Compensatory decision rule, Conjunctive decision rule, Lexicographic rule, affects referral, disjunctive rule27/10/2022 0 By indiafreenotes
Compensatory decision rule
A compensatory decision-making strategy weighs the positive and negative attributes of the considered alternatives and allows for positive attributes to compensate for the negative ones.
The number of options is the primary factor that determines what strategy people will use. That’s because this number determines the amount of effort necessary to sift through them.
When we evaluate just a handful of alternatives (around 5–7), comparing the attributes of each is a feasible task. By thoroughly reviewing these attributes, we can determine whether certain aspects are more important to us than others, and then allow the positive values to outweigh negative ones when assessing each alternative this is the compensatory strategy.
However, when there are many options, it would be daunting if not completely unreasonable to comprehensively compare the pros and cons of each alternative. In these situations, we turn to the non-compensatory strategy of eliminating any alternative that does not meet some key criterion. This approach allows us to narrow down the set of options quickly and easily, at the expense of not fully considering each.
A minimally acceptable cut off point is established for each attribute. The brands are evaluated, and, the brand that falls below the minimally acceptable limit on any of the attributes is eliminated/ rejected.
The conjunctive decision rule establishes minimum required performance standards for each evaluative criterion and selects the first or all brands that surpass these minimum stan¬dards. In essence, you would say: “I’ll consider all (or I’ll buy the first) brands that are all right on the attributes I think are important.”
Because individuals have limited ability to process information, the conjunctive rule is frequently used to reduce the size of the information processing task to some manageable level. It first eliminates those alternatives that do not meet minimum standards. This is often done in the purchase of such products as homes, computers, and bicycles; in the rental of apartments; or the selection of vacation options. A conjunctive rule is used to eliminate alternatives that are out of a consumer’s price range, outside the location pre¬ferred, or that do not offer other desired features. Once alternatives not providing these features are eliminated, another decision rule may be used to make a brand choice among those alternatives that satisfy these minimum standards.
The conjunctive decision rule is commonly used in many low-involvement purchases as well. In such a purchase, the consumer evaluates a set of brands one at a time and selects the first brand that meets all the minimum requirements.
If the conjunctive decision rule is used by a target market, it is critical to surpass the consumers’ minimum requirement on each criteria. Since the first brand the consumer evaluates that does so is often purchased, extensive distribution and dominant shelf space are important. It is also necessary to understand how consumers “break ties” if the first satisfactory option is not chosen.
The various attributes are ranked in terms of perceived importance. First, the brands are evaluated on the attribute that is considered the most important. If a brand ranks considerably high than the others on this attribute, it is selected. In case the scores are competitive, the process may be repeated with the attribute considered next in importance.
Sometimes the application of one rule may not be enough; and another may also be applied to reach a final decision.
The lexicographic decision rule requires the consumer to rank the criteria in order of importance. The consumer then selects the brand that performs best on the most important attribute. If two or more brands tie on this attribute, they are evaluated on the second most important attribute. This continues through the attributes until one brand outperforms the others. The consumer’s thinking is something like this: “I want to get the brand that does best on the attribute of most importance to me. If there is a tie, I’ll break it by choosing the one that does best on my second most important criterion.”
The lexicographic decision rule is very similar to the elimination-by-aspects rule. The difference is that the lexicographic rule seeks maximum performance at each stage while the elimination-by-aspects seeks satisfactory performance at each stage. Thus, using the lexicographic rule and the data from the elimination-by-aspects example above would result in the selection of Gateway, because it has the best performance on the most important attribute. Had Gateway been rated a 4 on price, it would be tied with Dell. Then, Dell would be chosen based on its superior weight rating.
When this rule is being used by a target market, the firm should try to be superior to the competition on the key attribute. This competitive superiority should be emphasized in advertising. It is essential that the product at least equal the performance of all other competitors on the most important criteria. Outstanding performance on lesser criteria will not matter if a competitor is superior on the most important attribute. If a competitive advantage is not possible on the most important feature, attention should be shifted to the second most important (assuming equal performance on the most important one). If it is not possible to meet or beat the competition on the key attribute, the firm must attempt to make another attribute more important.
The ad shown in Illustration 16-6 emphasizes the ability of this Columbia parka to protect the wearer from bad weather. No other attributes are mentioned. This ad is appropriate for those consumers whose decision rules place primary importance on this attribute.
A type of decision rule where selections are made on the basis of overall impressions or affective summary evaluation of the various alternatives under consideration.
A minimally acceptable cut off point is established for each attribute. The brands are evaluated, and, the brand that falls above the cut-off point on any of the attributes is selected.
The disjunctive decision rule establishes a minimum level of performance for each important attribute (often a fairly high level). All brands that surpass the performance level for any key attribute are considered acceptable. Using this rule, you would say: “I’ll consider all (or buy the first) brands that perform really well on any attribute I consider to be important.”.
When the disjunctive decision rule is used by a target market, it is critical to surpass the consumers’ requirements on at least one of the key criteria. This should be stressed in advertising messages and on the product package. Since the first brand the consumer evaluates that exceeds one of the requirements is often purchased, again extensive distribution and dominant shelf space are important, as is understanding how consumers “break ties” if the first satisfactory option is not chosen.