Marketing Chapter 13 Decision Making Alternative Evaluation And Choice Learning Objectives After Studying This

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Chapter 13

Decision Making II: Alternative Evaluation and

Choice

Learning Objectives

After studying this chapter, students should be able to accomplish the following objectives.

13-1 Understand the difference between evaluative criteria and determinant criteria.

13-3 Explain the importance of product categorization in the evaluation of alternatives process.

13-4 Distinguish between compensatory and noncompensatory rules that guide consumer

choice.

Lecture Example

Ethical and green consumerism may be increasingly shaping consumer behavior and marketing

practices, but when it comes to actual purchases, a key focus on environment sustainability may

be overshadowed by the consumer’s evaluation of a product’s perceptual attributes. Most

participants in a survey by the Carbon Trust in London said they would buy products labeled

with carbon footprints only if they cost the same as conventional products. In 2009, William

Young and his colleagues at the University of Leeds found that 30% of people in the United

Lecture Outline with PowerPoint® Slides

LO: 13-1. Understand the difference between evaluative criteria and determinant criteria.

I. Evaluation of Alternatives: Criteria

An important part of decision making is evaluating alternative solutions to problems. Consumers

are bombarded daily by a dizzying array of product varieties, brands, and experiences from

which to choose. Marketers sometimes refer to this situation as “hyperchoice” because so many

alternatives are available. Fortunately, consumer researchers have learned much about how

consumers evaluate alternatives. In some situations, consumers simply look for one or two

attributes to consider.

A. Evaluative Criteria [Instructor PPT Slide 3]

After a need is recognized and a search process has taken place, consumers begin to examine

the criteria that will be used for making a choice. Evaluative criteria are the attributes,

features, or potential benefits that consumers consider when reviewing possible solutions to a

Q: Ask students to provide the features and benefits of an iPad.

B. Determinant Criteria [Instructor PPT Slide 4]

Determinant criteria (sometimes called determinant attributes) are the evaluative criteria that

are related to the actual choice that is made. Consumers don’t always reveal, or may not even

LO: 13-2. Comprehend how value affects the evaluation of alternatives.

II. Value and Alternative Evaluation [Instructor PPT Slide 6]

The value that consumers believe they will receive from a product has a direct impact on their

evaluation of that product. In fact, the word evaluate literally means to set a value or worth to an

object. Benefits are at the heart of the value equation, and value is a function of both benefits and

costs.

A. Hedonic and Utilitarian Value [Instructor PPT Slides 6 and 7]

The criteria that consumers use when evaluating a product can also often be classified as

either hedonic or utilitarian. Hedonic criteria include emotional, symbolic, and subjective

attributes or benefits that are associated with an alternative. Utilitarian criteria pertain to

Rationality, Effort, and Variety [Instructor PPT Slide 8

Consumers are not always rational when they are evaluating and choosing from possible

solutions to a problem. Consumers often have limited ability to process all the information

that’s available in the environment. The term bounded rationality describes the idea that

perfectly rational decisions are not always feasible due to constraints found in information

processing. Even when consumers have the ability to consider all possible solutions to a

problem, they do not always do so.

Q: Discuss examples of products that have hedonic or utilitarian value.

B. Affect-Based and Attribute-Based Evaluations [Instructor PPT Slides 9 and 10]

One can distinguish between two major types of evaluation processes: affect-based and

attribute-based. With affect-based evaluation, consumers evaluate products based on the

overall feeling that is evoked by the alternative. Emotions play a big role in affect-based

evaluation, as do mood states.

LO: 13-3. Explain the importance of product categorization in the evaluation of

alternatives process.

III. Product Categorization and Criteria Selection [Instructor PPT Slide 11]

One of the first things that a consumer does when she receives information from the environment

is attempt to make sense of the information by placing it in the context of a familiar category.

Within these schemata, both product categories and brand categories are found.

A. Category Levels

Consumers possess different levels of product categories. The number of levels and details

within each level is influenced by familiarity and expertise with products. Distinctions can be

made within any of these categories. Distinctions at subsequent levels increase in specificity,

ultimately to the brand and attribute level. Expertise and familiarity play important roles in

this process.

Superordinate and Subordinate Categories [Instructor PPT Slide 12]

Perceptual and Underlying Attributes [Instructor PPT Slides 13 and 14]

When evaluating products, consumers also distinguish between perceptual and underlying

attributes. Perceptual attributes are visually apparent and easily recognizable. These

attributes are sometimes referred to as search qualities, because they can easily be

evaluated prior to actual purchase.

Consumers use information about color, feel, brand name, price, and retailer reputation as

signals about quality in the following situations:

B. Criteria Selection

There are a number of issues that relate to the selection of criteria that consumers use when

evaluating products.

What Determines the Type of Evaluative Criteria that Consumers Use? [Instructor

PPT Slide 15]

A number of factors influence the type of criteria that consumers use when evaluating

alternatives.

• Situational influences—the type of criteria that are considered depends heavily on

situational influences.

• Product knowledge—as a consumer’s level of knowledge increases, he is able to

focus on criteria that are most important in making a selection and to discount

irrelevant information.

Q: Ask students to share a shopping experience. Which of the factors mentioned above

influenced the criteria that they used to evaluate the product or service?

Are Consumers Accurate in their Assessment of Evaluative Criteria? [Instructor PPT

Slide 16]

The accuracy of a consumer’s evaluation depends heavily on the quality of judgments that

they make. Judgments are mental assessments of the presence of attributes and the

benefits associated with those attributes. Consumer judgments are affected by the amount

of knowledge or experience a consumer has with a particular object. During the evaluation

process, consumers make judgments about the following:

Q: What judgments would you make before purchasing an iPad?

There are several issues that affect consumer judgments. A few of these issues are

mentioned below. [Instructor PPT Slide 17]

• Just noticeable difference—the ability of a consumer to make accurate judgments

when evaluating alternatives is influenced by their ability to perceive differences in

levels of stimuli between two options.

• Attribute correlation—consumers often make judgments about features based on

their perceived relationship with others. Here, consumers rely on attribute

correlation to describe the perceived relationship between attributes of products.

How Many Criteria are Necessary to Evaluate Alternatives Effectively?

Too many alternatives can be draining for consumers. However, research suggests that

consumers can handle a surprisingly high number of comparisons before overload sets in.

Q: Which of the criteria given above would affect you when you are buying a pair of

shoes?

What if Information Is Missing?

Consumers may have a good understanding of the types of attributes that they would like

to use for alternative evaluation, but sometimes attribute information is not available. To

help solve this dilemma, consumers tend to weigh the criteria that are common to both

alternatives quite heavily in the evaluation. They also tend to discount information that is

missing for the option that performs better on the common criteria.

How Do Marketers Determine Which Criteria Consumers Use? [Instructor PPT

Slide 18]

Marketers can use several techniques to determine the criteria that consumers use when

judging products. They can directly ask consumers through surveys. They can also gather

information from warranty registrations that ask consumers to indicate the specific criteria

that were used in arriving at a purchase decision.

LO: 13-4. Distinguish between compensatory and noncompensatory rules that guide

consumer choice.

IV. Consumer Choice: Decision Rules

Once consumers have evaluated alternative solutions to a problem, they begin to make a choice.

Choice does not mean that a particular alternative will be chosen, as consumers may simply

choose to delay a choice until a future date or to forgo a selection indefinitely. There are two

major types of rules that consumers use when selecting products: compensatory rules and

noncompensatory rules. [Instructor PPT Slide 19]

• 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 models do not allow for this process to take place. Rather, when

noncompensatory rules are used, strict guidelines are set prior to selection, and any

option that does not meet the specifications is eliminated from consideration.

A. Compensatory Models

The attitude-toward-the-object model (Fishbein model) represents a compensatory

approach. The formula Ao = ∑(bi)(ei) allows for poor scores on one attribute to be

compensated for by good scores on another. The example is shown in Exhibit 13.6.

B. Noncompensatory Models [Instructor PPT Slides 20 and 21]

Consumer researchers have identified four major categories of noncompensatory decision

rules. They include the conjunctive rule, the disjunctive rule, the lexicographic rule, and the

elimination-by-aspects (EBA) rule.

• Following the conjunctive rule, the consumer sets a minimum mental cutoff point for

various features and rejects any product that fails to meet or exceed this cutoff point

across all features.

C. Use of Decision Rules [Instructor PPT Slide 22]

Noncompensatory rules are often used in low-involvement situations, because these rules

allow consumers to simplify their thought processes. However, these rules are also used in

D. Retail Outlet Selection [Instructor PPT Slide 23]

Consumers must also choose where they will buy the product. Sometimes, consumers will

decide where they will buy before they determine what they will buy. Several factors

influence the choice of retail outlet, including objective and subjective criteria such as product

variety, store image, location, service, and product quality.

Online Retail Selection

The Internet has also become the channel of choice for many consumers. Convenience

plays a big role in online retail selection, but other factors such as the availability of variety

and product information, customer service, security, and navigational ease also play

important roles.

Q: Which products that you would buy would demand the application of the non-

compensatory rules of selection?

Video material for this chapter is starting on page 16 of the IM.

End of Chapter Material

Review Questions

(*) indicates material on prep cards.

1. Describe evaluative and determinant criteria. What is the difference between them? What

attributes do you consider to be evaluative and determinant criteria in the selection of a

new apartment?

2. What roles do features and benefits play in the evaluation of alternatives? Do consumers

pay more attention to features or benefits? How can benefits be utilitarian or hedonic?

3. *What is the relationship between utilitarian and hedonic value and the evaluation of

alternatives?

7. *At what level do product comparisons across features or attributes take place according to

the product categorization approach? What examples can you think of for product

comparisons at this level?

8. Discuss the major types of noncompensatory decision-making rules. How are they

different from compensatory rules?

9. *In what ways does the conjunctive rule differ from the elimination-by-aspects rule?

10. Which noncompensatory rule is most common?

Group Activity

Form groups of size five to six (depending on class size), and assign each group a specific

product category. The assignment will be to visit a local retailer and evaluate three different

options of the category using the four noncompensatory rules and the ATO approach that was

discussed in Chapter 7. The following list of products provides examples: TVs, car stereos,

washing machines, laptops, refrigerators, automobiles, motorcycles, cell phones, video game

consoles, watches, and apartment complexes. Ask students how realistic the various

noncompensatory approaches were in their opinion. Also, ask them to compare the

noncompensatory approaches with the ATO approach. Which did they think was the most

appropriate? Have them report their findings to class.

Assignment

1. Compare websites for major auto manufacturers such as Honda.com and Toyota.com. How

helpful do you consider the websites to be for alternative evaluation? What aspects of the

websites did you like?

2. Ask fellow students what they consider evaluative and determinant criteria in the decision

to choose their college. In what ways are their responses similar to your opinion? In what

ways do they differ?

13. In what ways do your friends influence the types of information that you seek about

products? Think of a time when a friend led you to consider specific information about a

product that you hadn’t previously considered. How did this affect your decision making?

14. When searching for a job, what type of decision-making process discussed in this chapter

would apply best to your decision of which job to take? Why?

15. The next time you go shopping, take note of all the green products you find in the store. How

are these products promoted? Do you think they’re as effective as other products? Why, or

why not?