Chapter-15: Problem Recognition

Chapter-15: Problem Recognition

Types of Consumer Decisions:

There are a myriad of decision options possible for the consumer in today’s market economy. These options, however, may be distilled into five main types of decisions:

(i) What to buy: Deciding what to buy is one of the consumer’s most basic tasks. No buying activity may take place unless this fundamental decision is made. A consumer’s product or service decision may encompass not only the generic category of products desired, such as appliances, but more specifically, the narrower range of items, such as kitchen appliances. Consumer must even make decision on brands, price, and product features.

(ii) How much to buy: A second basic decision by the consumer relates to how much of the item will be purchased. For example, when shopping for groceries the consumer must determine whether three litters of coke will be purchased or more.

(iii) Where to buy: The consumer needs to decide where the selected product or service will be purchased. This is very important decision, which interacts thoroughly with the previous decision on what to buy. Two products, although physically the same, are likely to perceived differently because of other facts associated with them. For example, consider an air conditioner sold with delivery, installation, and in-home servicing guaranteed by a full-service department store compared with the same model priced lower.

(iv) When to buy: The consumer must also determine when to buy. This decision is influenced by such factors as urgency of the need and availability of the chosen item. Other elements such as store opening times, periods of sales and clearances, availability of transportation, and freedom of family members to shop all the bearing on when one purchase.

(v) How to buy: The decision of how to buy is another complex issue. Many factors influence how the consumer buys. To indicate merely a few of the elements involved, consider some alternative strategies consumers use: shop extensively or buy for the first layout, pay cash or charge it, have it delivered or take it home.

Numerous purchasing patterns occur in the marketplace, with each consumer relying on whatever strategy seems to work well for himself. The problems that consumers must solve, however, could benefit from the cold logic of a computer rather than the hit or miss decision approach taken by some consumers.

Introduction to the Consumer Decision-Process Model:

Consumer decision processes vary considerably in their complexity. Most of the decisions consumers are required to make are probability rather simple ones such as the purchase of staple foods. However, consumers also must make decisions that are comparatively complicated, such as when buying durable goods. The range of difficulty of consumer decision processed extends even further to problem solving that may be characterized as being highly complex. The range of consumer problem solving approaches can be placed on a spectrum from routine problem solving, to limited problem solving, to extensive problem solving.

(i) Routine Problem Solving (RPS): When consumers buy a brand they have purchased before, it usually involves little or no information seeking and is performed quickly. Consumers are brand loyal and tend to buy in a habitual, automatic, and unthinking way.

(ii) Limited Problem Solving (LPS): When consumers buy a new brand in a familiar product category, it usually involves a moderate amount of information seeking and time in choosing.

(iii) Extensive Problem Solving (EPS): When consumers buy in an unfamiliar product category, it usually involves the need to obtain substantial information and a longer time to choose. They must form a concept of the new product category and determine the criteria to be used in choosing a brand.

However, it has been suggested from certain purchase situations some consumers do not engage in a pre-purchase decision process. For example, they may not have stored information, it may not be retrieved or retrievable, and they may not search externally.

Problem Recognition:

Problem recognition results when a consumer recognizes a difference of sufficient magnitude between what is perceived as the desired state of affairs and what is the actual state of affairs, enough to arouse and activate the decision process. The actual state refers to the way in which a need id already being met and the desired state is the way a person like for the need to be satisfied.

Consumers must become aware of the problem or need through processing of information arising internally or externally. They then become motivated. The process of problem recognition means that the consumer becomes aroused and activated to engage in some purposeful purchase-decision activity.

Types of Problem Recognition: Rather than viewing problem recognitions occurring in only one way, it is useful to understand that there may be varying types of problem–recognition processes. One approach has been to develop a classification system of situations based on the factors of immediacy or required solution and whether or not the problem was expected.

(i) Immediacy of problem solution is a relevant factor in determining the decision time horizon; that is, how soon a problem solution is needed, will affect the length of decision process and intensity of decision effort.

(ii) Expectancy of the problem can affect such facets as the sources of information used in the decision process, for example, as well as the number of alternative considered.

(iii) Routine problems are those in which the difference between actual and desired states is expected to occur and an immediate solution is required. Typically, convenience goods are associated with this type of problem-recognition, such as most grocery purchases are made by consumers.

 (iv) Emergency problems are those that are unexpected in which immediate solutions are necessary. For instance, a consumer who is involved in an automobile accident and totals his car may need a quick solution to his transportation problem.

(v) Planning problems occur when the problem occurrence is expected but an immediate solution is not necessary. For instance, a consumer who expects that his car will only last one additional year may begin to engage in window shopping for autos, have discussed with friends about various brands, and pay closer attention to automotive ads.

(vi) Evolving situations occur when the problem is unexpected but no immediate solution is required. The fashion-adoption ordinarily occurs over a lengthy period of time for many consumers.

Situations Leading to Problem Recognition: There are numerous situations that may cause consumer problem recognition to occur. Although discussion of all the potential sources is impossible, we can present the most significant reasons and explain briefly how each one might arise.

(i) Depleted or inadequate stock of goods: The consumer uses up the assortment of goods she has and must repurchase in order to re-supply her needs. As long as there still is a basic need for the item, problem recognition should result from its consumption. Sometimes the consumer’s stock of goods is inadequate for even her everyday needs and may require a purchase. For instance, she may want to install a bracket for hanging planter but finds that she doesn’t have t necessary tools such as ruler, a drill and screwdriver.

(ii) Discontentment with the stock of goods: Frequently, consumers become discontented with products they own, and this leads to problem recognition. For example, men’s ties and jacket lapels narrow and widen as fashion cycle progress. Consequently, men may feel their clothing is no longer stylish, and they may desire to update their wardrobes. Even though the old clothes might be perfectly serviceable, they may be an embarrassment to wear. As a result, this problem is resolved by purchasing some of the latest fashion.

(iii) Changing environmental circumstances: Consumers sometimes encounter changes in their environmental circumstances, which lead to problem recognition. One of the most significant of these situations in the family’s changing characteristics. Different lifecycle stages produces need for different products.

(iv) Changing financial circumstances: The financial status of the consumer has a very important relationship to problem recognition. The present or anticipated financial picture may trigger problem recognition as the consumer determines what purchases can be afforded.

(v) Marketing activities: The marketer frequently attempts to precipitate problem recognition thorough promotional efforts aimed at the consumer. With such efforts, the marketer seeks to have the consumer perceive a difference of sufficient magnitude between her desired state (ownership of the product) and her actual state (not owing it) to engage in search, evaluation, and purchasing activity for the marketer’s brand.

Results of Problem Recognition: Once the consumer becomes aware of a problem, two basic outcomes are possible. One result is for the consumer, in effect, not to pursue any further problem-solving behavior, which might occur if the difference between the consumer’s perceived desired and actual states is not great enough to cause him to act to resolve the difference. Another situation in which problem recognition may not lead to further stages of consumer decision making occurs when certain environmental elements preclude it.

Marketing Implications of Problem Recognition:

The significance to marketers of the problem-recognition stage of consumer decision-making is that the process can be effectively measured and can be used to develop and evaluate marketing strategies.

(i) Measuring problem recognition: Consumer researchers have found that the best way to assess the problem-recognition process is through scaling techniques, which measure purchase intentions. Purchase intentions incorporate the consumer’s attitudes toward the product and may be viewed as the mental forerunner of buying behavior.

(ii) Activating problem recognition: Promotion is an important vehicle used by marketers to cause problem recognition to occur among potential customers. Marketers often seek to influence consumer’s desired states such as in much of the advertising stressing benefits of product ownership. Consumer’s actual states often develop into situations that are routine, habitual, or unnoticed patterns of behavior. Many marketing activities, therefore, are designed based on the assumptions that buying occurs shortly before actual consumption.

(iii) Utilizing problem recognition information: The marketers need to analyze the purchase intention categories. For example, measuring the speed, direction, and size of shifts in buying. The market may also find significant implications for his marketing strategy by investing the relationship between purchasing intentions and buying behavior.