2007 McGraw-Hill Companies, Inc.

, McGraw-Hill/Irwin

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PART IV: CONSUMER DECISION PROCESS

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CHAPTER

15

INFORMATION

SEARCH

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Consumer Behavior In The News

Broadband Rocks! Marketers love broadband. So do consumers. It provides a richer and more flexible online information experience. Can you predict how fast it will grow in the next five years?

Source: Turbulent New World, Business Week, March 7, 2005, p. 89.

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Consumer Behavior In The News

Broadband Rocks! Can you predict how fast it will grow in the next five years? Roughly 100%! 2005: Households with broadband 42M 2010: Households with broadband 83M

Expect continued growth in online as a source of information!

Source: Turbulent New World, Business Week, March 7, 2005, p. 89.

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Nature of Information Search

Consumers continually recognize problems and opportunities, so internal and external searches for information to solve these problems are ongoing processes.
Internal Search
Search of long-term memory to determine if a satisfactory solution is known.

External Search
If a resolution is not reached through internal search, then the search process is focused on relevant external information.

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Types of Information Sought

Consumer decisions require information about:
Appropriate evaluative criteria The existence of various alternatives Performance of each alternative on each evaluative criterion

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Types of Information Sought

Information Search

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Types of Information Sought

Evaluative Criteria
One potential objective of both internal and external search is the determination of appropriate evaluative criteria. Government agencies and consumer organizations want consumers to use sound evaluative criteria. Marketers wanted consumer to use evaluative criteria that match their brands strengths.

Both marketers and government agencies provide information designed to influence the evaluative criteria used.

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Types of Information Sought

Appropriate Alternatives

The Awareness set is composed of three subcategories of considerable importance to marketers:

1. The evoked set or consideration set contains brands or products one will evaluate. 2. The inept set consists of brands found to be completely unworthy of further consideration. 3. The inert set contains brands for which the consumer is aware of but basically indifferent toward.

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Types of Information Sought

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Types of Information Sought

Awareness Versus Evoked Sets for Various Products

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Types of Information Sought

Alternative Characteristics To choose among the brands in the evoked set, the consumer compares them on the relevant evaluative criteria.

This process requires the consumer to gather information about each brand on each pertinent evaluative criterion.

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Sources of Information
Five primary sources of information available to consumers:
Memory of past searches, personal experiences, and lowinvolvement learning Personal sources, such as friends, family, and others. Independent sources, such as magazines, consumer groups, and government agencies Marketing sources, such as sales personnel, websites, and advertising Experiential sources, such as inspection or product trial

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Sources of Information

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Sources of Information
Information Search on the Internet
Estimated Number of Internet Users by 2007
Central/South America Asia Pacific Western Europe North America 0 100 200 300 400 500 600

Region of the World

Estimated Number of Users

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Sources of Information
Demographics of U.S. Adult Internet Users

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Sources of Information
Top 10 Activities of Adult Internet Users E-Mail Use search engine to find information 91% 84

Search for a map or driving directions

Do an Internet search to answer a specific question Research a product/service before buying it Check the weather Look for informtion on a habbyor interest Get travel information Get news Buy a Product
Number represents percent who have ever engaged in the activity Source: Internet Activities (Washington, DC: Pew Internet & American Life Project, May 18, 2005.

84
80 78 78 77 73 72 67
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Sources of Information
The Nature of Search Using Online Search Engines

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Sources of Information
Information Search on the Internet The Internet influences search. Provides increased speed and efficiency to vast information. More efficient search and better decisions can result. However, information overload can also occur.

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Sources of Information
Information Search on the Internet

There are numerous shopping services on the Internet that can:

search out the lowest prices for specific items search out online retailers of specific merchandise suggest specific brands based on your prior purchases and pre-specified criteria These services use bots or shopping bots, which are software robots that do the shopping/searching for users.
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Sources of Information
Information Search on the Internet
Marketing Strategy and Information Search on the Internet
The online environment is continually evolving.

As the online population increasingly mirrors the general population

segmentation and target marketing are increasingly critical to online success.

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Sources of Information
Information Search on the Internet Three major strategic issues marketers face regarding the Internets role in information search and decision making: 1. How can they drive their information to consumers? 2. How can they drive consumers to their information? 3. How (if at all) can online selling be utilized or integrated with existing channels (Chapter 17)?

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Sources of Information
Driving Information to Consumers Banner ads Permission-based e-mail

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Sources of Information
Driving Consumers to a Firms Information

Offline Media such as print and TV.

Behavioral targeting involves tracking consumer click patterns on a website and using that information to decide on banner ad placement. Search engine optimization (SEO) - techniques to ensure that a company's web pages are accessible to search engines and improving the chances they are found.
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Sources of Information
Driving Consumers to a Firms Information

Website design is also critical. Ongoing and repeat traffic requires relevant and frequently updated content.
Consumers need ongoing incentives to return such as: product-related news features user-related discussion forums

updates on new products

Firms use various incentive techniques to encourage repeat traffic
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Applications in Consumer Behavior

The eBay ad shows how firms use traditional mass media advertising to drive website traffic.

These materials have been reproduced with the permission of eBay Inc. COPYRIGHT EBAY INC. ALL RIGHTS RESERVED.

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Amount of External Information Search

Marketers are particularly interested in external search, as this provides them with direct access to consumers. Most purchases involves limited external search immediately prior to purchase. However, this does not mean a bad judgment on part of consumers since they are balancing the costs and benefits of search.

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Amount of External Information Search

Various measures of external information search:
1. Number of stores visited 2. Number of alternatives considered 3. Number of personal sources used, and 4. Overall or combination measures

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Costs vs. Benefits of External Search

Market Characteristics Product Characteristics Consumer Characteristics Situation Characteristics

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Costs vs. Benefits of External Search

Factor Affecting External Search: Part I
Influencing Factor I. Market characteristics A. Number of alternatives B. Price range C. Store concentration D. Information availability 1. Advertising 2. Point-of-purchase 3. Sales personnel 4. Packaging 5. Experienced consumers 6. Independent sources II. Product characteristics A. Price B. Differentiation C. Positive products Increase in Factor Causes Search to: Increase Increase Increase Increase

Increase Increase Increase

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Costs vs. Benefits of External Search

Factor Affecting External Search: Part II
Influencing Factor
III. Consumer characteristics A. Learning and experience B. Shopping orientation C. Social status D. Age and household life cycle E. Product involvement F. Perceived risk IV. Situation characteristics A. Time availability B. Purchase for self C. Pleasant surroundings D. Social surroundings E. Physical/mental energy

Increase in Factor Causes Search to:

Decrease Mixed Increase Mixed Increase Increase

Increase Decrease Increase Mixed Increase

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Costs vs. Benefits of External Search

Market Characteristics

Market characteristics include the number of alternatives, price range, store distribution, and information availability.
Consumer perceptions of the market characteristics, not the actual characteristics, influence shopping behavior. The greater the number of alternatives available to resolve a problem, the more external search there is likely to be.

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Costs vs. Benefits of External Search

Product Characteristics
Product differentiation is associated with greater external search. And, positive products tend to engender greater search than negative products.

Shopping for a physician can be be unpleasant, and thus, seen as a negative product
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Costs vs. Benefits of External Search

Consumer Characteristics A variety of consumer characteristics affect perceptions of search costs and benefits. Confidence in ones knowledge of existing solutions is an important determinant. However, consumers often do not know what they think they know!

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Costs vs. Benefits of External Search

Consumer Characteristics

There are a variety of types of knowledge where a low level of calibration frequently occurs to the detriment of consumers and firms, including
Memory of Facts
Memory of Events Belief Polarization Belief Validity Personal Forecasts
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Costs vs. Benefits of External Search

Consumer Characteristics
Consumer Perception of Risk associated with unsatisfactory product performance increases information search.
Perceived risk is high for products whose failure to perform as expected would result in a high Social cost Financial cost Time cost Effort cost Physical cost

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Costs vs. Benefits of External Search

Situation Characteristics

Situational variables can have a major impact on search behavior including the following:
Temporal perspective
Task definition Antecedent state

Physical surroundings
Social surroundings

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Marketing Strategies Base on Information Search Patterns

Sound marketing strategies take into account the nature of information search prior to purchase.
Two dimensions of search are particularly appropriate:
1. The type of decision influences the level of search, and

2. The nature of the evoked set influences the direction of the search

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Marketing Strategies Based on Information Search Patterns

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Marketing Strategies Based on Information Search Patterns

Six marketing strategies based on search patterns:
1. Maintenance Strategy 2. Disrupt Strategy

3. Capture Strategy
4. Intercept Strategy

5. Preference Strategy
6. Acceptance Strategy
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Marketing Strategies Based on Information Search Patterns

Maintenance Strategy If the brand is purchased habitually by the target market, the marketers strategy is to maintain that behavior This requires consistent attention to product quality, distribution, and a reinforcement advertising strategy.
Del Monte has large repeat purchaser segments for their canned vegetables which they successfully maintain

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Marketing Strategies Based on Information Search Patterns

Disrupt Strategy If the brand is not part of the evoked set and the target market engages in nominal decision making, the marketers first task is to disrupt the existing decision pattern.

Soy products are a good example of how disrupt strategies have been used to induce trial adoption.

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Marketing Strategies Based on Information Search Patterns

Disrupt Strategy Long-Run Short-Run Attention-attracting advertising aimed specifically at breaking habitual decision making can be successful.

Major brand improvement along with attentionattracting advertising could shift consumer to more extensive decision making.

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Marketing Strategies Based on Information Search Patterns

Disrupt Strategy Tactics include: Free samples, coupons, rebates, and tie-in sales. Striking package designs and point-of-purchase displays. Comparative advertising.

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Marketing Strategies Based on Information Search Patterns

Capture Strategy Limited decision making generally involves a few brands evaluated on only a few criteria. Brand is in evoked set. Search occurs mainly at the point-of-purchase or in readily available media.

Objective is to capture as large a share as practical.

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Marketing Strategies Based on Information Search Patterns

Capture Strategy The marketer will want to supply information, often on price and availability, on their website, in local media through cooperative advertising, and at the point-of-purchase through displays and adequate shelf space.

Implementing a capture strategy also requires emphasis on maintaining consistent product quality and adequate distribution

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Marketing Strategies Based on Information Search Patterns

Intercept Strategy If limited decision making and brand is not part of evoked set, objective will be to intercept the consumer during search.

Emphasis will be on local media, point-of-purchase displays, shelf space, package design, etc.
Coupons can also be effective.

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Marketing Strategies Based on Information Search Patterns

Preference Strategy Extended decision making with the brand in the evoked set requires a preference strategy. A simple capture strategy not likely adequate. Instead, marketer needs to structure information so brand becomes preferred by target market.

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Marketing Strategies Based on Information Search Patterns

Acceptance Strategy

Similar to preference strategy, but complicated by fact that target market is not seeking information about the brand.
Beyond preference strategy, marketer must attract consumer attention or motivate brand learning. Incentives to try product, long-term advertising to enhance low-involvement learning and use of the Internet are useful for gaining acceptance.

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