1. Consumer Decision Making II
MKT 750
Dr. West

2. Agenda Back to Stages of Decision Making
Evaluation of Alternative, Decision Rules, Choice and Post-purchase Evaluation
A Model of Customer Satisfaction

3. Rational Decision Making:
Choice
Alternative
Evaluation
Search
Need
Recognition
Post-Purchase

4. Evaluating Alternatives
Determine criteria to be used for
evaluation of products
Assess the relative importance of the
each criteria
Evaluate each product based on the
identified criteria

5. Evaluating Alternatives
Criteria for the purchase of a car:
Space
Reliability
Safety
Longevity
Handling
Styling

6. Evaluating Alternatives
Assessing Importance: ei
Space 5
Reliability 4
Safety 4
Longevity 3
Handling 3
Styling 2
* Importance: 5=Most Important, 1=Least Important

7. Evaluating Alternatives
Beliefs Regarding Product Performance:
bi’s
Importance ei
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space 5 4 2
Reliability 3
Safety
Longevity
Handling 1
Styling
Product Evaluation: 4=Excellent, 3=Very Good, 2=Good, 1=Fair

8. Decision Rules
Cutoffs/Thresholds: restriction or requirements for acceptable performance
Signals are product attributes used to infer other product attributes (e.g. high price often infers higher quality)

9. Decision Rules
Compensatory Rule: a perceived weakness of one attribute may be offset or compensated for by the perceived strength of another attribute
Noncompensatory Rule: a product’s weakness on one attribute cannot be offset by strong performance on another attribute

10. Compensatory Decision Rules
Simple additive (Equal Weight): bi
The consumer adds the product evaluations across the set of salient evaluative criteria. The product with the largest score is chosen.
Weighted additive: biei
Judgments of product evaluations are weighted according to importance

11. Simple Additive (Equal Weight)
bi
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space 4 2
Reliability 3
Safety
Longevity
Handling 1
Styling 15 21 20

12. Weighted Additive biei Importance Toyota Sienna Subaru Outback Volvo
Cross Country
Space 5
4 (20)
2 (10)
Reliability 4
3 (12)
4 (16)
Safety
Longevity 3
2 (6)
4 (12)
Handling
1 (3)
2 (6)
Styling 2
2 (4)
4 (8)
3 (6) 57 70 72

13. Noncompensatory Decision Rules:
Lexicographic strategy:
Brands are compared on their most important attribute, and the winner is chosen.
If there is a tie the second most-important is considered, and so on, until a choice is identified

14. Lexicographic Rule Importance Toyota Sienna Subaru Outback Volvo
Cross Country
Space 5 4 2
Reliability 3
Safety
Longevity
Handling 1
Styling

15. Lexicographic Rule Importance Toyota Sienna Subaru Outback Volvo
Cross Country
Space 5 4 2
Reliability 3
Safety
Longevity
Handling 1
Styling

16. Lexicographic Rule Importance Toyota Sienna Subaru Outback Volvo
Cross Country
Space 5 4 2
Reliability 3
Safety
Longevity
Handling 1
Styling

17. Noncompensatory Decision Rules:
Elimination by aspects (EBA):
Brands are compared on an attribute by attribute basis.
Alternatives are eliminated that fall below the consumer imposed cutoffs.
Process continues until a single alternative remains.

18. Elimination by Aspects Rule
Cutoff = 3
Importance
Toyota
Sienna
Subaru
Outback
Volvo
Cross Country
Space 5 4 2
Reliability 3
Safety
Longevity
Handling 1
Styling

19. Noncompensatory Decision Rules:
Conjunctive strategy (Satisficing):
Brand are evaluated, one at a time, against a set of thresholds established for each attribute.
The first brand that meets or exceeds the threshold for each attribute is chosen.

20. Conjunctive Rule Very sensitive to order Cutoff = 2 Toyota Sienna
Subaru
Outback
Volvo
Cross Country
Space 3 2 4
Reliability
Safety
Longevity
Handling 1
Styling
Very sensitive to order

21. Determinants of Satisfaction:
What happens when product performance doesn’t meet expectations?
Assimilation – a reluctance to acknowledge discrepancies via rationalization and attribution
Contrast – the tendency to exaggerate differences, a phenomenon known as reactance

22. Assimilation & Contrast10
Favorable 9
Performance 8 7
6 Expectation
Unfavorable 5
Performance 4 3 2 1
Zone of Tolerance

23. Expectancy Disconfirmation
10 High Expectations
Favorable 9
Performance 8 7 6
Unfavorable 5
Performance 4 3 2 1
Negative Disconfirmation
“Disappointment”
Dissatisfaction Satisfaction
Zone Zone

24. Expectancy Disconfirmation
10 High Expectations
Favorable 9
Performance 8 7 6
Unfavorable 5
Performance 4 3 2 1
Negative Disconfirmation
“Betrayal”
Dissatisfaction Satisfaction
Zone Zone

25. Expectancy Disconfirmation10
Favorable 9
Performance 8 7 6
Unfavorable 5
Performance 4 3 2
1 Low Expectations
Dissatisfaction Satisfaction
Zone Zone
Positive Disconfirmation
“Ambivalence”

26. Expectancy Disconfirmation10
Favorable 9
Performance 8 7 6
Unfavorable 5
Performance 4 3 2
1 Low Expectations
Dissatisfaction Satisfaction
Zone Zone
Positive Disconfirmation
“Elation”

27. Customer Satisfaction
Satisfaction influences repeat buying
Positive post-consumption evaluations
are essential for retaining customers
The likelihood that customers will
remain loyal depends on their level of
satisfaction

28. Customer Satisfaction
It Shapes Word-of-Mouth
Consumers often talk about their
consumption experiences
A firm’s ability to satisfy customers will
affect its success in retaining current
customers as well as recruiting new ones

29. Customer Satisfaction
Implications for Competitive Strategy
Monitor satisfaction levels
Encourage dissatisfied customers to
voice their concerns
Have a recovery system in place to
address customer concerns

30. Influencing Expectations
Advertising claims
Brand names
Packaging
Price

31. Assignment