1. CHAPTER SIXTEEN Alternative Evaluation and Selection McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 2 CHAPTER 16 Figure 16-1

3. 3 CHAPTER 16 How Consumers Make Choices Bounded Rationality: a limited capacity for processing information Affective Choice: choices driven by how they make the user feel Attribute-Based vs. Attitude-Based Choice: Knowledge of specific attributes The use of attitudes, intuitions, and heuristics

4. 4 CHAPTER 16 Consumer Insight 16-1 Do you agree with the four metagoals described above? What others do you think are common? What are the marketing implications of each of the metagoals described above (assume all four are widely used by consumers)?

5. 5 CHAPTER 16 Evaluative Criteria Nature of Evaluative Criteria Tangible Intangible Measurement of Evaluative Criteria Which criteria are used? Brand performance on criteria Relative Importance of Criteria

6. 6 CHAPTER 16 Perceptual Mapping

7. 7 CHAPTER 16 Individual Judgment Accuracy of Individual Judgments: the ability to judge performance of competing brands Use of Surrogate Indicators: an attribute used to stand for or indicate another attribute (e.g.. Price) Influence on Marketing Strategy: Understanding the criteria Recognize the ability of individuals to judge Focus on surrogate indicators

8. 8 CHAPTER 16 Performance on Each Evaluative Criteria

9. 9 CHAPTER 16 Decision Rules Used by Consumers 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-aspectssatisfactory 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.

10. 10 CHAPTER 16 Conjunctive Decision Ad

11. 11 CHAPTER 16 Disjunctive Decision Ad

12. 12 CHAPTER 16 Elimination-by-Aspects Ad

13. 13 CHAPTER 16 Lexicographic Decision Ad

14. 14 CHAPTER 16 Understanding which decision rules are being used…