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JM602 Consumer Behaviour

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JM602 Consumer Behaviour

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    1. JM602 Consumer Behaviour Lecture 4 – Information search

    3. Material in these slides Primarily drawn from: Neal, Quester and Hawkins (2005). Consumer behaviour: Implications for marketing strategy (4th ed). McGraw-Hill Irwin: Queensland

    4. Information Search What is information search? What are the key types and sources of information used by consumers? What is the difference between evoked, inept and inert sets of brands? Why do consumers engage in information search? The following aspects will be discussed in relation to information search. The following aspects will be discussed in relation to information search.

    5. Lecture overview How is the Internet used as an information source? What are the factors that affect the amount of external information search? What marketing strategies can be developed based on different patterns of search behaviour?

    6. What is the nature of information search? Internal search versus external search Deliberate external search also occurs in the absence of problem recognition: Ongoing search or exploratory research Also a function of individual, product, market and situational factors Following problem recognition, consumers may engage in varying degrees of internal and/or external search, depending on the type of purchase. (See pages 89–90.) Ongoing search or exploratory research. (Note definitions on page 90.)Following problem recognition, consumers may engage in varying degrees of internal and/or external search, depending on the type of purchase. (See pages 89–90.) Ongoing search or exploratory research. (Note definitions on page 90.)

    7. What types of information do consumers seek? The appropriate evaluative criteria for the solution of a problem: The existence of various alternative solutions The performance level or characteristics of each alternative solution on each evaluative criterion Evaluative criteria: The features or desired characteristics of a product required to meet the consumer’s needs; The features the consumer believes a product should have Evaluative criteria: The features or desired characteristics of a product required to meet the consumer’s needs; The features the consumer believes a product should have

    8. Information search in consumer decisions Explicit external information search after problem recognition is limited. This emphasises the need to communicate effectively with consumers prior to problem recognition. Characteristics of the market, the product, the consumer and the situation interact to influence the level of search. (See page 91.)Explicit external information search after problem recognition is limited. This emphasises the need to communicate effectively with consumers prior to problem recognition. Characteristics of the market, the product, the consumer and the situation interact to influence the level of search. (See page 91.)

    9. Suggesting evaluative criteria that match the brand’s strengths See page 92 for details.See page 92 for details.

    10. Brands in Initial Awareness Set Awareness set – the set of brands of which is consumer is aware. Made of: Evoked set – those brands the consumer is willing to consider Inept set – those brands the consumer finds completely unworthy of further consideration Inert set – those brands of which the consumer is aware, but to which she is basically indifferentAwareness set – the set of brands of which is consumer is aware. Made of: Evoked set – those brands the consumer is willing to consider Inept set – those brands the consumer finds completely unworthy of further consideration Inert set – those brands of which the consumer is aware, but to which she is basically indifferent

    11. Categories of Decision Alternatives One way of considering the possibilities is to think about purchasing a television set. As an individual consumer you will not be aware of all brands of TV. The ones that you know make up the awareness set. Within these there are likely to be brands that you believe are not worthy of any further consideration—this is the inept set and these brands will be avoided. Within the others there will be brands that you will consider further—the evoked set—and the inert set: brands that you are indifferent to and would only consider as a back-up brand if the others were not available. One way of considering the possibilities is to think about purchasing a television set. As an individual consumer you will not be aware of all brands of TV. The ones that you know make up the awareness set. Within these there are likely to be brands that you believe are not worthy of any further consideration—this is the inept set and these brands will be avoided. Within the others there will be brands that you will consider further—the evoked set—and the inert set: brands that you are indifferent to and would only consider as a back-up brand if the others were not available.

    12. Awareness and Evoked Sets for Various Products Most consumers, when faced with a problem, can recall a limited number of brands that they feel are probably acceptable solutions. These acceptable brands, the evoked set, are the initial ones the consumer seeks further information about during the subsequent internal and external search process. Therefore marketers should be very concerned that their brands fall within the evoked set of brands. It is noteworthy that only about a third of the ‘awareness’ brands are within the evoked set of brands. (See pages 92–93.)Most consumers, when faced with a problem, can recall a limited number of brands that they feel are probably acceptable solutions. These acceptable brands, the evoked set, are the initial ones the consumer seeks further information about during the subsequent internal and external search process. Therefore marketers should be very concerned that their brands fall within the evoked set of brands. It is noteworthy that only about a third of the ‘awareness’ brands are within the evoked set of brands. (See pages 92–93.)

    13. What information sources do consumers use? Memories of past searches, personal experience and low-involvement learning Personal sources, eg family and friends Independent sources, eg. ‘Choice’ magazine Marketing sources, eg websites, advertising Experiential sources, eg product trial

    14. Information sources for a purchase decision Internal information is the primary source used by the majority of consumers most of the time. This is for the habitual and limited decision making. Some of this information may have been actively acquired through past searches and personal experience. External information can be obtained through independent groups, such as consumer groups, personal contacts, marketing sources (such as advertising or sales staff), and experimentally (e.g. by trying the product). (See page 95.) Internal information is the primary source used by the majority of consumers most of the time. This is for the habitual and limited decision making. Some of this information may have been actively acquired through past searches and personal experience. External information can be obtained through independent groups, such as consumer groups, personal contacts, marketing sources (such as advertising or sales staff), and experimentally (e.g. by trying the product). (See page 95.)

    15. Sources of Information for Services While marketing influences the information search for services information, research shows that personal sources are very important. (See page 96.)While marketing influences the information search for services information, research shows that personal sources are very important. (See page 96.)

    16. Information Search on the Internet 2004 survey—>80% Australian population have a computer Most important reasons for ‘surfing’ were: ‘to look for information’ (40%), ‘leisure’ (19%), ‘to shop’ (18%) Internet is the most popular information source for students (2003 survey) Over half of e-shoppers are women, taking over from males 73% of those with Internet at work use it every morning Many changes have occurred recently in the way consumers gain access to information. With over half of the Australian population accessing the Internet at least once a month, this is becoming an important source, and Internet advertising expenditure has also greatly increased: it has almost doubled in the last 2 years. The most popular use is still to access information, however, online shopping is increasing as consumers gain more confidence in the security of their financial details. The gender balance is changing from male dominance. The net is quickly taking over as the daily ‘newspaper’: 73% of people with access use it on a daily basis. (See page 97 for the range of activities that Australians use the Internet for.)Many changes have occurred recently in the way consumers gain access to information. With over half of the Australian population accessing the Internet at least once a month, this is becoming an important source, and Internet advertising expenditure has also greatly increased: it has almost doubled in the last 2 years. The most popular use is still to access information, however, online shopping is increasing as consumers gain more confidence in the security of their financial details. The gender balance is changing from male dominance. The net is quickly taking over as the daily ‘newspaper’: 73% of people with access use it on a daily basis. (See page 97 for the range of activities that Australians use the Internet for.)

    17. Marketing Strategy and Information Search on the Internet Companies need to ask: Should we have a web site? What is the purpose of the site to be? Information only Company and product/service information To actively attract customers A shopping site (See page 99 for details. Examples can be used in the lecture to show the range of uses.)(See page 99 for details. Examples can be used in the lecture to show the range of uses.)

    18. How much external information search do consumers do? Measures used No. of stores visited No. of alternatives considered No. of personal sources used Overall or combination measures External information search is skewed towards limited search See page 99 for discussion.See page 99 for discussion.

    19. Amount of External Search for Appliances See page 100.See page 100.

    20. Classification of Searchers Non-searchers: do not engage in information search before purchasing Limited information searchers: undertake limited information search before purchasing Extended information searchers See page 100 for definitions of these.See page 100 for definitions of these.

    21. Information Searching Behaviour See page 101.See page 101.

    22. What other factors affect the amount of information search? Costs vs Benefits of External Search It is often suggested that consumers should engage in relatively extensive external search prior to purchasing an item. However, this view ignores the fact that information search is not free. It takes time, energy and money, and can often require giving up more desirable activities. Therefore, consumers engage in external search only to the extent that the expected benefits, such as a lower price or a more satisfactory purchase, outweigh the expected costs. (See pages 101–102.)It is often suggested that consumers should engage in relatively extensive external search prior to purchasing an item. However, this view ignores the fact that information search is not free. It takes time, energy and money, and can often require giving up more desirable activities. Therefore, consumers engage in external search only to the extent that the expected benefits, such as a lower price or a more satisfactory purchase, outweigh the expected costs. (See pages 101–102.)

    23. Market characteristics Marketing characteristics tend to increase the external search for information. The role of the marketer is to anticipate this and provide the relevant information through these sources. (See page 102.)Marketing characteristics tend to increase the external search for information. The role of the marketer is to anticipate this and provide the relevant information through these sources. (See page 102.)

    24. Product characteristics Depending on the product characteristics, consumers tend to search more for expensive items, those products that are differentiated (usually the expensive items), and items that they see as being worthwhile, such as clothes, speciality food items rather than ordinary supermarket items, sports equipment, and the like. (See pages 103, 104–105.)Depending on the product characteristics, consumers tend to search more for expensive items, those products that are differentiated (usually the expensive items), and items that they see as being worthwhile, such as clothes, speciality food items rather than ordinary supermarket items, sports equipment, and the like. (See pages 103, 104–105.)

    25. Consumer characteristics More experience tends to shorten the search. For example a person who has purchased several computers or cars may reduce the search time to a basic level as opposed to someone new to the market who may conduct an extensive search. Social status and perceived risk tend to increase the search effort. (See page 106.)More experience tends to shorten the search. For example a person who has purchased several computers or cars may reduce the search time to a basic level as opposed to someone new to the market who may conduct an extensive search. Social status and perceived risk tend to increase the search effort. (See page 106.)

    26. Situational characteristics As we have discussed in a previous lecture, situational influences affect the consumer’s external search behaviour. Time availability, surroundings and the inherent energy of consumers all tend to increase the amount of searching. Individuals tend to search less for products intended for themselves. The social surroundings can have a mixed effect, depending on whether they are a distraction or whether there are benefits from extending the search, e.g. they may impress friends by their thoroughness! (See page 107.)As we have discussed in a previous lecture, situational influences affect the consumer’s external search behaviour. Time availability, surroundings and the inherent energy of consumers all tend to increase the amount of searching. Individuals tend to search less for products intended for themselves. The social surroundings can have a mixed effect, depending on whether they are a distraction or whether there are benefits from extending the search, e.g. they may impress friends by their thoroughness! (See page 107.)

    27. Marketing Strategies Based on Information-Search Patterns Marketers can use this chart to guide the selection of strategies. Whether the brand is in the evoked set or not is a major determinant. Another determinant is where the target market’s decision-making lies on the continuum from ‘no search’ to ‘extended search’. This allows us to draw up a number of possible strategies. (See page 107.) Marketers can use this chart to guide the selection of strategies. Whether the brand is in the evoked set or not is a major determinant. Another determinant is where the target market’s decision-making lies on the continuum from ‘no search’ to ‘extended search’. This allows us to draw up a number of possible strategies. (See page 107.)

    28. Strategies (habitual decisions) Maintenance strategy If target market purchases brand habitually, then the strategy is to maintain that behaviour Defend against disruptive tactics Constant activity + interest Disrupt strategy If brand is not in evoked set, then marketer needs to disrupt normal buying patterns Attention-seeking ads Free samples or bonus encouraging trial Capture strategy Constant supply + quality Continue limited search A maintenance strategy is suggested if the product is in the evoked set and consumers are habitual buyers. An example could be a leading fast food company who use this strategy by introducing chicken products and salad products to counteract moves by the competition. A capture strategy relies on retaining consumers by continuing to supply consistent product and encouraging them to continue with a limited search pattern. An extended search is discouraged, as they may find a better product! A preference strategy is used when searching is likely. The ‘right’ information and advice is provided wherever they are likely to search, e.g. sales assistants need to be briefed to direct them to your brand. (See pages 107–111.)A maintenance strategy is suggested if the product is in the evoked set and consumers are habitual buyers. An example could be a leading fast food company who use this strategy by introducing chicken products and salad products to counteract moves by the competition. A capture strategy relies on retaining consumers by continuing to supply consistent product and encouraging them to continue with a limited search pattern. An extended search is discouraged, as they may find a better product! A preference strategy is used when searching is likely. The ‘right’ information and advice is provided wherever they are likely to search, e.g. sales assistants need to be briefed to direct them to your brand. (See pages 107–111.)

    29. Limited decision making Capture strategy: If the existing brand is one of the brands in the evoked set then the objective is to capture as large a share of purchases as possible Provide additional information to consumers Use co-operative advertising, Point of purchase (POP) displays, adequate shelf space Intercept strategy Must intercept consumer during search for information on brands in evoked set attract attention, POP display Product improvements, etc.

    30. Extended decision making Preference strategy Search locations must be anticipated, e.g. Chemists POP + sales assistance Acceptance strategy Motivate the consumer to learn about the brand Advertise but don’t ‘sell’ the brand Encourage consumer to seek information

    31. Next Lecture… Evaluating and Selecting Alternatives

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