1. Alternative Evaluation and Choice
Chapter 3
Alternative Evaluation and Choice

2. Chapter Spotlights Alternative evaluation
Consumer benefits and evaluative criteria
Consumer decision rules and heuristics
Planned versus unplanned purchasing
Outlet selection
Outlet image
Consumer choice and shopping behavior

3. Consumer Evaluation Sets
Universal set: all product classes and/or all brand alternatives (and outlets) with reasonable marketplace access whether the consumer is aware of them or not
Retrieval set: subset of universal set that consumers can bring up from memory
Consideration set: subset of retrieval set from which the consumer intends to make a selection

4. Evaluative Criteria
Evaluative criteria: the means by which consumers compare product classes, brands, vendors, etc.
Tangible: benefits based on such things as price, color, size, shape, performance
Intangible: benefits based on such things as brand image, ownership feelings

5. Alternative Evaluation
The process through which we compare and contrast different solutions to the same marketplace problem.
It is the third step in the consumer decision-making process:
Problem recognition
Information Search
Alternative evaluation
Choice
Outcomes

6. Evaluative Criteria
Typically, consumers use from four to six criteria.
The more important the purchase and/or the greater experience a consumer has with the product class, the greater the number of criteria used.
Criteria may be used in combination.
The more important the decision, the fewer are the acceptable alternatives.

7. What Is the Relative Importance of Each Criterion?
Importance = salience
Evaluative criteria salience varies by product, situation, and person
Determining relative importance – the “100 points” rule; ask consumers to distribute 100 “importance points” among criteria based on relative importance (see Exhibit 3-1)

8. Country of Origin, Price, and Brand, as Evaluative Criteria
Country of origin is used to signal product quality
Use of price as criterion varies across product categories:
Acceptable price range is determined by past purchases; perception of benefits vs. costs indicates value; and the buying situation.
Brand reputation
Brand may be viewed as an indicator of quality and/or consistency of satisfaction - lessening risk.

9. Consumer Decision Rules
How consumers evaluate and choose products and services in different buying situations.
Rules are used consciously or unconsciously
Three types of rules
Noncompensatory rule: one in which the weaknesses of an alternative are not offset by its strengths (not designed to find “winners”)
Compensatory rule: allowing for trade-offs among strengths and weaknesses (find “winners”)
Decision heuristics: these are rules of thumb or short cuts that allow quick decision-making

10. Noncompensatory Rules
Disjunctive: decide which criteria are determinant (or not) and then establish a minimum score for each one. Meet minimum “in” do not “out”
Conjunctive: consider all criteria as determinant and then establish a minimum acceptable score for each one. Meet all minima “in” otherwise “out”
Lexicographic: rank each of the evaluative criteria in order of importance; compare alternatives on most important with highest score winning; if tie for high score those tied evaluated on second most important criterion, etc., until “winner” is found

11. Compensatory Rules
Simple additive: total scores on all evaluative criteria for each alternative and the highest score wins (assumes all criteria of equal importance)
Weighted additive: assign relative weight to each criterion based on perceived importance and then multiply the score by the relative weight to arrive at a weighted score, sum scores, highest weighted score wins

12. Decision Heuristics
Mental rules of thumb or shortcuts that help consumers reach decisions quickly and efficiently.
Examples:
Price: “the higher the price the better the quality”
Brand reputation: if it’s brand X, it must be good (or bad)
Key product features: if a used car has a clean interior, a buyer may also infer a mechanically sound vehicle.
Market beliefs

13. Choice – Purchase Situations
Four types of purchase situation:
Specifically planned
Generally planned
Substitute
Unplanned

14. Planned Purchasing Behavior
Understanding “buying intention” is key to predicting and potentially influencing planned behavior
Measuring purchasing intention can be done:
Measures of intention may not provide accurate results since situational influences change
The method of questioning may be flawed itself. (A solution: “Yes” or “No” about doing something; then determine probability of doing this)

15. Intervention of Planned Purchases
Intervening variables: changes that may have an impact on the actual purchase behavior
Financial status, employment situation, family or household size, weather, etc.
Deliberation: the longer we put off a purchase the higher the likelihood that either the purchase will not be made or the choice will change.

16. Unplanned Purchasing Behavior
Four types of unplanned purchases
Pure impulse: those that are bought for the sake of novelty
Reminder impulse: are routine purchases, albeit unanticipated.
Suggestion impulse: when a product (not previously seen) stimulates immediate need recognition
Planned impulse: responding to a special incentive to buy an item considered in the past but not selected

17. How do Marketers Encourage Unplanned Purchases?
Point-of-purchase displays
Reduced prices
In-store coupons or specials (Kmart’s Blue Light specials)
Multiple-item discounts
Packaging
In-store demonstrations
Store atmosphere
Salespeople

18. Choice Outlet selection or brand choice, which comes first?
Brand choice first
Brand loyalty
No outlet loyalty or preference
No need for the expertise of salespeople (knowledgeable consumers)
Outlet choice first
High store loyalty or preference
Low brand loyalty
Need for helpful sales staff
Brand and outlet working together
Find the best fit for the consumer’s self image

19. Outlet Image and Choice
Image: the sum total of various functional and psychological outlet attributes
Functional attributes: merchandise, prices, credit policies, store layout, etc.
Psychological attributes: sense of belonging, feeling of warmth or excitement, etc.

20. Outlet Image (continued)
Retailers (stores, catalogs, Web sites, etc.) use attributes that imply certain benefits to attempt to create an image that appeals to their target market(s)
Influences on outlet choice include the level of involvement, perceived risk, advertising, prices, and outlet size.

21. Consumer Choice and Shopping Behavior
Why do people shop?
Personal and social motives
How do people shop?
Shopping orientation: their style or way of shopping
Choice decision during the shopping process:
Which product to buy, how many, which brands to buy, which outlet to use, when to buy, how to pay, and other (should we buy extended warranty)?