Chapter 5: Evaluating and selecting alternatives
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
2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-1

Evaluating and selecting alternatives
A further step in the consumer decision making process
Copyright
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-2

Chapter 5: Evaluating and selecting alternatives
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The nature of evaluative criteria
Tools for the measurement of 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
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-3

Evaluation of alternatives
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Evaluation criteria
Price
Brand name
Country of origin
Determinants of criteria
Measurement of evaluation criteria
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Identify important criteria
Perception of each product for these
Alternative performance of each product
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-4

Evaluation of alternatives (cont.)
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Determining the alternatives
Evaluating alternatives
Selecting a decision rule
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Non-compensatory
Compensatory
Constructive
Phased
Marketing implications
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-5

Alternative evaluation and selection process
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-6

The measurement of evaluative criteria
• To enable the marketing manager to develop a sound strategy they must determine:
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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
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-7

Determining evaluative criteria to use
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Direct methods
Asking consumers
Focus groups
Observation
Indirect methods
– Projective techniques
– Perceptual mapping
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-8

Perceived performance of six mobile phones in relation to six evaluative criteria
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-9

Importance of evaluative criteria to three buyers
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-10

Perceptual mapping of soap brands
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-11

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:
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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
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-12

Determining consumers’ judgments of brand performance in terms of specific evaluative criteria
• Rank-ordering scales
• Sematic-differential scales
• Likert scales
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-13

Determining the relative importance of evaluative criteria - constant sum method
Evaluative criteria
Price
Size
Warranty
Quality of digital camera
Compatibility with email system
Ease of use
Total
Importance (in points)
20
15
15
5
10
35
100
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-14

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.
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-15

One possible application of conjoint analysis
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-16

Using conjoint analysis to determine the importance of evaluative criteria
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-17

Individual judgment and evaluative criteria
• The accuracy of individual judgments
– Use of a surrogate indicator
– Sensory discrimination
– Just-noticeable difference
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-18

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:
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Predictive value
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Confidence value
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-19

Use of surrogate indicators (cont.)
• Price
– Used to judge the perceived quality of a large rang of goods
• Brand
– Often used as a surrogate indicator of quality
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E.g. jeans
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-20

Use of price to indicate the quality of jewellery
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-21

Evaluative criteria, individual judgments and marketing strategy
• Consumers use surrogate indicators
– Marketers can ensure that their products are superior for these criteria by:
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Making direct reference to them in ads
Using brand names
Using celebrity endorsement
Using country-of-origin
Copyright
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-22

Use of celebrity endorsement
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-23

Use of country of origin
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-24

Decision rules used by consumers
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• Conjunctive
Disjunctive
Elimination-by-aspects
Lexicographic
Compensatory
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-25

Decision rules used by consumers
(cont.)
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-26

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

2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-27

Understanding target buyers’ decision rules to achieve product positioning
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-28

Alternative decision rules and selection of a mobile phone
Decision rule
Conjunctive
Disjunctive
Elimination-by-aspects
Lexicographic
Compensatory
Brand choice
Samsung, Nokia
Motorola, Samsung, Sony
Erickson
Motorola
Sony Erickson
Motorola
Copyright
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2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-29

Summary
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We have discussed:
The nature of evaluative criteria
Tools for the measurement of 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

2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-30

Next Lecture
Chapter 6:
Outlet Selection and Purchase
Copyright

2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins
Slides prepared by Dr Wayne Binney
5-31