Saturday, August 31, 2013

Influence the Compromise Choice Process

When faced with a good-better-best choice presented in that order, the typical shopper traditionally favored the middle alternative. Knowing about this compromise effect allowed a retailer to shape shopper behavior by the order of choices presented to the consumer. You’d put in the middle the alternative you thought would be best for satisfying the shopper’s needs and your profitability objectives.
     What strengthens or weakens the compromise effect?
  • Some of the causes seem odd until you analyze the reason. Researchers at Brigham Young University found that shoppers who feel physically off-balance are less likely to choose the compromise alternative than are shoppers who feel themselves to be in physical equilibrium. People subconsciously associate feelings of balance with attitudes of parity, in which price, performance, and other characteristics are traded off. 
  • There are causes which are related to the economic downturn of these past years. At a time deep into the Great Recession, researchers at Otto-von-Guericke-University and Karlsruhe Institute of Technology in Germany found the compromise effect to be strong among quality-seeking consumers, but weak and insignificant among the price-conscious segment. 
  • There are situational causes. Research findings from University of Hong Kong and National University of Singapore indicate that when a customer appears to be in an upbeat mood, he’s more likely to select either the first or the last alternative you propose than to select a middle alternative. On the other hand, when shoppers are worried, but determined to make the purchase rather than defer the decision, they seek the compromise alternative and will look for it as the middle alternative. Not the highest priced or lowest priced, but the middle priced. Not the highest quality or lowest quality, but the medium quality. 
  • Some causes are permanent enough in the shopper for you to either accept them or maybe work around them. Studies at Stanford University and University of Florida-Gainesville isolated a familial component. Given the choice among the $10, $20, and $30 sizes, some people will select the $20. If the choice is presented as among $20, $30, and $40, they will tend to choose the $30. And if one family member does this, there’s an increased possibility the close relatives also will. 
  • Presentation order matters. According to researchers from Hong Kong University of Science and Technology, people flooded with information become willing to buy a higher-priced alternative if the alternatives are presented in order from most expensive to least expensive. 
Click below for more: 
Compromise Effects with Shopper Segments 
Guide Choice by Sequence of Presentation 
Attend to Genetic Influences in Selling

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