Consumer Behavior

Roger D. Blackwell
Paul W. Miniard
James F. Engel

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 CHAPTER 4

Pre-Purchase Processes:
Need Recognition, Search,
and Evaluation
Need Recognition
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
Need Recognition Process
Need Recognition Process
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
How Companies Can Activate
Need Recognition
How Companies Can Activate
Need Recognition
Change consumers’ desired state
with new products or innovations

Influence how consumers perceive

their current state
How Companies Can Activate
Need Recognition
Change consumers’ desired state
with new products or innovations

Influence how consumers perceive

their current state

Remind consumers of a need

How Companies
Can Activate
Need
Recognition
Generic need
recognition
occurs when
companies seek
to grow the size
of the total
market for a
product
category
How Companies Can Activate
Need Recognition

Selective need
recognition is the
result of
stimulating the
need for a
specific brand
within a category
Search
Search
The motivated acquisition of
knowledge stored in memory or
acquisition of information from the
environment
Internal Search
Internal search involves scanning
and retrieving decision-relevant
knowledge stored in memory
Internal Search
External Search
External search involves collecting
information from the environment
During external search, consumers
may gather information from a variety
of sources including:
- Advertisements
- Magazines
- Internet
- Friends and family members
External Search

When motivated by an upcoming

purchase decision, external search
is known as pre-purchase search
External Search

When information acquisition takes

place on a relatively regular basis,
regardless of sporadic purchase
needs, it is known as ongoing
search
External Search

External search can occur:

to make better consumption
choices
to create a knowledge base for
future decisions
simply for enjoyment
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
What to Search?

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
Where to Search?
Different informational sources are
available to the consumer
Where to Search?
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
Consumer Search on the Internet
Consumers are increasingly turning
to the Internet for their search needs
Consumer Search on the Internet

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,
Gateway.com
10% Specific products; e.g., Canon digital
camcorder, HP notebook
Consumer
Search
on the
Internet
How Much Do Consumers
Search?
Cost versus benefit perspective:
people search for decision-relevant
information when the perceived
benefits of the new information are
greater than perceived costs of
acquiring the information
How Much Do Consumers
Search?
Cost versus benefit perspective:
people search for decision-relevant
information when the perceived
benefits of the new information are
greater than perceived costs of
acquiring the information
Benefit: making better decisions
Cost: time/effort spent searching
How Much Do Consumers
Search?
While making better purchase decisions is
the primary benefit of pre-purchase
search, this benefit depends on the
perceived risk involved
- Perceived risk represents consumers’
uncertainty about the potential positive
and negative consequences of the
purchase decision
Consumers’ Knowledge and the
Amount of Search
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
How Companies Benefit from
Understanding Search
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
Pre-purchase Evaluation
The evaluation of choice
alternatives
Intertwined with the search
process
Pre-purchase Evaluation
Forming the Consideration Set
Pre-purchase Evaluation
Consideration set: alternatives
considered during decision making
(also known as the evoked set)
How Companies Can Get Into
Consumers’ Consideration Sets
Ask to be in the set
Offer incentives
Modify the product offering
Constructing the Consideration
Set Primarily from Memory
Retrieval set: consideration set that
depends on recall of alternatives
from memory
Constructing the Consideration
Set Primarily from Memory
Retrieval set: consideration set that
depends on recall of alternatives
from memory
Not all alternatives retrieved from
memory will be considered
Consumers limit their consideration
to those alternatives toward which
they are favorably predisposed
Constructing the Consideration
Set Without Prior Knowledge
Consumers may talk to others or
consider all brands in the store
Constructing the Consideration
Set Without Prior Knowledge
Consumers may talk to others or
consider all brands in the store
External factors have greater oppor-
tunity to affect consideration set
with less knowledgeable consumers
than when search is from memory
Recognition of brands or products
at point of sale is important to get
into consumers’ consideration set
Evaluating Alternatives
Deciding How to Evaluate
Choice Alternatives
Rely on preexisting product
evaluations stored in memory
Direct Experience: prior purchase or
consumption experiences with product
Indirect Experience: experiences or
impressions gained second-hand
Deciding How to Evaluate
Choice Alternatives
Rely on preexisting product
evaluations stored in memory
Direct Experience: prior purchase or
consumption experiences with product
Indirect Experience: experiences or
impressions gained second-hand
Construct new evaluations based
on information acquired through
internal or external search
Evaluating Alternatives
Constructing New Evaluations
The Categorization Process: the
evaluation of a choice alternative
based on the evaluation of the
category to which it is assigned
Constructing New Evaluations
The Categorization Process: the
evaluation of a choice alternative
based on the evaluation of the
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
Constructing New Evaluations
The Piecemeal Process:
constructing an evaluation of a
choice alternative by considering its
advantages and disadvantages
along important product
dimensions
Constructing New Evaluations
The Piecemeal Process:
Determine the particular criteria or
product dimensions to be used in
evaluation
Evaluate each considered alternative
based on the identified criteria
Cutoff: restriction or requirement for
acceptable performance
Signals: product attributes used to infer
other product attributes (e.g., using
high price to infer higher quality)
Consumer Perceptions
Based on Signals
Constructing New Evaluations
Noncompensatory Evaluation
Strategies: a product’s weakness
on one attribute cannot be offset
by strong performance on another
attribute
Constructing New Evaluations
Noncompensatory Evaluation
Strategies

Lexicographic strategy: brands are

compared initially on the most
important attribute, and the winner is
chosen. If more than one is evaluated
similarly on that attribute, the second
most important is considered, and so
on, until a winner is identified.
Constructing New Evaluations
Noncompensatory Evaluation
Strategies
Elimination by aspects: similar to the
lexicographic strategy; however, the
consumer imposes cutoffs
Conjunctive strategy: each brand is
compared, one at a time, against a
set of attributes which is established
for each salient attribute. If a brand
meets the cutoffs for all attributes, it
is chosen.
Constructing New Evaluations
Noncompensatory Evaluation
Strategies
Constructing New Evaluations
Compensatory Evaluation
Strategies
Constructing New Evaluations
Compensatory Evaluation
Strategies: a perceived weakness of
one attribute may be offset or
compensated for by the perceived
strength of another attribute
Constructing New Evaluations
Compensatory Evaluation
Strategies
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.
Constructing New Evaluations
Compensatory Evaluation
Strategies
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.
How Good Are We at Evaluating
Alternatives?

Consumers are often not very good at

figuring out which alternative is best
for them
- Tend to rely on certain signals (e.g., price,
brand name, warranty, package) to make
inferences about a product quality; however,

such signals may be inaccurate

- Often possess limited abilities to accurately
evaluate choice alternatives