Consumer Analysis - notes set 2b
Alternative Evaluation and Choice
 

Alternative evaluation
Consumer benefits and evaluative criteria
Consumer decision rules and heuristics
Planned versus unplanned purchasing
Outlet selection
Outlet image
Consumer choice and shopping behavior

How Much Search and Alternative Evaluation Is Done?
Extended (extensive) decision making:  much search, comparisons, rational, high involvement
Limited Problem Solving: simple decision rules are applied, based on prior knowledge, heuristics
Habitual or Routinized Response Behavior: no search, no alternatives may be compared, automatic, repetitious, known brands, low involvement

Alternative Evaluation
The process through which we compare and contrast different solutions to the same marketplace problem.
It is the third step in the consumer decision-making process:
Problem recognition
Search
Alternative evaluation
Choice
Outcomes

Getting into the Consideration (Evoked) Set
NOTE THE TERMS HERE
Universal set: all alternatives
Retrieval set (what you are aware of) vs. Unawareness set (what you don’t know)
Consideration set = set of acceptable alternatives
Inert Set = aware of, would not consider
Inept Set = aware of, avoided
What goes into the sets which you reject?
Cutoffs, signals (eg rating in Consumer Reports)
 

Suppose you want to buy charcoal for your grill?
Universal set: all types of charcoal
Retrieval set (charcoal you know about) vs. Unawareness set (charcoal you don’t know)
Consideration set = set of acceptable kinds of charcoal
Inert Set = aware of, not consider, maybe in emergency
Inept Set = aware of, avoided – not like these, bad experience?
 

How Many Criteria Do Consumers Use?
Typically, they use from four to six criteria
The more important the purchase, the greater the number of criteria used
Criteria may be used in combination
The more important the decision, the fewer the acceptable alternatives there are

What Is the Relative Importance of Each Criterion?
Importance = salience
Salience varies by the product and by the situation
Some product attributes may be salient to some consumers, but unimportant to others
Determinant attributes: those attributes that have a direct influence on alternative evaluation and final choice.
Some attributes are both salient (important) and determinant (necessary), some are important but not necessary to consider

Price and Brand as Evaluative Criteria
Two of the most important criteria used by consumers
Use of price as criterion varies across product categories:
Acceptable price range is determined by past purchases, perception of benefits,  perception of product costs, and buying situations.
Brand reputation
Brand may be viewed as an indicator of quality which may lead to lower perceived risk.

Consumer Decision Rules
They indicate how consumers evaluate products and services in different buying situations
They are used consciously or unconsciously
Three types of rules are:
Noncompensatory rule: one in which the weaknesses of an alternative are not offset by its strengths
Compensatory rule: allowing for trade-offs among strengths and weaknesses
Decision heuristics: these are rules of thumb or short cuts that allow quick decision making

Noncompensatory Rules
Disjunctive: decide which criteria are determinant (or not) and then establish a minimum score for each one.
Conjunctive: consider all criteria as determinant and then establish a minimum acceptable score for each one.
Lexicographic: rank each of the evaluative criteria in order of importance and eliminate alternatives based on first, second, third criterions, etc.
Elimination-by-aspects: rank the evaluative criteria and also establish minimum scores that must be met on each of them.

Poor medical care (determinant) can not be offset by a beautiful waiting room with good service

Compensatory Rules
Simple additive: total scores on all evaluative criteria for each alternative and the highest score wins.
Weighted additive: assign relative weight to each criterion based on perceived importance and then multiply the score by the relative weight to arrive at a weighted score (highest weighted score wins).

Decision Heuristics
Mental rules of thumb that help consumers reach decisions quickly and efficiently
Examples:
Price: the higher the price the better the quality
Brand reputation: if it’s brand X, it must be good (or bad)
Key product features: if a used car has a clean interior, a buyer may also infer a mechanically sound vehicle.
Market beliefs

Planned Versus Unplanned Purchasing
Four types of purchase situation:
Specifically planned
Generally planned
Substitute
Unplanned
Planned Purchasing Behavior
Understanding “buying intention” is key to predicting and influencing planned behavior
Measuring purchasing intention can be done through surveys:
Measures of intention may not provide accurate results due to changing situational influences.
The method of questioning may be flawed itself.

Intervention of Planned Purchases
Intervening variables: changes that may have an impact on the actual purchase behavior.
Financial status, employment situation, family or household size, weather, etc.
Deliberation: the longer we put off a purchase the higher the likelihood that either the purchase will not be made or the choice will change.

Unplanned Purchasing Behavior
Four types of unplanned purchases
Pure impulse: those that are bought for the sake of novelty.
Reminder impulse: are routine purchases, albeit unanticipated.
Suggestion impulse: when a product (not previously seen) stimulates immediate need recognition.
Planned impulse: responding to a special incentive to buy an item considered in the past but not selected.

How Do Marketers Encourage Unplanned Purchases?
Point-of-purchase displays
Reduced prices
In-store coupons or specials (Kmart’s Blue Light specials)
Multiple-item discounts
Packaging
In-store demonstrations
Store atmosphere
Salespeople

Free Trial as Incentive

Choice
Outlet selection or brand choice, which comes first?
Brand choice first
Brand loyalty
No outlet loyalty or preference
No need for the expertise of salespeople (knowledgeable consumers)
No, outlet choice first
High store loyalty or preference
Low brand loyalty
Need for helpful sales staff
Brand and outlet working together
Find the best fit for the consumer’s self image

Outlet Image and Choice
Image: it is the result of various functional and psychological attributes.
Functional attributes: merchandise, prices, credit policies, store layout, etc.
Psychological attributes: sense of belonging, feeling of warmth or excitement, etc.
Retailers use the attributes to design an image that appeals to their target market(s)
Influences on outlet choice include the level of involvement, perceived risk, advertising, prices, and outlet size

Impulsivity and use of Scents in retail environments

Consumer Choice and Shopping Behavior
Why do people shop?
Personal and social motives
How do people shop?
Shopping orientation: their style or way of shopping
Choice decision during the shopping process:
Which product to buy, how many, which brands to buy, which outlet to use, when to buy, how to pay, and other (should we buy extended warranty)?