Evaluating Creteria and Selecting Alternatives (1)

8/19/2019 Evaluating Creteria and Selecting Alternatives (1)

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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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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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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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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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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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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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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 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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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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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


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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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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


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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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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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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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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



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(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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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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WinBook, Dell, IBM, and Toshiba are eliminatedbecause they fail to meet all the minimum standards.

Conjunctive RuleConjunctive Rule

MinimumMinimum

33

44

33

11

22

33

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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


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WinBook, Compaq, and Dell meet minimum for at leastone important criterion and thus are acceptable.

Disjunctive RuleDisjunctive Rule

MinimumMinimum

55

55

--

--

--

55

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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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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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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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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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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


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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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

Evaluating Creteria and Selecting Alternatives (1)

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