Ch016 alternative evaluation and selection

PART IV: CONSUMER DECISION PROCESSPART IV: CONSUMER DECISION PROCESS

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CHAPTERCHAPTER 1616

ALTERNATIVE ALTERNATIVE EVALUATION EVALUATION

AND AND SELECTIONSELECTION

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Consumer Behavior In The News…Consumer Behavior In The News…

Amazon is coming up with simpler packaging that Amazon is coming up with simpler packaging that uses less plastic and wire.uses less plastic and wire.

This makes it cheaper for Amazon, better for the This makes it cheaper for Amazon, better for the environment, and easier for consumers to open.environment, and easier for consumers to open.

Which are the features and which are the benefits? Which are the features and which are the benefits?

Features:Features:

Benefits:Benefits:

Which will sell better?Which will sell better?

Source: T. Iezzi, “Amazon One-Ups Santa Claus with Frustration-Free Packaging,” Advertising Age, November 17, 2008, p. 1716-3

Consumer Behavior In The News…Consumer Behavior In The News…

Which are the features and which are the benefits? Which are the features and which are the benefits?

Features:Features: less plastic and wire less plastic and wire

Benefits: Benefits: cheaper, green, easier to opencheaper, green, easier to open

Which will sell better?Which will sell better?

If you said Benefits you are correct!If you said Benefits you are correct!

Direct consumer benefits key…green is indirect Direct consumer benefits key…green is indirect and many don’t care.and many don’t care.

Has been labeled “Frustration-Free Packaging” Has been labeled “Frustration-Free Packaging” to emphasize the direct consumer benefit.to emphasize the direct consumer benefit.

Source: T. Iezzi, “Amazon One-Ups Santa Claus with Frustration-Free Packaging,” Advertising Age, November 17, 2008, p. 1716-4

Alternative Evaluation and SelectionAlternative Evaluation and Selection

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How Consumers Make ChoicesHow Consumers Make Choices

In reality, all consumers have bounded rationality bounded rationality

A limited capacity for processing information.

Consumers also often have goals that are different from, or in addition to, selecting the optimal alternative.

A metagoalmetagoal refers to the general nature of the outcome being sought.

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Metagoals in Decision MakingMetagoals in Decision Making

• Maximize the accuracy of the decisionMaximize the accuracy of the decision

• Minimize the cognitive effort required for the decisionMinimize the cognitive effort required for the decision

• Minimize the experience of negative emotionMinimize the experience of negative emotion

• Maximize the ease of justifying the decisionMaximize the ease of justifying the decision

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1.1. Affective ChoiceAffective Choice

2.2. Attitude-Based ChoiceAttitude-Based Choice

3.3. Attribute-Based ChoiceAttribute-Based Choice

Three types of consumer choice processes:Three types of consumer choice processes:

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Affective choices tend to be more holistic. Brand not decomposed into distinct components for separate evaluation.

Evaluations generally focus on how they will make the user feel as they are used.

Affective ChoiceAffective Choice

Choices are often based primarily on the immediate emotional response to the

product or service.

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Attribute- versus Attitude-Based Choice ProcessesAttribute- versus Attitude-Based Choice Processes

Attribute-Based Choice Attribute-Based Choice

•Requires the knowledge of specific attributes at the time the choice is made, and it involves attribute-by-attribute comparisons across brands.

Attitude-Based Choice Attitude-Based Choice

•Involves the use of general attitudes, summary impressions, intuitions, or heuristics; no attribute-by-attribute comparisons are made at the time of choice.

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The Eton Radio ad provides consumers all the great features of its radio and uses the tag line “Tune in: to independence.”

This is an example of attribute-based decision making.

©2008 Eaton Corporation. All rights reserved.©2008 Eaton Corporation. All rights reserved.

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Evaluative CriteriaEvaluative Criteria

Evaluative criteria are typically product features or attributes associated with either benefits desired by customers or the costs they must incur.

Evaluative criteria can differ in

type number importance

Nature of Evaluative CriteriaNature of Evaluative Criteria

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Measurement of Evaluative CriteriaMeasurement of Evaluative Criteria

Involves a determination of:

The Evaluative Criteria Used

Judgments of Brand Performance on Specific Criteria

The Relative Importance of Evaluative Criteria

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1.1. DirectDirect methods include asking consumers what criteria they use in a particular purchase.

2.2. IndirectIndirect techniques assume consumers will not or cannot state their evaluative criteria.

• Projective techniquesProjective techniques - allow the respondent to indicate the criteria someone else might use.

• Perceptual mappingPerceptual mapping - researcher uses judgment to determine dimensions underlying consumer evaluations of brand similarity.

Determination of Which Evaluative Criteria Are UsedDetermination of Which Evaluative Criteria Are Used

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Evaluative CriteriaEvaluative CriteriaPerceptual Mapping of Beer Brand PerceptionPerceptual Mapping of Beer Brand Perception

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Measuring consumer judgments of brand performance on specific attributes can include:

Rank ordering scales

Semantic Differential Scales

Likert Scales

Determination of Consumers’ Judgments of BrandDetermination of Consumers’ Judgments of Brand Performance on Specific Evaluative CriteriaPerformance on Specific Evaluative Criteria

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The importance assigned to evaluative criteria can be measured either by directdirect or by indirectindirect methods.

The constant sum scale is the most common direct method.

Conjoint Analysis is the most common indirect method.

Determination of the Relative Importance of Determination of the Relative Importance of Evaluative CriteriaEvaluative Criteria

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Individual Judgment and Evaluative Individual Judgment and Evaluative CriteriaCriteria

Accuracy of Individual JudgmentsAccuracy of Individual Judgments

Use of Surrogate IndicatorsUse of Surrogate Indicators

The Relative Importance and Influence of The Relative Importance and Influence of Evaluative CriteriaEvaluative Criteria

Evaluative Criteria, Individual Judgments, and Evaluative Criteria, Individual Judgments, and Marketing StrategyMarketing Strategy

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Decision Rules for Attribute-Based Decision Rules for Attribute-Based ChoicesChoices

Conjunctive RuleConjunctive Rule

Disjunctive RuleDisjunctive Rule

Elimination-by-Aspects RuleElimination-by-Aspects Rule

Lexicographic RuleLexicographic Rule

Compensatory RuleCompensatory Rule

Non-compensatory

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Conjunctive RuleConjunctive Rule:

Establishes minimum required performance for each evaluative criterion.

Selects the first (or all) brand(s) that meet or exceed these minimum standards.

If minimum performance was:

PricePrice 33

WeightWeight 44

ProcessorProcessor 33

Battery lifeBattery life 11

After-sale supportAfter-sale support 22

Display qualityDisplay quality 33

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Lenovo, Acer, Dell, and Toshiba are eliminated because they fail to meet all the minimum standards.

Conjunctive RuleConjunctive Rule

MinimumMinimum334433112233

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Disjunctive RuleDisjunctive Rule:

Establishes a minimum required performance for each important attribute (often a high level).

All brands that meet or exceed the performance level for any key attribute are acceptable.

If minimum performance was:

PricePrice 55

WeightWeight 55

ProcessorProcessor Not criticalNot critical

Battery lifeBattery life Not criticalNot critical

After-sale supportAfter-sale support Not criticalNot critical


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Acer, Compaq, and Dell meet minimum for at least one important criterion and thus are acceptable.

Disjunctive RuleDisjunctive Rule

MinimumMinimum5555------55

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First, evaluative criteria ranked in terms of importance

Second, cutoff point for each criterion is established.

Finally (in order of attribute importance) brands are eliminated if they fail to meet or exceed the cutoff.

If rank and cutoff were:

RankRank CutoffCutoff

PricePrice 11 33

WeightWeight 22 44

Display qualityDisplay quality 33 44

ProcessorProcessor 44 33

After-sale After-sale supportsupport

55 33

Battery lifeBattery life 66 33

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Step 1: Price eliminates Lenovo and Toshiba

Step 2: Weight eliminates Acer

Step 3: Of remaining brands (HP, Compaq, Dell), only Dell meets or exceeds display quality minimum.


MinimumMinimum334433333344

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Consumer ranks the criteria in order of importance.

Then selects brand that performs best on the most important attribute.

If two or more brands tie, they are evaluated on the second most important attribute. This continues through the attributes until one brand outperforms the others.

Acer would be chosen because it performs best on Price, our consumer’s most important attribute.

Lexicographic Decision RuleLexicographic Decision Rule

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The compensatory decision rulecompensatory decision rule states that the brand that rates highest on the sum of the consumer’s judgments of the relevant evaluative criteria will be chosen.

Compensatory Decision RuleCompensatory Decision Rule

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Compensatory Decision RuleCompensatory Decision Rule

Importance ScoreImportance Score

PricePrice 3030

WeightWeight 2525

ProcessorProcessor 1010

Battery lifeBattery life 0505

After-sale supportAfter-sale support 1010


TotalTotal 100100

Assume the following importance weights:

Using this rule, Dell has the highest preference and would be chosen.

The calculation for Dell is:

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Summary of Resulting Choices from Different Summary of Resulting Choices from Different Decision RulesDecision Rules

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Ch016 alternative evaluation and selection

Documents

specific criteria

choices attribute

asking consumers

consumer decision process

attributebased choice16

consumer behavior

decision rules

decision making