16-1 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

16-1© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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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…

And you thought it was all about the styling!And you thought it was all about the styling!

Auto marketers are pushing Auto marketers are pushing extendedextended warranties warranties to better compete for market share.to better compete for market share.

Suzuki is a good example.Suzuki is a good example.

7-year7-year

100,000 miles100,000 miles

Can you name the top three factors (attributes) that Can you name the top three factors (attributes) that convinced consumers to choose Suzuki?convinced consumers to choose Suzuki?

Source: J. Halliday, “Extended warranty heats up auto sales,” Advertising Age, November 1, 2004, p. 12.

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

And you thought it was all about the styling!And you thought it was all about the styling!

Can you name the top three factors (attributes) that Can you name the top three factors (attributes) that convinced consumers to choose Suzuki?convinced consumers to choose Suzuki?

Warranty – 54%Warranty – 54%

Price – 51%Price – 51%

Reliability – 49%Reliability – 49%

And, competitors have followed suite – including And, competitors have followed suite – including GM and Mitsubishi.GM and Mitsubishi.

Source: J. Halliday, “Extended warranty heats up auto sales,” Advertising Age, November 1, 2004, p. 12.

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Alternative Evaluation and SelectionAlternative Evaluation and Selection

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How Consumers Make ChoicesHow Consumers Make Choices

Rational choice theoryRational choice theory assumes the consumer has sufficient skills to calculate which option will maximize his/her value, and will choose on this basis.

The task is to identify or discover the one optimal choice.

The decision maker collects information levels of attributes across alternatives, applies the appropriate choice rule, and the superior option is revealed.

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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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Affective choice most likely under consummatory motives.

Consummatory motivesConsummatory motives underlie behaviors that are intrinsically rewarding to the individual involved.

Instrumental motivesInstrumental motives activate behaviors designed to achieve a second goal.

Affective ChoiceAffective Choice

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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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Motivation, information availability, and situational factors interact to determine which choice process will be used.

Example: the easier it is to access complete attribute-by-brand information, the more likely attribute-based processing will be used.

So, brands with attribute advantages but lacking strong reputations…

Should provide attribute comparisons in an easy-to-process format in their marketing and packaging.

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

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Many decisions, even for important products, appear to be attitude-based.

Thus, marketers often have a dual task:

1. Provide promotions that resonate with consumers making attitude-based choices.

2. Provide performance and supporting information to create preference for consumers making attribute-based choices.

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

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Evaluative CriteriaEvaluative Criteria

Evaluative criteriaEvaluative criteria - various dimensions, features, or benefits sought in response to a specific problem.

Most decisions involve an assessment of one or more evaluative criteria.

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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.

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

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Conjoint analysis is the most popular indirect method.

Conjoint presents consumes with a set of product descriptions which they evaluate.

Statistical analysis is used to derive attribute importance from these overall evaluations.

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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Consumers can have difficulty judging competing brands on complex evaluative criteria such as quality or durability.

Consumers cancan and dodo make such judgments.

But even seemingly simple judgments such as price comparisons can be complex!

The inability of consumers to accurately evaluate many products can result in inappropriate purchases.

This is a major concern of marketing regulators.

Accuracy of Individual JudgmentsAccuracy of Individual Judgments

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A Surrogate indicator Surrogate indicator is an attribute used to stand for or indicate another attribute.

For example, consumers often use the following factors as surrogate indicators of quality (a.k.a. quality signals):

priceprice

advertising intensityadvertising intensity

warrantieswarranties

brandbrand

country of origincountry of origin

Use of Surrogate IndicatorsUse of Surrogate Indicators

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Factors influencing the importance of various criteria:

Usage situation

Competitive context

Advertising effects

The Relative Importance and Influence of Evaluative The Relative Importance and Influence of Evaluative CriteriaCriteria

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Marketers must understand the evaluative criteria consumers use and develop products that excel on these features.

Marketers must understand consumer use of surrogate indicators.

Marketers must understand the factors influencing consumer perceptions of the importance of evaluative criteria.

Evaluative Criteria, Individual Judgments, and Marketing Evaluative Criteria, Individual Judgments, and Marketing StrategyStrategy

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

Choice rules can be characterized as either compensatory and non-compensatory.

A compensatory rule – high level of one attribute can offset a low level of another.

Non-compensatory rules – high level of one attribute cannot offset a low level of another.

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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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Choosing Between Six Notebook ComputersChoosing Between Six Notebook Computers

Final Choice Depends on Decision Rule Being UsedFinal Choice Depends on Decision Rule Being Used

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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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WinBook, Dell, IBM, 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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WinBook, 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 IBM and Toshiba

Step 2: Weight eliminates WinBook

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.

WinBook 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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16-1 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin