3. Chapter 5: Evaluating and selecting
alternatives
1. The nature of evaluative criteria
2. Tools for the measurement of evaluative
criteria
3. Consumers’ individual judgments are not
necessarily accurate
4. Role of surrogate indicators
5. Types of decision rules consumers may
apply
6. Implications of evaluative criteria for
marketing strategy
5-3
4. 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
5-4
5. Evaluation of alternatives (cont.)
• Determining the alternatives
• Evaluating alternatives
• Selecting a decision rule
– Non-compensatory
– Compensatory
– Constructive
– Phased
• Marketing implications
5-5
6. How Consumers Make Choices
Rational 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.
5-6
7. How Consumers Make Choices
In reality, all consumers have 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 metagoal refers to the general nature of the
outcome being sought.
5-7
8. How Consumers Make Choices
Metagoals in Decision Making
• Maximize the accuracy of the decision
• Minimize the cognitive effort required for the decision
• Minimize the experience of negative emotion
• Maximize the ease of justifying the decision
5-8
9. How Consumers Make Choices
Three types of consumer choice processes:
1. Affective Choice
2. Attitude-Based Choice
3. Attribute-Based Choice
5-9
10. How Consumers Make Choices
Affective Choice
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.
Choices are often based
primarily on the immediate
emotional response to the
product or service.
5-10
11. How Consumers Make Choices
Affective Choice
Affective choice most likely under consummatory motives.
Consummatory motives underlie behaviors that are
intrinsically rewarding to the individual involved.
Instrumental motives activate behaviors designed to
achieve a second goal.
5-11
12. How Consumers Make Choices
Attribute- versus Attitude-Based Choice Processes
Attribute-Based Choice Attitude-Based Choice
•Requires the knowledge of •Involves the use of general
specific attributes at the attitudes, summary
time the choice is made, impressions, intuitions, or
and it involves attribute-by- heuristics; no attribute-by-
attribute comparisons attribute comparisons are
across brands. made at the time of choice.
5-12
13. How Consumers Make Choices
Attribute-Based versus Attitude-Based Choice Processes
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.
5-13
14. How Consumers Make Choices
Attribute-Based versus Attitude-Based Choice Processes
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.
5-14
15. Evaluative Criteria
Evaluative criteria - various
dimensions, features, or
benefits sought in response
to a specific problem.
Most decisions involve an
assessment of one or more
evaluative criteria.
5-15
16. Evaluative Criteria
Nature of Evaluative 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
5-16
20. 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 alternative
products in terms of each criterion
– The relative importance of each
criterion
5-20
21. Determining evaluative criteria to use
• Direct methods
– Asking consumers
– Focus groups
– Observation
• Indirect methods
– Projective techniques
– Perceptual mapping
5-21
22. Evaluative Criteria
Determination of Which Evaluative Criteria Are Used
1. Direct methods include asking consumers what criteria
they use in a particular purchase.
2. Indirect techniques assume consumers will not or cannot
state their evaluative criteria.
• Projective techniques - allow the respondent to
indicate the criteria someone else might use.
• Perceptual mapping - researcher uses judgment to
determine dimensions underlying consumer
evaluations of brand similarity.
5-22
24. 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 according
to evaluative criteria
– How the positions of brands change in
response to marketing efforts
– How to position new products using evaluative
criteria
5-24
25. Determining consumers’ judgments
of brand performance in terms of
specific evaluative criteria
• Rank-ordering scales
• Semantic-differential scales (see
table on page 130)
• Likert scales
5-25
26. Evaluative Criteria
Determination of the Relative Importance of
Evaluative Criteria
The importance assigned to evaluative criteria can be
measured either by direct or by indirect methods.
The constant sum scale is the most common direct
method.
5-26
27. 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
5-27
28. Determining the relative importance
of evaluative criteria (cont.)
• Indirect methods
– Conjoint analysis: a technique that
provides data on the structure of
consumers’ preferences for product
features and their willingness to trade one
feature for more of another.
5-28
29. Evaluative Criteria
Determination of the Relative Importance of
Evaluative 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 importance
from these overall evaluations.
5-29
32. Individual Judgment and Evaluative Criteria
Accuracy of Individual Judgments
Consumers can have difficulty judging competing brands
on complex evaluative criteria such as quality or durability.
Consumers can and do 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.
5-32
33. Individual Judgment and Evaluative Criteria
The Relative Importance and Influence of Evaluative
Criteria
Factors influencing the importance of various criteria:
Usage situation
Competitive context
Advertising effects
5-33
34. Individual judgment and
evaluative criteria
• The accuracy of individual judgments
1. Use of a surrogate indicator
2. Sensory discrimination
3. Just-noticeable difference
5-34
35. Sensory discrimination and JND
• Read details on pages 133-134
• We will touch on JND in a later lecture on
Perception
• Important BB topic
1-35
36. Use of surrogate indicators
Consumers frequently use an observable
attribute of a product to indicate the
performance of the product on a less
observable attribute
Reliance depends on:
Predictive value
Confidence value
5-36
37. Individual Judgment and Evaluative Criteria
Use of Surrogate Indicators
A 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):
price
advertising intensity
warranties
brand
country of origin
5-37
38. Use of surrogate indicators (cont.)
• Price
– Used to judge the perceived quality of a large rang
of goods
• Brand
– Often used as a surrogate indicator of quality
E.g. jeans
5-38
39. Use of price to indicate the quality of
jewellery
5-39
40. Individual Judgment and Evaluative Criteria
Evaluative Criteria, Individual Judgments, and Marketing
Strategy
1. Marketers must understand the evaluative criteria
consumers use and develop products that excel on
these features.
2. Marketers must understand consumer use of surrogate
indicators.
3. Marketers must understand the factors influencing
consumer perceptions of the importance of evaluative
criteria.
5-40
41. Evaluative criteria, individual
judgments and marketing strategy
• Consumers use surrogate indicators
– Marketers can ensure that their products
are superior for these criteria by:
Making direct reference to them in
ads
Using brand names
Using celebrity endorsement
Using country-of-origin
5-41
44. Decision Rules for Attribute-Based Choices
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.
5-44
45. Decision rules used by consumers
Conjunctive
Disjunctive
Elimination-by-aspects
Lexicographic
Compensatory
5-45
47. Decision Rules for Attribute-Based Choices
Choosing Between Six Notebook Computers
Final Choice Depends on Decision Rule Being Used
Note: here we use the example of choosing between
brands of notebooks.
5-47
48. Decision Rules for Attribute-Based Choices
Conjunctive Rule:
Rule
Price 3
Establishes minimum required
performance for each evaluative Weight 4
criterion. Processor 3
Battery life 1
Selects the first (or all) brand(s) that
meet or exceed these minimum After-sale support 2
standards.
Display quality 3
If minimum performance was:
5-48
49. Decision Rules for Attribute-Based Choices
Conjunctive Rule
WinBook, Dell, IBM, and Toshiba are eliminated
because they fail to meet all the minimum standards.
Minimum
3
4
3
1
2
3
5-49
50. Decision Rules for Attribute-Based Choices
Disjunctive Rule:
Rule
Establishes a minimum required Price 5
performance for each important Weight 5
attribute (often a high level). Processor Not critical
Battery life Not critical
All brands that meet or exceed the
performance level for any key After-sale support Not critical
attribute are acceptable.
Display quality 5
If minimum performance was:
5-50
51. Decision Rules for Attribute-Based Choices
Disjunctive Rule
WinBook, Compaq, and Dell meet minimum for at least
one important criterion and thus are acceptable.
Minimum
5
5
-
-
-
5
5-51
52. Decision Rules for Attribute-Based Choices
Elimination-by-Aspects Rule
First, evaluative criteria ranked in Rank Cutoff
terms of importance Price 1 3
Weight 2 4
Second, cutoff point for each
Display quality 3 4
criterion is established.
Processor 4 3
Finally (in order of attribute After-sale 5 3
support
importance) brands are
eliminated if they fail to meet or Battery life 6 3
exceed the cutoff.
If rank and cutoff were:
5-52
53. Decision Rules for Attribute-Based Choices
Elimination-by-Aspects Rule
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.
Minimum
3
4
3
3
3
4
5-53
54. Decision Rules for Attribute-Based Choices
Lexicographic Decision Rule
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.
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55. Decision Rules for Attribute-Based Choices
Compensatory Decision Rule
The compensatory 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.
5-55
56. Decision Rules for Attribute-Based Choices
Compensatory Decision Rule
Importance Score
Price 30
Assume the following Weight 25
importance weights: Processor 10
Battery life 05
Using this rule, Dell has the After-sale support 10
highest preference and Display quality 20
would be chosen. Total 100
The calculation for Dell is:
5-56
57. Decision Rules for Attribute-Based Choices
Summary of Resulting Choices from Different Decision
Rules
5-57
58. 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 the
decision rule) are as follows:
1-58
59. Alternative decision rules and
selection of a mobile phone
Decision rule Brand choice
Conjunctive Samsung, Nokia
Disjunctive Motorola, Samsung, Sony
Erickson
Elimination-by-aspects Motorola
Lexicographic Sony Erickson
Compensatory Motorola
5-59
60. 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 relevant
evaluative criteria
5-60
62. Summary of topics in this chapter
We have discussed:
• The nature of evaluative criteria
• Tools for the measurement of evaluative
criteria
• Consumers’ individual judgments are not
necessarily accurate
• Role of surrogate indicators
• Types of decision rules consumers may apply
• Implications of evaluative criteria for
marketing strategy
5-62
