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 5-1 Chapter 5: Evaluating and selecting alternatives

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 5-2 Evaluating and selecting alternatives A further step in the consumer decision making process

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 5-3 Chapter 5: Evaluating and selecting alternatives 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 5-4 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  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 Evaluation of alternatives (cont.) Determining the alternatives Evaluating alternatives Selecting a decision rule – Non-compensatory – Compensatory – Constructive – Phased Marketing implications

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 5-6 Alternative evaluation and selection process

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 5-7 The measurement of evaluative criteria To enable the marketing manager to develop a sound strategy they must determine: – 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  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 Determining evaluative criteria to use Direct methods – Asking consumers – Focus groups – Observation Indirect methods – Projective techniques – Perceptual mapping

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 5-9 Perceived performance of six mobile phones in relation to six 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 5-10 Importance of evaluative criteria to three buyers

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 5-11 Perceptual mapping of soap brands

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 5-12 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  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 consumers’ judgments of brand performance in terms of specific evaluative criteria Rank-ordering scales Sematic-differential scales Likert scales

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 5-14 Determining the relative importance of evaluative criteria - constant sum method Evaluative criteriaImportance (in points) Price20 Size15 Warranty15 Quality of digital camera5 Compatibility with system10 Ease of use35 Total100

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 5-15 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  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 One possible application of conjoint analysis

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 5-17 Using conjoint analysis to determine the importance of 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 5-18 Individual judgment and evaluative criteria The accuracy of individual judgments – Use of a surrogate indicator – Sensory discrimination – Just-noticeable difference

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 5-19 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  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 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  E.g. jeans

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 5-21 Use of price to indicate the quality of jewellery

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 5-22 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  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 celebrity endorsement

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 5-24 Use of country of origin

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 5-25 Decision rules used by consumers Conjunctive Disjunctive Elimination-by-aspects Lexicographic Compensatory

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 5-26 Decision rules used by consumers (cont.)

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 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 5-28 Understanding target buyers’ decision rules to achieve product positioning

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 5-29 Alternative decision rules and selection of a mobile phone Decision ruleBrand choice ConjunctiveSamsung, Nokia DisjunctiveMotorola, Samsung, Sony Erickson Elimination-by-aspectsMotorola LexicographicSony Erickson CompensatoryMotorola

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 Summary 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 5-31 Next Lecture Chapter 6: Outlet Selection and Purchase