evaluating creteria and selecting alternatives (1)
TRANSCRIPT
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Evaluating and selecting alternatives
A further step in the consumer decision makingprocess
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Chapter 5: Evaluating and selectingalternatives
1. The nature of evaluative criteria
2. Tools for the measurement of evaluativecriteria
3. Consumers’ individual judgments are not
necessarily accurate4. Role of surrogate indicators
5. Types of decision rules consumers may
apply6. Implications of evaluative criteria for
marketing strategy
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Evaluation of alternatives• Evaluation criteria
– Price
– Brand name
– Country of origin
• Determinants of criteria
• Measurement of evaluation criteria
– Identify important criteria
– Perception of each product for these
– Alternative performance of each product
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Evaluation of alternatives (cont.)
• Determining the alternatives
• Evaluating alternatives
• Selecting a decision rule
– Non-compensatory
– Compensatory
– Constructive
– Phased
• Marketing implications
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How Consumers Make ChoicesHow Consumers Make Choices
In reality, all consumers have bounded rationalitybounded rationality
A limited capacity for processing information.
Consumers also often have goals that are different from, orin addition to, selecting the optimal alternative.
A metagoalmetagoal refers to the general nature of the
outcome being sought.
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How Consumers Make ChoicesHow Consumers Make Choices
Metagoals in Decision MakingMetagoals in Decision Making
•• Maximize the accuracy of the decision Maximize the accuracy of the decision
••
Minimize the cognitive effort required for the decision Minimize the cognitive effort required for the decision
•• Minimize the experience of negative emotion Minimize the experience of negative emotion
•• Maximize the ease of justifying the decision Maximize the ease of justifying the decision
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How Consumers Make ChoicesHow Consumers Make Choices
1.1. Affective ChoiceAffective Choice
2.2. AttitudeAttitude--Based ChoiceBased Choice
3.3. AttributeAttribute--Based ChoiceBased Choice
Three types of consumer choice processes:Three types of consumer choice processes:
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How Consumers Make ChoicesHow Consumers Make Choices
Affective choices tend to be more holistic. Brand notdecomposed 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 theproduct or service.
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How Consumers Make ChoicesHow Consumers Make Choices
AttributeAttribute-- versus Attitudeversus Attitude--Based Choice ProcessesBased Choice Processes
AttributeAttribute--Based ChoiceBased Choice
•Requires the knowledge ofspecific attributes at the
time the choice is made,and it involves attribute-by-attribute comparisons
across brands.
AttitudeAttitude--Based ChoiceBased Choice
•Involves the use of generalattitudes, summary
impressions, intuitions, orheuristics; no attribute-by-attribute comparisons are
made at the time of choice.
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How Consumers Make ChoicesHow Consumers Make Choices
Motivation, information availability, and situational factorsinteract 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.
AttributeAttribute--Based versus AttitudeBased versus Attitude--Based Choice ProcessesBased Choice Processes
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How Consumers Make ChoicesHow Consumers Make Choices
Many decisions, even for important products, appear to beattitude-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 tocreate preference for consumers making attribute-based choices.
AttributeAttribute--Based versus AttitudeBased versus Attitude--Based Choice ProcessesBased Choice Processes
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Evaluative CriteriaEvaluative Criteria
Evaluative criteriaEvaluative criteria - variousdimensions, features, orbenefits sought in response
to a specific problem.
Most decisions involve anassessment of one or more
evaluative criteria.
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Evaluative CriteriaEvaluative Criteria
Evaluative criteria are typically product features orattributes associated with either benefits desired bycustomers 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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Alternative evaluation andselection process
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Perceived performance of six mobile
phones in relation to six evaluative criteria
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Importance of evaluative criteria to
three buyers
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The measurement of
evaluative criteria
• To enable the marketing manager to develop
a sound strategy they must determine: – Which evaluative criteria are used by
the consumer
– How the consumer perceives alternativeproducts in terms of each criterion
– The relative importance of each
criterion
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Determining evaluative criteria to use
• Direct methods
– Asking consumers – Focus groups
– Observation• Indirect methods
– Projective techniques
– Perceptual mapping
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Evaluative CriteriaEvaluative Criteria
1.1. DirectDirect methods include asking consumers what criteriathey 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 consumerevaluations of brand similarity.
Determination of Which Evaluative Criteria Are UsedDetermination of Which Evaluative Criteria Are Used
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Perceptual mapping of soap brands
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Uses of perceptual mapping• We use this method to help us understand
consumers’ perceptions and the evaluative
criteria they use
• We can use this information to determine:
– How different brands are positioned accordingto evaluative criteria
– How the positions of brands change in
response to marketing efforts – How to position new products using evaluative
criteria
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Determining consumers’ judgments
of brand performance in terms ofspecific evaluative criteria
• Rank-ordering scales
• Semantic-differential scales (seetable on page 130)
• Likert scales
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Evaluative CriteriaEvaluative Criteria
The importance assigned to evaluative criteria can bemeasured either by directdirect or by indirectindirect methods.
The constant sum scale is the most common directmethod.
Determination of the Relative Importance ofDetermination of the Relative Importance of
Evaluative CriteriaEvaluative Criteria
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Determining the relative importance of evaluative
criteria - constant sum method
Evaluative criteria Importance (in points)
Price 20
Size 15
Warranty 15
Quality of digital camera 5
Compatibility with email system 10
Ease of use 35
Total 100
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Determining the relative importance
of evaluative criteria (cont.)
• Indirect methods
– Conjoint analysis: a technique thatprovides data on the structure of
consumers’ preferences for productfeatures and their willingness to trade onefeature for more of another.
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Evaluative CriteriaEvaluative Criteria
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 importancefrom these overall evaluations.
Determination of the Relative Importance ofDetermination of the Relative Importance of
Evaluative CriteriaEvaluative Criteria
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One possible application of conjointanalysis
U i j i t l i t d t i th
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Using conjoint analysis to determine theimportance of evaluative criteria
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Individual Judgment and Evaluative CriteriaIndividual Judgment and Evaluative Criteria
Consumers can have difficulty judging competing brandson complex evaluative criteria such as quality or durability.
Consumers cancan and dodo make such judgments.
But even seemingly simple judgments such as pricecomparisons can be complex!
The inability of consumers to accurately evaluatemany products can result in inappropriate purchases.
This is a major concern of marketing regulators.
AccuracyAccuracy of Individual Judgmentsof Individual Judgments
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Individual Judgment and Evaluative CriteriaIndividual Judgment and Evaluative Criteria
Factors influencing the importance of various criteria:
Usage situation
Competitive context
Advertising effects
The Relative Importance and Influence of EvaluativeThe Relative Importance and Influence of Evaluative
CriteriaCriteria
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Individual judgment and
evaluative criteria
• The accuracy of individual judgments
1. Use of a surrogate indicator
2. Sensory discrimination
3. Just-noticeable difference
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Sensory discrimination and JND
• Read details on pages 133-134
• We will touch on JND in a later lecture onPerception
• Important BB topic
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Use of surrogate indicators
Consumers frequently use an observable
attribute of a product to indicate theperformance of the product on a lessobservable attribute
Reliance depends on:
Predictive value
Confidence value
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Individual Judgment and Evaluative CriteriaIndividual Judgment and Evaluative Criteria
A Surrogate indicatorSurrogate indicator is an attribute used to stand for orindicate 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 ofUse of Surrogate IndicatorsSurrogate Indicators
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Use of surrogate indicators (cont.)
• Price
– Used to judge the perceived quality of a large rangof goods
• Brand – Often used as a surrogate indicator of quality
E.g. jeans
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Use of price to indicate the quality of
jewellery
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Individual Judgment and Evaluative CriteriaIndividual Judgment and Evaluative Criteria
1. Marketers must understand the evaluative criteriaconsumers use and develop products that excel on
these features.
2. Marketers must understand consumer use of surrogate
indicators.
3. Marketers must understand the factors influencingconsumer perceptions of the importance of evaluative
criteria.
Evaluative Criteria, Individual Judgments, andEvaluative Criteria, Individual Judgments, and MarketingMarketing
StrategyStrategy
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Evaluative criteria, individual
judgments and marketing strategy
• Consumers use surrogate indicators
– Marketers can ensure that their productsare superior for these criteria by:
Making direct reference to them in
adsUsing brand names
Using celebrity endorsement
Using country-of-origin
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Use of celebrity endorsement
Use of co ntr of origin
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Use of country of origin
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Decision rules used by consumers
Conjunctive
Disjunctive
Elimination-by-aspects
Lexicographic
Compensatory
Decision rules used by consumers
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Decision rules used by consumers
(cont.)
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
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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Note: here we use the example of choosing between
brands of notebooks.
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
Conjunctive RuleConjunctive Rule:
Establishes minimum requiredperformance for each evaluative
criterion.
Selects the first (or all) brand(s) thatmeet or exceed these minimum
standards.
If minimum performance was:
Price Price 3 3
WeightWeight 4 4
Processor Processor 3 3
Battery life Battery life 11
After After-- sale support sale support 2 2
Display quality Display quality 3 3
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
WinBook, Dell, IBM, and Toshiba are eliminatedbecause they fail to meet all the minimum standards.
Conjunctive RuleConjunctive Rule
MinimumMinimum
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33
11
22
33
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
Disjunctive RuleDisjunctive Rule:
Establishes a minimum requiredperformance for each important
attribute (often a high level).
All brands that meet or exceed theperformance level for any key
attribute are acceptable.
If minimum performance was:
Price Price 5 5
WeightWeight 5 5
Processor Processor Not critical Not critical
Battery life Battery life Not critical Not critical
After After-- sale support sale support Not critical Not critical
Display quality Display quality 5 5
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
WinBook, Compaq, and Dell meet minimum for at leastone important criterion and thus are acceptable.
Disjunctive RuleDisjunctive Rule
MinimumMinimum
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--
--
--
55
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
EliminationElimination--byby--Aspects RuleAspects Rule
First, evaluative criteria ranked in
terms of importance
Second, cutoff point for eachcriterion is established.
Finally (in order of attributeimportance) brands areeliminated if they fail to meet or
exceed the cutoff.
If rank and cutoff were:
Rank Rank Cutoff Cutoff
Price Price 11 3 3
WeightWeight 2 2 4 4
Display quality Display quality 3 3 4 4
Processor Processor 4 4 3 3
After After-- sale sale
support support
5 5 3 3
Battery life Battery life 6 6 3 3
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
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.
EliminationElimination--byby--Aspects RuleAspects Rule
MinimumMinimum33
44
33
33
33
44
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
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 secondmost 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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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
The compensatory decision rulecompensatory decision rule states that the brand thatrates highest on the sum of the consumer’s judgments ofthe relevant evaluative criteria will be chosen.
Compensatory Decision RuleCompensatory Decision Rule
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
Compensatory Decision RuleCompensatory Decision Rule
Importance Score Importance Score
Price Price 30 30
WeightWeight 25 25
Processor Processor 1010
Battery life Battery life 0505
After After-- sale support sale support 1010
Display quality Display quality 20 20
Total Total 100100
Assume the following
importance weights:
Using this rule, Dell has thehighest preference and
would be chosen.
The calculation for Dell is:
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Decision Rules for AttributeDecision Rules for Attribute--Based ChoicesBased Choices
Summary of Resulting Choices from Different DecisionSummary of Resulting Choices from Different Decision
RulesRules
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Note in your text
• They use the example of mobile phones
instead of notebooks• Go through pages 138-141
• Understand the decision rules
• The rankings of the brands (depending on thedecision rule) are as follows:
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Alternative decision rules and
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selection of a mobile phone
Decision rule Brand choice
Conjunctive Samsung, Nokia
Disjunctive Motorola, Samsung, SonyErickson
Elimination-by-aspects Motorola
Lexicographic Sony Erickson
Compensatory Motorola
Summary of the decision rules
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Summary of the decision rules
1. Conjunctive
– Brands that meet a minimum level on each evaluative criterion
2. Disjunctive
– Brands that meet a satisfactory level on any relevant evaluative
criteria
3. Elimination-by-aspects
– Rank brands on evaluative criteria
– Select highest ranking brands until only one is left
4. Lexicographic – Rank brands on evaluative criteria importance
– Select the one that is highest on most important criteria
5. Compensatory
– Select brand that has the highest score over all the relevantevaluative criteria
Understanding target buyers’ decision
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Understanding target buyers decision
rules to achieve product positioning
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Summary of topics in this chapterWe have discussed:
• The nature of evaluative criteria
• Tools for the measurement of evaluativecriteria
• Consumers’ individual judgments are not
necessarily accurate
• Role of surrogate indicators
• Types of decision rules consumers may apply
• Implications of evaluative criteria formarketing strategy