1. Chapter 5 Evaluating and Selecting Alternatives1
After gathering information, consumers then need to begin the process of making a decision about resolving their problem. We will examine the evaluative criteria used; the measurement aspects of evaluative criteria; note that consumers’ judgments can be inaccurate; and that as judgement is difficult, consumers use surrogate indicators; we’ll study the decision rules that may be used; and finally discuss how to utilise this knowledge to formulate marketing strategy.
Chapter 5 Evaluating and Selecting Alternatives
The nature of evaluative criteria
Tools to measurement 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
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

2. Evaluation of Alternatives2
Evaluative criteria are the various features a consumer looks for in response to a particular problem.
How are the evaluative criteria measured? Must determine the most important criteria, assess the products based on how the consumer sees each product based on these criteria, and measure the relative importance of each criterion.
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
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

3. Evaluation of Alternatives (cont.)3
The consumer determines the alternatives, e.g. brands of car with a six-cylinder engine, then evaluates the alternatives based on criteria perceived to be important.
The actual decision process can involve choosing a particular decision rule, whereby the alternatives are examined before a choice is made.
We then discuss how this information can be used in marketing.
Evaluation of Alternatives (cont.)
Determining the alternatives
Evaluating alternatives
Selecting a decision rule
non-compensatory
compensatory
constructive
phased
Marketing implications
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

4. Consumer Decision Process
Just to recap, consumers recognise that they need to acquire a product and gather information to enable an informed purchase. Consumers gather information about various alternative solutions to a recognised problem, and after they have done so, they evaluate the alternatives and select the course of action that seems most likely to solve the problem 4
Consumer Decision Process

5. Alternative Evaluation and Selection Process
Evaluative criteria are the various features a consumer looks for in response to a particular problem. Price, brand name and country of origin are some of the main criteria that can be used, although this is dependent on the product category. A consumer may choose a particular brand and then compare stores on the price for that product.
Before a marketing manager can develop a sound strategy for affecting consumer decisions, they must determine how the evaluative criteria are measured. This involves determining the most important criteria, assessing the products based on how the consumer sees each product based on these criteria, and measuring the relative importance of each criterion. (See page 123.) 5
Alternative Evaluation and Selection Process

6. The Measurement of Evaluative Criteria
See page 124.
The Measurement of Evaluative Criteria
Before a strategy is developed, the marketing manager must know:
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
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

7. Determining which Evaluative Criteria are Used
It is important to know, when using direct methods, whether the consumers actually know why they have a preference for the various products/brands. They may not have thought about the criteria; however, this may be a very important research finding in itself.
(See page 125 for descriptions of these methods.)
Determining which Evaluative Criteria are Used
Direct methods
Asking consumers
Focus groups
Observation
Indirect methods
Projective techniques
Perceptual mapping
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

8. Perceived Performance of Six Television Sets
This hypothetical information will allow us to learn about the various decision rules that consumers can apply to a given buying situation.
The table indicates that some brands are rated as ‘very good’, e.g. Sony for price, or ‘very poor’, e.g. Sharp for price. Other attributes are rated in a similar manner. (See page 125.)
Perceived Performance of Six Television Sets

9. Importance of Evaluative Criteria to Buyers
Assume that three individual buyers have different requirements and that we rank their choice to indicate the attributes that are very important to each of them, e.g. price and memory are very important for Buyer A.
If we assume that these 3 buyers represent groups of buyers, then this would represent the market segmentation for this product. (See page 125.)
Importance of Evaluative Criteria to Buyers

10. Perceptual Mapping of Soap Brands
Another method of evaluating the requirements of buyer groups is to prepare a perceptual map of the segments. With this information, marketers can evaluate how different brands are positioned according to evaluative criteria. (See pages 125–126.) 8
Perceptual Mapping of Soap Brands

11. Uses of Perceptual Mapping
See page 126.
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
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

12. See page 126 for definitions and descriptions.
Determining Consumers’ Judgments of Brand Performance in Terms of Specific Evaluative Criteria
Rank-ordering scales
Sematic-differential scales
Likert scales
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

13. Determining the Relative Importance of Evaluative Criteria
See page 127 for a description of the constant sum method.
Determining the Relative Importance of Evaluative Criteria
Direct methods
Constant sum

14. Determining the Relative Importance of Evaluative Criteria (cont.)
See page 127 for a description.
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.
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

15. Application of Conjoint Analysis
See page 127 for discussion.
Application of Conjoint Analysis

16. The technique of conjoint analysis can be used to determine the ‘ideal’ product for a particular market segment. Consumers are required to ‘trade-off’ the attributes against each other, for example a decision to purchase a computer requires trading off various attributes such as price, screen size, etc. against each other. Thus through research it is possible to measure consumers’ perception of the ‘ideal’ computer.
A retailer and/or manufacturer can use this information and may decide to supply this product to the market segment.
Using Conjoint Analysis to Determine the Importance of Evaluative Criteria

17. Individual Judgment and Evaluative Criteria
See page 129 for descriptions of these.
(An example could be demonstrated in class to show this, e.g. Cola taste test.)
Individual Judgment and Evaluative Criteria
The accuracy of individual judgments
Use of a surrogate indicator
Sensory discrimination
Just-noticeable difference
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

18. Use of Surrogate Indicators
See page 130 for detailed discussion of surrogate indicators.
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
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

19. Use of Surrogate Indicators (cont.)
See pages 130–132 for detailed discussion of price and brand as indicators.
Use of Surrogate Indicators (cont.)
Price
Brand
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

20. Use of Price to Indicate the Quality of Jewellery
See page 131 for discussion.
Use of Price to Indicate the Quality of Jewellery

21. Evaluative Criteria, Individual Judgments and Marketing Strategy
See page 133 for discussion.
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
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

22. Use of Celebrity Endorsement
See page 133 for discussion.
Use of Celebrity Endorsement

23. Use of Country of Origin
See pages 133–134 for discussion.
Use of Country of Origin

24. Decision Rules Used by Consumers10
When consumers judge alternative brands on several evaluative criteria, they must have some method for selecting one brand from the various choices. Decision rules serve this function.
A decision rule specifies how a consumer compares two or more brands. Five commonly used decision rules are the disjunctive, conjunctive, lexicographic, elimination-by-aspects, and compensatory rules. Marketing managers must be aware of the decision rule(s) used by the target market, since different decision rules require different marketing strategies. (See pages 134–135.)
Decision Rules Used by Consumers
Conjunctive
Disjunctive
Elimination-by-aspects
Lexicographic
Compensatory
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

25. Decision Rules Used by Consumers (cont.)
See page 134ff for discussion.
Decision Rules Used by Consumers (cont.)

26. Summary of the Decision Rules
Conjunctive: Buyers select all brands (or the first brand) that surpass(es) a minimum level on each relevant evaluative criterion.
Disjunctive: A buyer would select all brands (or the first brand) that surpass(es) a satisfactory level on any relevant evaluative criterion. So you may choose the TV that is the cheapest with a large screen.
Elimination-by-aspects: To choose a TV using this rule, a consumer would 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.
Lexicographic: rank the brands and choose the brand that is the highest on the most important attribute. For example, this may be price, therefore a consumer may choose the cheapest TV set.
Compensatory: After ranking the products and rating the importance of each attribute, an overall score is calculated—the TV with the highest score is chosen.
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
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins

27. See page 139.
Understanding Target Buyers’ Decision Rules to Achieve Product Positioning

28. Alternative Decision Rules and Selection of a Television Set
For interest, we note that different brands of TV set would be chosen depending on the particular decision rule that is being used by the consumer segments. (See page 138.)
Alternative Decision Rules and Selection of a Television Set

29. Next Lecture… Chapter 6: Outlet Selection and Purchase
Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins