Week 9: Problem Recognition

Problem Recognition in Consumer Decision Process

• The five-stage decision process, introduced by John Dewey in 1910, serves as the central pillar of a popular consumer behavior model.
• The five stages are Problem Recognition, Information Search, Alternative Evaluation, Choice, and Outcomes.
• The Problem Recognition stage is often overlooked in theoretical discussion and empirical support.
• A purchase cannot occur unless a problem is recognized.
• Problem Recognition is based on the interaction between the desired state and the actual state.
• Problem Recognition occurs when a significant difference develops between a person's desired state and actual state with respect to a particular want or need.
• The size of the discrepancy needs to be large enough to be perceived to attract attention.
• There are two types of Problem Recognition: generic and selective.
• Depending on the complexity of the problem, the time it takes to acknowledge the need may be short or long.
• Several authors suggest that the cause of Problem Recognition is departure from homeostasis.
• There are at least two kinds of homeostasis, static and dynamic.
• Dynamic homeostasis can be brought on by changes in either state, and adjustments can occur over time in behavior due to learning.

The Consumer Problem Recognition Process: Determinants and Outcomes

• The Problem Recognition process is complex and involves multiple determinants and paths.
• The process starts with Information Processing based on the consumer's Memory and Motives.
• If there is no perceived discrepancy between the desired and actual state, the consumer experiences the Ideal State.
• A person may perceive a discrepancy but not initiate Consumer Action due to various reasons, including denial, excuses or not seeing it as a consumer problem.
• The Nature of the Discrepancy determines whether Opportunity Recognition or Need Recognition is triggered.
• Consumer Problem Recognition is the "first" stage in consumer decision-making models.
• Problem Recognition and Problem Delineation usually occur simultaneously, but complex problems may require information search.
• After defining the problem, ten distinct outcomes may occur, with four involving No Consumer Action and six involving Consumer Action.
• No Consumer Action may be taken due to an Insufficient Discrepancy, Low Importance, Insufficient Resources or Insufficient Information.
• Insufficient Resources is a common reason for consumer inaction, with consumers desiring but not being able to afford certain goods or services.
• Low Importance is related to Insufficient Resources as a reason for No Consumer Action, with consumers prioritizing needs based on their income.
• Insufficient Information may prevent consumers from taking action on important products or services due to lack of knowledge or guidance.

Consumer Action and Factors Affecting Desired and Actual States

• Low involvement decisions involve limited internal information search and are often unplanned or impulse purchases.
• Higher involvement decisions involve active external information search and consulting friends, ads, and visiting stores.
• Purchase intention is a vital determinant of many later consumer behaviors.
• Consumers may acquire resources needed to buy the desired good or service through saving or borrowing.
• Objections are valid reasons why a person may not yet buy, and complaints may arise from dissonance or dissatisfaction with a past purchase.
• Reference groups, novelty, and thinking are factors that usually affect the desired state.
• Reference groups are an important source of information concerning what one desires.
• Novelty or variation is a common reason for consumers to change brands.
• Autistic thinking, or thinking about possible positive consequences of undertaking behavior, can be a source of arousal of desire.
• Assortment deficiency, arousal of needs, and post-purchase evaluation are factors that usually affect the actual state.
• Assortment deficiency is perhaps the most common source of discrepancy between the desired state and the actual state.
• Post-purchase evaluation can result in satisfaction or unpleasant dissonance or dissatisfaction.

Factors Affecting Problem Recognition in Consumers

• Problem Recognition can be triggered by changes in desired or actual state.
• Financial considerations, such as salary changes, can affect the perceived state.
• Previous decisions and purchases can influence the desired and actual states.
• Family characteristics, such as marriage or having a child, greatly affect desires for products.
• Culture and social class also impact one's perceived state of affairs.
• Individual development, such as maturing, can alter desires for products.
• The current situation, such as limited time or weather, can influence desired and actual states.
• Marketing efforts can influence both desired and actual states.
• Advertising, publicity, personal selling, and displays can impact consumers' perceptions of their desired state.
• Marketers can also influence consumers' perception of the actual state.
• A change in perception of the actual state can lead to Problem Recognition.
• Thorough research on Problem Recognition can be found in the Appendix.

The Importance of Problem Recognition in Consumer Action

• Problem Recognition is necessary but not sufficient for consumer action
• Analyzing consumer problems and activating Problem Recognition are critical marketing activities
• Strategies for triggering Problem Recognition may not work when consumers are stuck in inactivity mode
• Expectations about financial status can affect perceptions of desired or actual states
• Cultural norms serve as guidelines for lifestyle and can affect consumer behavior
• Lack of resources can hinder consumer action, but marketers can minimize costs to the target market
• Loans, savings plans, and adjusting product preparation processes can help minimize resource costs for consumers
• Changing what is important to consumers can be difficult but necessary to activate Problem Recognition
• Insufficient information can hinder consumer action, so providing information is crucial
• Selective Problem Recognition is preferred for brand preference, while generic Problem Recognition can be appropriate in some situations
• Understanding target market style is important for effective appeals in activating Problem Recognition
• Proper channels of information to reach different Problem Recognition Types can be effective, but sources beyond the marketer's control can also be important.