Alternative Evaluation and Selection CHAPTER SIXTEEN Alternative Evaluation and Selection

Alternative Evaluation and Selection Process 16-1 Evaluative criteria Importance of criteria Alternatives considered Evaluation of alternatives on each criterion Decision rules applied Alternative selected

Perceptual Mapping of Beer Brand Perceptions 16-2 • Heineken Michelob Corona Coors Rolling Rock Bud Strohs Oly Miller Hamms Schlitz Malt Liquor Pabst Rainier Busch Milwaukee’s Best Generic Beer Schlitz Hamms Light Michelob Light Natural Light Oly Gold Generic Light Bud Light Coors Light High price, high quality, high status Low price, low quality, low status Light taste, less calories, less filling Heavy taste, more calories, more filling

Using Conjoint Analysis to Determine the Importance of Evaluative Criteria 16-3 Design features Design options Processor MMX/233 MMX/300 Integrated Modem Yes No Weight 3.5 lsbs 5.1 lbs Price level $2,000 $2,500 $3,000 These design attributes produce 24 alternative computer design configurations. One design possibility Processor: MMX/300 Modem: No Weight: 5.1 lbs Price level: $2,500

Using Conjoint Analysis to Determine the Importance of Evaluative Criteria 16-3 (II) Consumer preferences 3 2 1 Preference $2,000 $2,500 $3,000 3.5lbs 5.1 lbs No Yes MMX/233 MMX/300 • Price Weight Modem Processor

Using Conjoint Analysis to Determine the Importance of Evaluative Criteria 16-3 (III) Relative importance Evaluative criteria Importance Processor 45% Modem 5 Weight 25 Price level 25 Processor is the most important feature in this example, and MMX/300 is the preferred option. While price and screen size are also important, price becomes a factor between $2,500 and $3,000.

Decision Rules Used by Consumers 16-4 Conjunctive: Select all (or any or first) brands that surpass a minimum level on each relevant evaluative criterion. Disjunctive: Select all (or any or first) brands that surpass a satisfactory level on any relevant evaluative criterion. Elimination- Rank the evaluative criteria in terms of importance and establish by-aspects satisfactory levels for each. Start with the most important attribute and eliminate all brands that do not meet the satisfactory level. Continue through the attributes in order of importance until only one brand is left. Lexicographic: Rank the evaluative criteria in terms of importance. Start with the most important criterion and select the brand that scores highest on that dimension. If two or more brands tie, continue through the attributes in order of importance until one of the remaining brands outperforms the others. Compensatory: Select the brand that provides the highest total score when the performance ratings for all the relevant attributes are added (with or without importance weights) together for each brand.