1. TM 5-1 Copyright © 1999 Addison Wesley Longman, Inc. Consumer Choice  The consideration set  Stimulus-based versus memory-based choice  Attitude-based versus attribute-based choice  Choice Heuristics  Determinants of choice strategy

2. TM 5-2 Copyright © 1999 Addison Wesley Longman, Inc. The Consideration Set...Consumers rarely consider more than nine brands before choosing! Brands available in the marketplaceConsideration Set Choice (>20 brands) (7 + 2 brands) (1 brand)

3. TM 5-3 Copyright © 1999 Addison Wesley Longman, Inc.

4. TM 5-4 Copyright © 1999 Addison Wesley Longman, Inc. The Consideration Set  Part-List Cuing  Attraction Effect –Williams-Sonoma Home Bread Bakery $275 Later offered a more expensive model and sales of the original model almost doubled –Cross Pen or $6 - 36% chose the Cross Pen Cross Pen or decoy pen or $6 - 46 % chose the Cross Pen  Tradeoff Contrast Effect –$1,000 PC with 640K or $1,200 PC with 960K (Tradeoff of $200 for an additional 320K)  Compromise Effect

5. TM 5-5 Copyright © 1999 Addison Wesley Longman, Inc. Part-List Cuing.64.59.60.47.56.43 Proportion of Brands Recalled 0 5 15 Females Males 1010

6. TM 5-6 Copyright © 1999 Addison Wesley Longman, Inc. Exp. 1Homogeneous Brands 0 5 15 M.59.47.43 F.64.60.56 Exp. 2Heterogeneous Brands 0 5 15 M.59.47.43 F.64.60.56 Exp. 3Prop. of subjectsProp. of subjects recalling at least 1recalling at least 1 item from nasal item from multisymptom spray categoryformula category no cuemutisymp. cueno cuespray cue 1.00.78.78.33

7. TM 5-7 Copyright © 1999 Addison Wesley Longman, Inc. Part-List Cuing Effect - Why? 1. P(retrieving item i ) = Strength of Assoc. Between i and Category  Strength of Assoc. Between Each Item & Category 2. Sampling with Replacement Sampling an item increases strength of association between that item and the category

8. TM 5-8 Copyright © 1999 Addison Wesley Longman, Inc. How Choices and Comparisons Are Made  Stimulus-Based Choice  Memory-Based Choice  Mixed Choice (Alba et. al. (1993) - Consumers prefer the stimulus brand over a memory brand, even when the memory brand is better. However, memory brand is preferred more over time when positive features are made more memorable by frequency (many positives) or by puffery.)  Attitude-Based vs. Attribute-Based Choice - Accessibility-Diagnosticity Model

9. TM 5-9 Copyright © 1999 Addison Wesley Longman, Inc.

10. TM 5-10 Copyright © 1999 Addison Wesley Longman, Inc. Sanyo attribute recall 4.73 2.08 3.92 4.97 3.57 Group 1: Low Interference plus choice task Group 2: High Interference plus choice task Group 3: Low Interference plus recall attributes Group 4: Low Interference plus recall evaluation Group 5: Low Control Group

11. TM 5-11 Copyright © 1999 Addison Wesley Longman, Inc. Sanyo evaluation recall 1.58 1.19 1.81 1.25 1.11 Group 1: Low Interference plus choice task Group 2: High Interference plus choice task Group 3: Low Interference plus recall attributes Group 4: Low Interference plus recall evaluation Group 5: Low Control Group

12. TM 5-12 Copyright © 1999 Addison Wesley Longman, Inc.

13. TM 5-13 Copyright © 1999 Addison Wesley Longman, Inc.

14. TM 5-14 Copyright © 1999 Addison Wesley Longman, Inc. Evaluation recall 4.03 3.28 4.12 4.12 3.48 3.40 Choice Recall Control ConsistentInconsistent

15. TM 5-15 Copyright © 1999 Addison Wesley Longman, Inc. Choice Heuristics  Attitude-Based Strategies –The Theory of Reasoned Action –Information Integration Theory –Attitude Heuristic –Frequency of Good and Bad Features Heuristic

16. TM 5-16 Copyright © 1999 Addison Wesley Longman, Inc. Frequency of good/bad features is one way to choose...

17. TM 5-17 Copyright © 1999 Addison Wesley Longman, Inc. Choice Heuristics  Attribute-Based Strategies –Between Alternative Processing  Lexicographic Heuristic  Lexicographic Semiorder Heuristic Mr. Coffee Accel PR12A$2790 Mr. Coffee Accel PR16$2585 Mr Coffee BL110$2280  Elimination-By-Aspects Heuristic  Additive-Difference Heuristic  Majority of Confirming Dimensions Heuristic –Within Alternative Processing  Conjunctive Heuristic  Disjunctive Heuristic –Phased Strategies

18. TM 5-18 Copyright © 1999 Addison Wesley Longman, Inc. The lexiographic heuristic involves choosing the best brand on the basis of its most important attribute.

19. TM 5-19 Copyright © 1999 Addison Wesley Longman, Inc. Determinants of Choice Strategy  Processing Goals (Involvement, Accountability, Perceived Risk)  Processing Load - Decision Difficulty (# of brands, # of attributes, time pressure)  Context - Brand-based vs. Attribute-based format - Framing Effect (75% lean/ 25% fat ground beef) - Unwanted Premium Effect (Pillsbury Brownie Cake Mix or Pillsbury Brownie Cake Mix Plus) (Collector’s Plate Offer - reduced price with POF)

20. TM 5-20 Copyright © 1999 Addison Wesley Longman, Inc. Processing goals are influenced by importance of a decision, accountability, and perceived risk...