Chapter 12 Decision Making II: Alternative Evaluation and Choice

1. Chapter 12Decision Making II: Alternative Evaluation and Choice BABIN / HARRIS © 2009 South-Western, a division of Cengage Learning.

2. Learning Outcomes Understand the difference between evaluative criteria and determinant criteria. Comprehend how value affects the evaluation of alternatives. Explain the importance of product categorization in the evaluation of alternatives process. Distinguish between compensatory and noncompensatory rules that guide consumer choice. LO1 LO2 LO3 LO4 © 2009 South-Western, a division of Cengage Learning.

3. Exhibit 12.1: Consumer Decision Making Process LO1 © 2009 South-Western, a division of Cengage Learning.

4. LO1 Understand the difference between evaluative criteria and determinant criteria. © 2009 South-Western, a division of Cengage Learning.

5. Evaluative Criteria LO1 The attributes, features, or potential benefits that consumers consider when reviewing possible solutions to a problem. © 2009 South-Western, a division of Cengage Learning.

6. Features and Benefits LO1 Feature – snooze button. Benefit – kinder way to wake up. © 2009 South-Western, a division of Cengage Learning.

7. Value Equation LO1 © 2009 South-Western, a division of Cengage Learning.

8. Determinant Criteria LO1 The evaluative criteria that are related to the actual choice that is made. © 2009 South-Western, a division of Cengage Learning.

9. Example of a Determinant Criterion LO1 The ultra-sleek design of the MacBook Air makes thinness a determinant criterion for consumers. © 2009 South-Western, a division of Cengage Learning.

10. LO2 Comprehend how value affects the evaluation of alternatives. © 2009 South-Western, a division of Cengage Learning.

11. Value and Alternative Evaluation LO2 • Hedonic criteria – emotional, symbolic, and subjective attributes or benefits that are associated with an alternative. • Utilitarian criteria – functional or economic aspects associated with an alternative. • Bounded rationality – perfectly rational decisions are not always feasible due to constraints found in information processing. © 2009 South-Western, a division of Cengage Learning.

12. Types of Evaluation Processes LO2 Affect-based evaluation Evaluate products based on the overall feeling that is evoked by the alternative. Attribute-based evaluation Evaluate alternatives across a set of attributes that are considered relevant to the purchase situation. © 2009 South-Western, a division of Cengage Learning.

13. LO3 Explain the importance of product categorization in the evaluation of alternatives process. © 2009 South-Western, a division of Cengage Learning.

14. Product Categories LO3 • Mental representations of stored knowledge about groups of products. • Category levels: • Superordinate • Subordinate © 2009 South-Western, a division of Cengage Learning.

15. Exhibit 12.4: Superordinate and Subordinate Categorization LO3 © 2009 South-Western, a division of Cengage Learning.

16. Factors Determining Evaluative Criteria Used LO3 • Situational influences • Product knowledge • Social influences • Expert opinions • Online sources • Marketing communications © 2009 South-Western, a division of Cengage Learning.

17. Social Influences LO3 Social influences have a substantial effect on consumer decision making. © 2009 South-Western, a division of Cengage Learning.

18. Consumer Judgment LO3 • Mental assessments of the presence of attributes and the benefits associated with those attributes. • Consumers make judgments about: • Presence of features • Feature levels • Benefits associated with features • Value associated with the benefit • How objects differ from each other © 2009 South-Western, a division of Cengage Learning.

19. Just noticeable difference Attribute correlation Quality perceptions Brand name associations Issues Affecting Consumer Judgments LO3 © 2009 South-Western, a division of Cengage Learning.

20. Get Real! LO3 At the heart of the issue with counterfeit products is whether consumers can tell the difference between a fake and the original. The just noticeable difference applies here. © 2009 South-Western, a division of Cengage Learning.

21. Brand Names and Judgment LO3 What can a brand name tell you about a product? © 2009 South-Western, a division of Cengage Learning.

22. LO4 Distinguish between compensatory and noncompensatory rules that guide consumer choice. © 2009 South-Western, a division of Cengage Learning.

23. Consumer Choice: Decision Rules LO4 Compensatory rules Allow consumers to select products that may perform poorly on one attribute by compensating for the poor performance by good performance on another attribute. Noncompensatory rules Strict guidelines are set prior to selection, and any option that does not meet the specifications is eliminated from consideration. © 2009 South-Western, a division of Cengage Learning.

24. Application of a Decision Rule LO4 Example of a noncompensatory model (negative info. leads to the immediate rejection of the brand): Product: snack food Criteria Importance A B C D Taste 1 excexc vg exc Price 2 vg g excfa Nutrition 3 g g p exc Convenience 4 fa g gexc Result: Brand A wins © 2009 South-Western, a division of Cengage Learning.

25. Application of a Decision Rule LO4 Example of a compensatory model (consumers choose the brand with the best positive/neg. feature ratio): Product: snack food Criteria Importance A B C D Taste 1 excexc vg exc Price 2 vg g excfa Nutrition 3 g g p exc Convenience 4 fa g gexc Result: Brand D wins © 2009 South-Western, a division of Cengage Learning.

26. This is a highly involving decision and probably involves both compensatory and noncompensatory rules. Choosing a Car LO4 © 2009 South-Western, a division of Cengage Learning.

27. Retail Outlet Selection LO4 Online retailers have to thoroughly describe the evaluative criteria that consumers may use. © 2009 South-Western, a division of Cengage Learning.