firms to use categorization to their advantage
Latent Needs
hidden needs that consumers don’t know what they need until you give it to them
Evaluating Alternatives:
The Piecemeal Process
constructing an evaluation of a choice alternative by considering its advantages & disadvantages along important product dimensions
Determine the particular criteria or product dimensions to be used in evaluation
Evaluate each considered alternative based on the identified criteria
Cutoffs restrictions or requirements for acceptable performance
Signals: product attributes used to infer other product attributes (e.g., using high price to infer higher quality, using retail image to infer quality, using packaging, etc.)
Constructing New Evaluationsby the Piecemeal Process:
Noncompensatory Evaluation Strategies
a product’s weakness on one attribute cannot be offset by strong performance on another attribute
-Lexicographic strategy.
-Elimination by aspects strategy.
-Conjunctive strategy.
Lexicographic strategy
brands are compared initially on the most important attribute, and the winner is chosen.
If more than one brand is evaluated similarly (close tie) on that attribute, the second most important is considered, and so on, until a winner is identified.
Elimination by aspect
similar to the lexicographic strategy; however, the consumer imposes cutoffs. Eg: must be under $20, etc.
If only one brand meets the cutoff on the most important attribute it is chosen. If many brands meet the cutoff, then the next most important attribute is evaluated & the process continues until the tie is broken.
Compensatory Evaluation Strategies
a perceived weakness of one attribute may be offset or compensated for by the perceived strength of another attribute.
Did you notice in the earlier example that poor Brand D despite its “excellent” ratings on 3 attributes was never chosen…this is not the case in Compensatory evaluation.
Simple additive
Weighted additive
Simple additive
the consumer counts or adds the number of times each alternative is judged favorably in terms of the set of salient evaluative criteria. The alternative with the largest number of positive attributes is chosen.
Weighted additive
judgments about an alternative’s attribute performance are weighted by the attribute’s importance. The alternative with the best overall performance is chosen.
Marketers need to understand evaluation strategies because they affect consumer choice.
- For example if customers use a ‘lexicographic’ strategy with “quality” being the most important attribute - the firm could use advertising campaigns to directly enhance the “quality” perception.
- For example in the earlier example if consumers use a ‘conjunctive’ strategy with cutoffs of ‘good’ then improving the brand’s “taste” would be of little value since its “nutrition” rating of ‘poor’ is unacceptable.
- Changing the cutoffs is another marketing
mechanism for altering choice.
Self Positivity Bias
we all have it–when you think your immune to danger
