Consumer Psychology and
Behavior - MKTG1421
Topic 3: Problem recognition
Learning objectives
1. Problem recognition
2. Habitual, limited and extended decisions
3. Factors that affect problem recognition
4. Types of consumer problems
5. Marketing strategy and implications
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Consumer decision making process
If consumers do not recognise
a problem to be solved, there is
no consumer decision process.
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Step 1: Problem or need recognition
1. Here the consumer is in equilibrium .
Actual Ideal
Does not recognise a problem.
2. Problem recognition occurs when
consumers perceive a gap between their
actual state or desired ideal state.
Actual Ideal 3. Cause may be actual state declining, or
the ideal state moving upward.
4. The magnitude of the gap must be
enough to motivate the consumer to
Actual Ideal proceed to Stage 2
What causes problem or need recognition?
Actual State: Where We Ideal State: Where We
Are Now Want To Be
Often determined by Based on our
simple physical expectations, future
factors goals or aspirations
External stimuli can
change how we Changes in our life
perceive our actual situations
state
Factors influencing the actual state
1. Past decisions
2. Normal depletion
3. Individual development
4. Emotions
5. The efforts of consumer groups or government (green
products)
6. The availability of products
7. The situation
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8. Product/brand performance
Factors influencing the desired state
• Culture/social class, e.g. importance of cleanliness
• Reference groups e.g. a change after graduation
• Family/household e.g. family brands
• Increase or decrease in financial status
• Previous purchase decisions
• Individual development (change in tastes)
• Motives: refer to Maslow’s needs
• Emotions: seek positive experiences?
• The situation
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Does the consumer perceive a difference between
their actual or ideal state ?
No Yes
Terminate the Is the discrepancy strong enough to
decision process motivate the consumer ?
No. Terminate the Yes. Proceed
decision process. to Stage 2
Process of problem recognition
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Desire to resolve recognised problems
Depends on two factors:
1. The magnitude of the discrepancy between the
desired and actual states
2. The relative importance of the problem
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Products are positioned as providing a potential
solution
Damaged
Shine
Stronger
Vibrant
Straight
Hydrated
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Types of consumer decisions
Level of involvement impacts
What is purchase involvement ? type of decision making
1. Consumer’s level of concern,
interest and effort in the Habitual decision making or
decision making process
2. Influenced by the interaction of
Limited decision making or
individual, product and
situational characteristics
Extended decision making
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Purchase involvement and types of decisions
Low purchase High purchase
involvement involvement
Habitual Limited Extended
decision decision decision
making making making
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Example: Habitual Decision Making
Routine Decision
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Example: Limited Decision Making
$7.55 $10.99 $6.85
Price as an evaluative criterion
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Example: Extended Decision Making
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Purchase involvement and types of decision
making
Difference between generic and selective
problem recognition
Generic Problem Selective Problem
Recognition Recognition
Need recognition occurs Need recognition occurs at
at product category level brand level as brands are
as all brands are similar differentiated.
The solution is the The solution is the brand
product category that is perceived as best
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Non-marketing factors affecting problem
recognition
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Types of consumer problems
1. Routine problems
• Expected, require immediate solution
2. Emergency problems
• Not expected, require immediate solution
3. Planning problems
• Expected, don’t require immediate solution
4. Evolving problems
• Not expected, don’t require immediate solution
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Marketing strategy and problem recognition
1. Measuring problem recognition
2. Responding to consumer problems
3. Activating problem recognition
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Activating problem recognition
• Generic problem recognition (product category), e.g.
dairy foods
• Selective problem recognition (a brand) e.g. Colgate
Vitamin C for good breath, Vinamilk for strong bones
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Example - Generic problem recognition
• Selling the product
category to increase
demand for the
category
• Sometimes the leading
brand will do this
• All brands will benefit
• The lead brands will
benefit most due to
high market share
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Example – Selective problem recognition
This ad attempts to
activate selective
problem recognition
by hoping to increase
demand for the brand
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Activating problem recognition
1. Disrupt perceptions of the
Actual Ideal
existing state
2. Influence the desired state
3. Timing problem recognition
Actual Ideal
4. Suppressing problem
recognition
Actual Ideal
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Influencing the desired state: Persuade
consumers that the product is the best offered
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TVC Influencing perceptions of the existing state
• Anlene TVC
[Link]
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Timing problem recognition
• [Link]
Sofitel Official TVC
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Ads suppressing problem recognition
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Summary
1. What is the nature of problem recognition?
2. How does purchase involvement impact consumer
decision making
3. What is the difference between habitual, limited and
extended decision making?
4. What factors affect problem recognition?
5. What are the types of consumer problem?
6. What marketing strategies can be used to activate
problem recognition?
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Step 1: Problem recognition in the consumer
decision making process
✓ Changes in actual
1st step
or desired state
✓ Creates a felt
discrepancy
✓ Consumer may be
motivated to
proceed to step two
✓ information search
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