Decision Making II: Alternative Evaluation and Choice BABIN / HARRIS CB PART 4 CHAPTER 13 Decision Making II: Alternative Evaluation and Choice ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcomes Understand the difference between evaluative criteria and determinant criteria. 2. Comprehend how value affects the evaluation of alternatives. 3. Explain the importance of product categorization in the evaluation of alternatives process. 4. Distinguish between compensatory and noncompensatory rules that guide consumer choice. 13-2 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Decision-Making Model Need recognition Search for information Alternative evaluation Choice Postchoice evaluation LO1 13-3 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Evaluative Criteria The attributes, features, or potential benefits that consumers consider when reviewing possible solutions to a problem. Feature—a performance characteristic of an object. Benefit—a perceived favorable result that is derived from the presence of a particular feature. LO1 13-4 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Determinant Criteria The evaluative criteria that are related to the actual choice that is made. Can depend largely on the situation in which a product is consumed. LO1 13-5 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Value and Alternative Evaluation 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. LO2 13-6 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Rationality Bounded rationality—perfectly rational decisions are not always feasible due to constraints found in information processing. LO2 13-7 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Types of Evaluation Processes Affect-based evaluation—consumers evaluate products based on the overall feeling that is evoked by the alternative. Attribute-based evaluation—alternatives are evaluated across a set of attributes that are considered relevant to the purchase situation. LO2 13-8 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Product Categories Mental representations of stored knowledge about groups of products. Product category levels: Superordinate categories—abstract in nature and represent the highest level of categorization. Subordinate categories—more detailed. LO3 13-9 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Attributes Perceptual attributes—visually apparent and easily recognizable. Search qualities Underlying attributes—not readily apparent and can only be learned through experience. Experience qualities Signal—a characteristic that allows a consumer to diagnose something distinctive about an alternative. LO3 13-10 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Factors Determining Evaluative Criteria Used Situational influences Product knowledge Expert opinions Social influences Online sources Marketing communications LO3 13-11 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Judgment 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 LO3 13-12 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Issues Affecting Consumer Judgments Just noticeable difference Attribute correlation Quality perceptions Brand name associations LO3 13-13 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Conjoint Analysis Marketers use conjoint analysis to understand the attributes that guide preferences. This is accomplished by having consumers compare products across levels of evaluative criteria and the expected utility associated with the alternatives. LO3 13-14 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Choice: Decision Rules 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. LO4 13-15 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Attitude-toward-the-object model (Fishbein model) Compensatory Model Attitude-toward-the-object model (Fishbein model) LO4 13-16 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Noncompensatory Model Conjunctive rule Disjunctive rule Lexicographic rule Elimination-by-aspects rule (EBA) LO4 13-17 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Use of Decision Rules Noncompensatory rules are often used in low-involvement decisions because they help consumers simplify the decision making process. Consumers can combine rules to reach a final decision. Lexicographic rule is most often used because consumers usually already know what features are important to them. Consumers use these rules frequently. The comparisons are made mentally, without the use of a formula. LO4 13-18 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.