Problem Recognition and

UNIT 12 _PROBLEM RECOGNITION AND Information Search Behaviour

INFORMATION SEARCH
BEHAVIOUR
Objectives
By the time, you have completed this unit, you should be able to:
• describe the importance of problem recognition in the overall framework of
consumer decision making;
• explain the various issues in problem-recognition;
• map the process of information search in solving the problem (need) so
recognized;
• distinguish factors and compulsions forcing a choice between or a combination
of internal and external search;
• formulate marketers' response in managing various sources of information used
by the consumers; and
• integrate the two stages of decision-making, viz., problem recognition and
information search.
Structure
12.1 Introduction
12.2 Importance of Problem Recognition
12.3 An Overview of Problem Recognition
12.4 Threshold level in Problem Recognition
12.5 Problem Recognition in the Industrail Buying Process
12.6 Information Search
12.7 Summary
12.8 Key Words
12.9 Self-Assessment Test Questions
12.10 Project Assignments
12.11 Further Readings
"Akai Television in the Mid 1996, decided to offer a trade-in scheme by which all
colour television set owners in India could exchange their set, irrespective of the
brand or,the age of their television set, for Rs. 10, 000/for a remote controlled TV set
or, Rs. 9, 000 for the others, provide they bought any Akai TV set. The offer and the
promotion attracted an unusually large number of customers to visit the AKA1 shops
and avail the facility even though their TV set were working without alright.

What could account for this rush decision of the consumers?”

12.1 INTRODUCTION
You would recall from Block 3 entitled "Understanding Consumers" in the course
MS-6, Marketing for Managers, how consumers move from one stage of decision
making to another in order to complete their decision-making for purchases. These
stages are: Problem Recognition; Information Search; Evaluation of Alternatives;
Purchase Action and finally, Post-purchase Behaviour. These stages are followed
sequentially, i.e. one follows the other in a given order, in most consumption
situations.
No decision-making occurs in isolation as a consumer is influenced by his or her
personality as well as society (Refer to Block 2 and 3 of this course). In this first unit
of this block, we focus on the first two stages of consumer decision-making. 5
The Buying Process
12.2 IMPORTANCE OF PROBLEM RECOGNITION
In several text books on consumer or buyer behaviour, multiple terms have been used
to describe the concept of Problem Recognition. They are Need Recognition, Need
Identification, wants or desires.
Problem Recognition is the very first stage of the long process of consumer decision
making and is important for several reasons. Firstly, it provides an initial clue as to
why a buyer buys what he or she intends to. Secondly, it gives a definite direction to
his or her subsequent purchase behaviour stages like information search and
evaluation of alternatives: Finally, it provides marketers with an immense scope for
using their influence in how the buyers may or may not recognize their needs. Thus a
`virtuous circle' exists between problem recognition by consumers and marketers
stimuli or cues that prompt consumers to react in a desired manner. Figure 12.1
exemplifies this circular relationship.

Activity 1
Recall any purchase that you made recently (tooth brush, a pair of trousers, cigarette,
sport shirt or a soft drink etc.). You now describe as to:
a) When did you first recognize the need of that product? and
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b) When were the marketers’ efforts(stimuli or cues) in the form of advertisements,
sales promotion, product offering or even pricing in order to help you recognize
your need.
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Even there is also a scope for classifying consumers on the basis of their different
problem recognition styles. The first category of consumers are those who presume
that they have a problem when their product fails to perform satisfactorily. For
example, a wrist watch bought by a consumer no longer keeps accurate time. The
second type of customers are those who recognize the need or problem not because
the existing product has failed to perform but because of their desire of possessing
something new. This partly explains why Titan watches found a ready market even
though the HMT wrist watches more or less were quality performance products.

12.3 AN OVERVIEW OF PROBLEM RECOGNITION

Need or problem recognition can be both simple and complex configurations, subject
to associated conditions. Simple problem recognition refers to needs that occur
6 frequently and
can be dealt with almost automatically. For instance, while shopping with your Problem Recognition and
friends in the market, you sighted a soft-drink stall and decided to buy a cold drink. Information Search Behaviour
This could also be to reduce the boredom of waiting out your friends to rejoin at a
place.
Complex problem recognition however, is that state in which a problem recognition
develops slowly but distinctly over a long time. At a certain time, the desired state of
consumer mind is distinctly apart from the actual state. This causes him to recognize
the need. For example, after several years of using a car, the car-owner begins to
consider trading it in for a new one. The reason could be any ranging from mounting
repair bills to the availability of several new models.
Notice the difficulty in the complex problem recognition. In the simple problem
recognition, a consumer will definitely recall exactly the time when and why he felt
the need of the product. In the complex types, however, even a very careful consumer
may fail. Such difference in recalling or failing to recall the needs recognition, is
caused by a varying degree of involvement. The more involved the purchase situation
is, the higher is the likelihood that you would recall exactly what had happened
before you considered the buying of that product and service and vice versa.
Furthermore, many purchases needs are recognized and concluded on the point of
shopping themselves. These purchases are termed impulse purchase. Figure 12.2
explains the process of problem recognition and the factors that contribute to the
process.

It is clear from Figure 12.2 that a problem can be defined as the "perceived gap or
discrepancy between the existing and the desired consumer positions for a given
product and service". The existing consumer position reflects how a consumer feels
presently about his consumption or non-consumption of a given product. The desired
consumer situation refer to his expectations and anticipations from the, consumption
or non-consumption of a given product and service. Most often, the perceived
gap/discrepancy between these two stages fashions the needs of the consumer. Thus,
as consumers grow up physically, financially and psychologically, there will be a
perceived gap between their current and desired situations. A growing child will
desire first a tricycle, then a bicycle and then, perhaps, a moped or motor cycle.
Similarly, a housewife will plan her shopping once she notices a stock-out situation
in her kitchen or in other household supplies.
However, natural factors such as the stock-out or the organic growth or financial-
growth cause the difference between the two sates of mind rather slowly. Hence, on
most occasions, the gaps between the current and desired states of mind are
accelerated or heightened by various marketing stimuli or efforts. These marketing
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efforts influence either the current state of mind or the desired state or both.
The Buying Process Activity 2
Select a product out of the following and explain whether you will influence the
`existing' or `desired' state of mind of consumers. Also explain why?
™ Toothpaste
™ Bicycles
™ Mopeds
™ Saree
™ Television
Answer: I will influence Existing / Desired (chose one) state of mind of
consumers because_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ __ _
_ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _
_ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _
At the current state of mind, marketers may `induce' dissatisfaction in the
consumers for the current stock of products and services. The marketers may
also convince the buyers how obsolete the products have become (Example,
entry of the precisely angled tooth-brushes, iodized salt, pure spices, etc., are
examples of this trend). Mostly, this dissatisfaction is pointed towards
`obsolete' functioning, style and technology. The efforts of markets in respect
of existing or current state of consumption are however, quite limited. They
are somewhat negative in nature too. Hence, most efforts are made by the
marketers to condition the `desired' state of mind of consumers.
The desired consumer position is achieved by advertising newer uses of the current
products, or, by introducing newer features in the products. These marketing stimuli
usually promise a higher level of satisfaction to the consumers. Not only this, the
marketer use stronger appeals and incentives to accentuate the gap between the
existing and desired consumption situations and thus, accelerate problem recognition.
Introduction of 3-door fridge, 40 channel TVs, geared bicycles and consumer
financing or availability of easy credit facility are some of the many tools that have
been used by the marketers in India in the recent time in this direction.
Activity 3
Identify at least two latest brands in washing machines by the multinational
companies now operating in India and compare the marketing messages of these
companies by which they persuade the consumers to buy their brands.
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12.4 THRESHOLD LEVEL IN PROBLEM RECOGNITION

As explained, problem recognition represents the perceived gap between the existing
and desired state of mind of consumers, which is influenced considerably by
marketers' stimuli, However, it should be noted here that every `gap' between these
states of mind for a product or service will not result automatically in its 'need', The
perceived gap must cross a threshold level if a need for the product were to become a
felt need thus ignite the buying process.
The threshold level refers to "the minimum amount of tension, energy or intensity
which is necessary for the feeling to occur".
Thus, marketing efforts are directed not only towards creating a gap between the
current and desired states of mind of consumers but they are also towards increasing
the tension level where need recognition is ensured. Examples of such marketing
efforts include easy repayment or credit facilities for various durable and non-durable
8 products offered by the manufacturers themselves or collaboration with others like a
lease Finance company or a
bank. Many times, marketers increase the tension among consumer just by comparing Problem Recognition and
consumers with whom that have bought their product. The tension increases leading Information Search Behaviour
to need recognition.
Activity 4

a) Did you ever buy a colour television or were involved in the purchase of one? If
yes, recall the 'tension' that you had felt before you recognized the need of the
colour television.
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b) If not, assess how marketers are adding to the tension of not having the latest
model of the colour TV?
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12.5 PROBLEM RECOGNITION IN THE INDUSTRIAL

BUYING PROCESS
The buying process begins when someone in the company recognizes a problem or
need that can be met by acquiring a good or a service.
Problem Recognition can occur as a result of internal and external stimuli. Internally,
the most common events leading to problem recognition are the following:
1. The company decides to develop anew product and needs new equipment and
materials to produce this product.
2. A machine breaks down and requires replacement or parts.
3. Some purchased material turns out to be unsatisfactory and the company searches
for
4. Purchase manager an identifies opportunity to obtain lower prices or better
quality.
5. Simple stockout situations.

12.6 INFORMATION SEARCH

The search for information commences the moment consumers complete recognition
of their need for a product or service. Be it also noted here that this search process is
quite deliberate and long-drawn for most consumer durables and always directed
towards the satisfaction of the needs recognized as explained earlier. Thus, when a
person has -recognized the need of a colour television or refrigerator, his search for
information will be directed towards a colour television or refrigerator. Search
behaviour is always purposive and a deliberate attempt to gain appropriate
knowledge about products, its brands and its important characteristics, and the stores
from where to purchase.

In his search for appropriate knowledge, about the consumer's information search
behaviour the marketer will face the following questions:

™ What are the types of information search and what are their determinants?
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™ What is the appropriate information load that can be handled by consumers?
The Buying Process ™ Which sources of information are used by customers; and

™ How marketers help facilitate the information search?

Figure 12.3 outlines the types of information search in a rational decision-making

process for a high involvement consumer durable.

12.6.1 Types of Information Search

As per the illustration, in order to satisfy the recognized needs, a consumer resorts to
both external and internal search. Internal search for information will be sufficient in
case of loyalty decisions - where the consumer has a strong favourable experience
and brand preferences. It is equally sufficient for impulsive purchases - where such
external stimuli as attractive packaging, unusually low price or vantage display of
products stimulate consumers to recognize the need of the product. The remaining
information search is internal and limited in nature. You may recall the routinised
response behaviour and limited problem solving behaviour covered in MS-6, which
are both characterized by internal search for information. External search, on the
other hand, is a mediated, planned, and rational pursuit of information. In high
involvement purchase decisions, external search is inevitable.
Table 12.1: explains the factors that may determine higher or lower levels of external
information search.

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 Problem Recognition and
Information Search Behaviour

12.6.2 How Much Information Load?

It is the desire of every marketer to provide the `best' amount of information to its
customers for arriving at an optimum decision. This desire has given rise to a
phenomenon called `information overload' in consumer search behaviour. Originally,
raised by Jacob Jacoby and his associates, the concept of information overload
cautions marketers against the popular assumption that: `if some information is good,
then more information must be better.' The marketers are advised, therefore, not to
overload the consumers lest the consumers become confused and make even poorer
decisions than the ones that would have been made without the `extra' information.
Jacoby's studies proved that while consumer do feel more satisfied and less confused,
they actually made poorer purchase decisions with more information. Further,
increasing the load of package-information affects adversely the consumers' ability to
select the best brand.
Activity 5
Review the information provided by the leading manufacturers of 100 cc
motorcycles. Would you call it an information overload? Why? Why not?
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12.6.3 Sources of Information
The area of determining the optimum load of information is relevant to government,
policy makers and consumer activities and organizations too. They need to ensure
that consumers are fully informed; that they have impartial knowledge to make the
best choice. In addition, the consumers need to ensure that they are aware of the cost
of searching for right information and that they have a freedom of trade-offs between
one types of information and their combinations with a focus on the cost-benefit
relationship in search behaviour.
A consumer has access to a variety of sources of information. Some of these sources
are controlled by marketers while others are outside the zone of marketers' control.
Personal friends, independent consumer reports, news articles, shopping columns and
the like represent the latter category of information sources. Further, some of these
sources of, information are face-to-face while others are non-personal in nature. For
instance, word-of-mouth, salesmen message exemplify the face-to-face sources,
while advertisement and publicity represent non-personal information sources. From
the purchase evaluation viewpoint, the most important sources of information are
given in Table 12.2. 11
The Buying Process

Internet has appeared as the latest information source. Most marketers have now
shown interest in putting information about them through this medium either on
request or through having site or a page on the net. The power of this medium is very
exciting.
Advertising is the first major source of information. This has remained so in spite of
the risks of overexposure and cluttering of advertising messages. The receptivity to
advertisement pertaining to desired product category, goes up considerably once the
customer has recognized his need problem for the product/service. Though varying in
importance from case to case, advertising has been reported to have provided 35 to
50% of the information sought by the consumers in different purchase considerations.
In-store material include, display-prices, brochures, danglers, technical report
summaries. The material is useful for both soft-item purchases and the complex ones.
Information on availability of dealers and distribution support and service is given
either exclusively or as a part of advertisement. `Yellow Pages' directory introduced
in this country recently in metropolitan towns may emerge in near future a veritable
source of information in this regard.
Package information is used mainly to inform customers on the product ingredients
and the mode of using it. However, the markets may use packaging colour and design
to convey a favourable brand personality.
Sales personnel have a major role to play as a source of information for consumer
durables like appliances, furniture, electronics and clothing etc., and in almost all
industrial products. Being both expensive and uncertain in its effectiveness, this
source of information is provided with immense care and caution by the marketers.
Finally samples and demonstrations are one of the most effective source of
information to consumers. Besides being custom-built, the product demonstrations
have now been standardized and used on a mass-media like television. Use of
samples provides a risk-free source of information and may create a favourable
impact for marketers.
Activity 6
a) Identify some product that you believe require reasonably intensive prepurchase
search by a consumer. What characteristics do such products have in order to
draw general lessons in this regard?
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b) For each of the products that you listed, identify the perceived risks that a
consumer is likely to experience prior to purchase. Discuss how the marketers of
these products can reduce these perceived risks.
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12.6.4 Marketers' Influence on Information Search Problem Recognition and
Information Search Behaviour
The marketing implications of the search behaviour are broad ranging. For one thing,
it makes marketers aware of how customers search for relevant information and for
another, it helps them facilitate the search process in favour of their marketing
stimuli. Broadly, the marketers influence the search process through the areas of
advertising, product and packaging policies and pricing.
Advertising poses a complex problem to marketers because consumers have a
tendency of selective reception and perception. This adversely affects the marketers
efforts in advertising and forces them to continuously monitor the effectiveness of
advertising. With passage of time, audience-erosion occurs in the receptivity of
advertisements. Further, interpretation of stimuli may convey to consumers a picture
much different than what the markets had intended. `Review' is the key word,
therefore, in this context. Marketers may also vary the contents of products
periodically and its packaging design. It not only averts the potential boredom among
consumers but also conveys an image of moving with time and preference changes
by the marketers. The introduction of words like `new' `improved' `better' or `power
packed' are just the examples of this strategy followed by Indian marketers in recent
times. Changes in packaging design and colour can further stimulate the consumers
search process and push information process through the threshold level of attention.
In pricing, the marketers may convey a desired price quality perception among the
buyers by effectively reviewing pricing permutations and combinations. Consumers
may look at price-tags to acquire information about the quality variations and
perceptions and to determine their own level of confidence in these matters.

12.7 SUMMARY
Problem or need recognition is the first stage of the programmed buying decision
process in most purchase situations. The problem recognition refers to consumer
attention to the gap between the ideal or desired state and existing state of mind.
Buying motives are the chief contributions to this gap and it normally determines the
content and direction of the rest of the decision making process. Search for
information takes place after the recognition of need. The search could be external or
internal or both. Varying from one purchase situation to another, it covers issues like
the nature of information search; the optimum amount of information searched; the
sources used for search and the marketers influence on each of them. Typically, it
refers to a process whereby consumers seek information to learn about the
advantages and disadvantages of various alternatives like product, brands and their
salient attributes for evaluation purpose, in a decision making process.

12.8 KEY WORDS

1. Audience Erosion: A gradual weakening of the impact of advertisement with the
audience.
2. External Search: The act of deliberately collecting and using information for a
given purchase decision.
3. Internal Search: The act of retrieving information from stored memory.
4. Information Overload: The `excess' information that brings no benefits and may
lead to poor decision making.
5. Information Search: The act of acquiring, processing and using relevant
information for a consumption decision.
6. Impulse Purchases: It refers to the unplanned purchases made at the point of
purchase.
7. Involvement: The level of perceived importance and importance evoked by a
stimulus within a given situation.
8. Obsolescence: The perceived or real feeling of outdatedness. 13
The Buying Process 9. Problem Recognition: The realization by the consumer that there -is a difference
between `what is' and `what should be'.
10. Stimuli: The cues or actions that evoke/stimulate a reaction from the receiver.
11. Threshold Level: The lowest level at which an individual can experience a
sensation.

12.9 SELF-ASSESSMENT QUESTIONS

1. How does the problem recognition stage vary between a low involvement and a
high involvement purchase? How can the marketers benefit from these
variations?
2. Why is information search behaviour so important to the marketers? Discuss the
media available to marketers in helping external search.
3. How will an urban consumer dieter from a rural consumer in similar purchase
needs? Is the difference really substantial?
4. How can marketers increase consumers need for socially relevant products like
having regular medical check-ups at health centers or buying highly nutritious
and health-foods in India?

12.10 PROJECT ASSIGNMENTS

1. Go shopping with a friend or your family member or any other relative for any
consumer product. (a) Observe his or her information search behaviour in the
market place without informing in advance. (b) Encourage your companion to
express his thoughts and reactions as you both move along. (c) Supplement your
observation report by asking questions before and/or after the purchase was
concluded. (d) Analyze which marketing stimuli he/she missed and why?
2. Conduct a survey of five dealers of television/refrigerators in your town, and
report on the mistakes that in their view buyers of these products make at the
stage of need recognition. Also explore how these dealers benefit from them.

12.11 FURTHER READINGS

1. Runyon, K.E. & D.E. Steward. (1987): "Consumer Behaviour" 3rd ed., Merill
Publishing Co.
2. Mower, J.C. (1987): "Consumer Behaviour", MacMillan Publishing Co.
3. Kotler, P. (1988): "Marketing Management Planning, Implementation and
Control" (6th ed. Prentice Hall of India).
4. Wilkie, W.L. (1986): "Consumer Behaviour", John Wiley & Sons Inc.
5. Engel, J.E., R.D. Blackwell & P.W. Miniard (1993): "Consumer Behaviour" 5th
ed., The Dryden Press.

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