Marketing Strategies Based on Information Search Patterns - Faculty ...

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©
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

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.



Consumers continually recognize problems and opportunities,
so internal and external searches for information to solve these
problems are ongoing processes.

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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

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 brand’s strengths.


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

Evaluative Criteria

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Types of Information Sought

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.

The

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

Appropriate Alternatives

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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

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.

Alternative Characteristics

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Sources of Information




Memory
of past searches, personal experiences, and low
-
involvement 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


Five primary sources of information available to consumers:

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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
0
100
200
300
400
500
600
North America
Western Europe
Asia Pacific
Central/South
America
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

91%

Use search engine to find information

84

Search for a map or driving directions

84

Do an Internet search to answer a specific question

80

Research a product/service before buying it

78

Check the weather

78

Look for informtion on a habbyor interest

77

Get travel information

73

Get news

72

Buy a Product

67

Source: Internet Activities (Washington, DC: Pew Internet & American Life Project, May 18, 2005.

Number represents percent who have ever engaged in the activity

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Sources of Information

The Nature of Search Using Online Search Engines

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Sources of Information

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.


Information Search on the Internet

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Sources of Information

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.

Information Search on the Internet

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Sources of Information

Marketing Strategy and Information Search on the Internet

The online environment is continually evolving.

Information Search on the Internet

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

Three major strategic issues marketers face regarding the
Internet’s role in information search and decision making
:



Information Search on the Internet

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




Banner ads


Permission
-
based e
-
mail


Driving Information to Consumers

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Sources of Information

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.

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.

Driving Consumers to a Firm’s Information

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Sources of Information

Consumers need ongoing
incentives to return such as:


product
-
related news features


user
-
related discussion forums


updates on new products

Website design

is also critical. Ongoing and repeat traffic
requires
relevant

and
frequently updated

content.

Driving Consumers to a Firm’s Information

Firms use various incentive
techniques to encourage repeat traffic

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Applications in Consumer Behavior

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

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

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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

Increase in Factor Causes





Search to:


I. Market characteristics



A. Number of alternatives


Increase



B. Price range


Increase



C. Store concentration


Increase



D. Information availability


Increase




1. Advertising




2. Point
-
of
-
purchase




3. Sales personnel




4. Packaging




5. Experienced consumers




6. Independent sources


II. Product characteristics



A.

Price


Increase



B.

Differentiation


Increase



C.

Positive products


Increase

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Costs vs. Benefits of External Search

Factor Affecting External Search: Part II

Influencing Factor

Increase in Factor Causes





Search to:


III. Consumer characteristics



A.

Learning and experience


Decrease



B. Shopping orientation


Mixed



C. Social status


Increase



D. Age and household life cycle


Mixed



E.

Product involvement


Increase



F.

Perceived risk


Increase



IV. Situation characteristics



A.

Time availability


Increase



B.

Purchase for self


Decrease



C.

Pleasant surroundings


Increase



D.

Social surroundings


Mixed



E.

Physical/mental energy


Increase

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Costs vs. Benefits of External Search

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.


Market Characteristics

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Costs vs. Benefits of External Search

Product differentiation is associated with greater external search.

Product Characteristics

Shopping for a physician can be be
unpleasant, and thus, seen as a
negative product

And, positive products tend to
engender greater search than
negative products.

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Costs vs. Benefits of External Search

A variety of consumer characteristics affect perceptions of
search costs and benefits.


Confidence in one’s knowledge of existing solutions is
an important determinant.


However, consumers often do not know what they think
they know!

Consumer Characteristics

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Costs vs. Benefits of External Search

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

Consumer Characteristics

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Costs vs. Benefits of External Search

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


Consumer Characteristics

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Costs vs. Benefits of External Search

Situational variables can have a major impact on search
behavior including the following:



Temporal perspective



Task definition



Antecedent state



Physical surroundings



Social surroundings

Situation Characteristics

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Marketing Strategies Base on
Information Search Patterns






1.
The type of decision influences the level of search,
and

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

Sound marketing strategies take into account the nature of
information search prior to purchase.

Two dimensions of search are particularly appropriate:

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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

If the brand is purchased habitually by the target market,
the marketer’s strategy is to maintain that behavior

This requires consistent attention to product quality,
distribution, and a reinforcement advertising strategy.

Maintenance 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

If the brand is not part of the evoked set and the target
market engages in nominal decision making, the marketer’s
first task is to
disrupt

the existing decision pattern.

Disrupt Strategy

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

Major brand improvement
along with attention
-
attracting advertising
could shift consumer to
more extensive decision
making.

Short
-
Run

Attention
-
attracting
advertising aimed
specifically at breaking
habitual decision making
can be successful.

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Marketing Strategies Based on
Information Search Patterns

Tactics include:


Free samples, coupons, rebates, and tie
-
in sales.


Striking package designs and point
-
of
-
purchase displays.


Comparative advertising.

Disrupt Strategy

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Marketing Strategies Based on
Information Search Patterns

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.


Capture Strategy

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Marketing Strategies Based on
Information Search Patterns

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.

Capture Strategy

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

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.

Intercept Strategy

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Marketing Strategies Based on
Information Search Patterns

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.

Preference Strategy

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Marketing Strategies Based on
Information Search Patterns

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.

Acceptance Strategy