Consideration Set Influences on Consumer Decision-Making and Choice: Issues, Models, and Suggestions Author(s): Allan D.

Shocker, Moshe Ben-Akiva, Bruno Boccara and Prakash Nedungadi Reviewed work(s): Source: Marketing Letters, Vol. 2, No. 3, Consumer Decision Making and Choice Behavior (Aug., 1991), pp. 181-197 Published by: Springer Stable URL: http://www.jstor.org/stable/40216215 . Accessed: 17/12/2012 03:34
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

Springer is collaborating with JSTOR to digitize, preserve and extend access to Marketing Letters.

http://www.jstor.org

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

Letters 2:3, (1991): 181-197 Marketing in theNetherlands. Manufactured Academic 1991Kluwer Publishers,

on Set Influences Consideration andChoice: Consumer Decision-Making Issues,Models,and Suggestions

ALLAN D. SHOCKER 271 19th Avenue CarlsonSchoolofManagement, So., Minneapolis, University ofMinnesota, MN 55455 MOSHE BEN-AKIVA Center Studies, forTransportation Institute Massachusetts of Technology BRUNO BOCCARA Institute Massachusetts of Technology ofEconomics, Department PRAKASH NEDUNGADI* Ontario CANADAW5S1V4 Toronto, University ofToronto, Faculty ofManagement, Choice Consideration Set,Consumer Decision-making, Keywords:

Abstract
consumer choicedecision-making a stylized viewofindividual to Thispaperaffords appropriate It summarizes issuesrelating set effects decisions. to consideration thestudy ofmany marketing consideration setsreally existand,ifso, and choice.It discusseswhether on consumer judgment androleindecision-making. It examines their some that affect thefactors structure, composition, andmodeling ofconsideration on decision-makinthemeasurement seteffects newdevelopments with forneededresearch. suggestions ing.The paperconcludes

role to accounts of humandecision-making Most contemporary give a prominent the to used This extends not only by the "process" presumedly simplification. the where dea decision, in reaching decision-maker acknowledges simplification and easier but task morefunctional, also to to make his/her efforts cision-maker's themodelsof thatprocess proposedby those who studydecision-making (Wright a factthatis because theyare tractable, 1975). Simple models are to be preferred when the analyst's task is to make predictionsfor large important particularly have quesnumbers of consumers.On theotherhand,manybehavioralscientists finda process tionedtheadequacy of such models as explanationsince theyoften
ideas and perspectives contributed thenumerous *Theauthors wishto acknowledge bytheother BillBlack ofAlberta), Mukesh oftheBanff members (University Bhargava workshop: Symposium of of Iowa), HotakaKatahira(University GaryGaeth(University (LouisianaState University), David of Levin Irwin Iowa), Laurent (University Gilles France), HEC-ISA, (Centre Japan), Tokyo, UniMethodist Novak(Southern Thomas Schoolof Management), Graduate (Australian Midgley their confrom has benefited This of greatly and Alberta). paper James (University Wiley versity), tributions.

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

182

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

thatis too complex to be modeledsimply. Human decision-making is stillnotwell enoughunderstood(as indicatedby a largeamountof ongoingresearch)to clarify the distinction betweenthe process of decision-making and models used to representthat process. The distinction remainsambiguousso thateven what some researcherscall "process" may only be theirmore sophisticatedmodel rather thansome revelation of "truth."All one can oftensay withassurance is thatone model appears more "realistic" thananother. are bothcritically because to marketing, Explanationand prediction important of the inherent desire of marketers to take actions which will be differentially and decision-maker accepted by potentialcustomers.We focus on the individual develop a stylized "process" by which this individualarrivesat a choice. The decisions we emphasize are separable and discreteand will be assumed to have well-defined boundaries,i.e., theyhave weak future (We avoid sitimplications. uationswhichtie decisions together such as "I'll scratchyourback ifyou scratch mine" behavior,whereone decision createsconcurrent with or future obligations respect to another). We concentratelargelyupon decisions made by choosing fromalternatives whichare activelyprocessed or consideredat or near the time of decision. This permitsus to ignoremost information search in real time; but the past search used to establishan information base is recognized.What results is a view of individualconsumerchoice decision-making to the study appropriate of manymarketing decisions and consistent withmuchliterature. 1. A modelof brandconsideration Our characterization of decision-making is based upon hierarchical or nestedsets of alternatives are processed by thedecision-maker which,save forthefirst, prior to choice. (See Nedungadi (1987) fora moredetaileddiscussionof such a model of sequential choice.) The universalset refersto the totality of all alternatives (usually branded productsor services) that could be obtained or purchased by in the universalset may be any consumerunderany circumstance.Alternatives irrelevant to or unobtainableby a given consumer.This set merelyprovides a starting point(i.e., the set of all goods and services) fromwhich sets of greater interestmay be constructedby the decision-maker, eitheraccidentallyor purposefully. As its name implies,the awareness or knowledgeset consistsof the subset of items in the universal set of which, for whateverreason, a given consumeris "aware" (whetherthey "come to mind" on a given occasion or not) and which are believed appropriate forthe consumer's goal(s) or objectives. Knowledge of the items in this set is presumedto reside in individuallong-term memory;any itemcould potentially be selected forprocessing. [If decision-making is not enbased on information in active memory, theawareness set may also include tirely those itemsthatthe individualmay perceive or encounterin the (external)decicontext(e.g., brandson supermarket shelves)at thetimeofdecision. sion-making

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

183

can providean additionalsource of itemsto the This set of externalalternatives when information about themis processed and can also serve to decision-maker in memory.] cue information It is fromthe awareness set thatthe focus of our concern, the consideration set is purposefully constructed and can be viewed set, evolves. A consideration as consisting of thosegoal-satisfying alternatives salientor accessible on a particular occasion. While an individualmay have knowledgeof a large numberof alit is likelythatonlya few of these will "come to mind" fora relevant ternatives, use or purpose. [Narayana and Markin (1975) offera classificationof aware brands not considered into two additional sets, termedinert(i.e., brands that customermaybe aware of but nothave processed or givenseriousconsideration) and inept{i.e., alternatives thecustomermaybe aware of butwould notconsider or highsatisbuyingbecause of previousunfavorable experienceor information factionwithexistingchoices). It should be noted that,as these sets are not part of the "process" by whichtheconsumerarrivesat choice on a specificoccasion, theyare not includedin our model.] The decision-maker need not,and typically does not,possess the same level of in any set. More information knowledgeabout each alternative may be acquired once it is realized a decision is to be made, but oftena decision will reflect only theavailable information about alternatives. since consideration sets are Further, fora purpose,theyshould also be affected formed by factorsof contextsuch as intendedusage (Ratneshwarand Shocker 1991) and prompting by existingretrieval cues (Nedungadi 1990a). Since theyare goal-driven, thealternatives in the consideration set need not even be membersof the same nominalproductclass; suitableforthe intendedpurpose(s) theymerelyhave to possess characteristics (Barsalou 1985, Park and Smith 1989, Ratneshwarand Shocker 1991). [A goal such as gift-giving mayincludediverseitemssuch as cameras, watches,pens, etc. as alternatives. These optionssatisfy criteriasuch as "the recipient would be exa desiredprice range.] pected to enjoy them" and theyfallwithin As depictedhere,theconsideration set is dynamicbothwithin and across usage occasions. The consumerprocesses his/her options in working memory, adding or deleting as necessary.Additional elementsmaybe recalledor encountered during the decision process itself.For instance,a store at which the consumerencounteredparticularly rude service may "come to mind," but can be removed fromconsiderationwithlittledeliberation.Further,some accessible items may of serious further evaluation.Thus, the considerationset may hardlybe worthy evolve untilthe consumerdecides to make a finalchoice. It may be createdanew on each decision occasion or possiblyeven be largelyirrelevant ifno active processingoccurs priorto choice (e.g., underroutinized responsebehavior). Because of its dynamicnature, it is sometimesusefulto defineanother, closely relatedset in more staticterms.In this interpretation, the choice set, is defined as thefinalconsideration consideredimmediately set, i.e., the set of alternatives set reflects effort priorto choice. If, as hypothesized, entryto the consideration (i.e., cost)- benefittrade-offs (Hauser and Wernerfelt 1990), thenthe choice set

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

184

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

should the from consist offewer, differentiated selected more alternatives, highly set. (totalrecall)consideration 1 illustrates thenesting the ofthesetsdefined above.Thisfigure follows Figure convention of depicting latent constructs in ovals and items observable directly or measurable in rectangular a bigger to a boxes. The processof nesting from smaller set does notnecessarily sincecertain set formations imply sequencing, we also allowfor feedback mayoccursimultaneously. lines)since (dotted Finally, canteachandthus affect those alternatives as wellas those considered experience chosenat later times.1 Ourunderstanding ofconsumer choiceis aidedbysucha framework. The hierarchical or nested nature ofthismodelofdesimplification on thosefactors which control cision-making helpsfocusattention passagefrom one stageto another. Different awareinmoving from processes maybe involved ness to consideration and from consideration to choice(Nedungadi 1990a).Re-

Universal Set

|^

Awareness Set I T Q Consideration Set^\ir

>*l Context [External Alternatives] I- -----J

^y^

^ChdceSet^

I Choice I
choice. Figure1. A modelofindividual

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

185

forexample, have postulatednon-compensatory models fordeterminsearchers, ing the compositionof a choice set and compensatorymodels for evaluating and Barbour 1977; Bettman optionsin the set in orderto make a choice (Wright or levels are 1979;Gensch 1987). This impliesthatcertainproductcharacteristics and thattradenecessaryforthatitemto be consideredat all (non-compensatory) are made onlywithin thisrangeof acceptable attribute levels and/or withand offs betweenless criticalattributes. The sets and theirdefinitions given above are not universalin the literature. Brownand Wildt(1987) comparefivedifferent of concepts operationaldefinitions similar to theconsideration set. Some authorsdo not distinguish betweenconsiderationand choice sets and use "considerationset" forboth constructs.Howard and Sheth (1969) used the concept of the evoked set and definedit as "those brandsthe buyerconsiders when he (or she) contemplatespurchasing a unitof theproductclass (p. 416)." This definition is closest to whatwe have termedthe choice set. Others(e.g., Silk and Urban 1978) have used a moreinclusivedefinitionforevoked set thatwould includewhat Narayana and Markin(1975) refer to and ineptsets. Regardlessof their as theinert nestedsets have precisedefinition, been used to characterizeconsumerdecision-making. Most previous commonly however,have not examinedthe precise role of these sets in the dydefinitions, namic process by which the individualarrivesat a choice decision (Nedungadi 1987). 2. Evidenceforconsideration sets Considerationand choice sets are not directly observable. However, thereare thatcould be used to supporttheexistenceof thenestedprocess manyarguments described above. Hauser and Wernerfelt (1990) and Roberts and Lattin (1990) to understanding theroleand rationale providerecentreviewsofresearchrelevant for considerationsets. They note that the existence of considerationsets is a and has strong logicaloutcomeoftheoriesin economicsand psychology empirical support,much of it reviewedin theirtwo papers. Research in the economics of information search suggeststhatconsumerswill continueto search forinformathatsearchexceed themarginal tionas longas the. returns from expectedmarginal cost of further betweenlong-and shortdifferentiation searching.In psychology, termmemoryis consistentwitha reductionprocess of the type assumed here, where items relevantto an immediatepurpose are retrievedfromstorage and made accessible. "Phased" decision strategies have been suggestedas characterin a number isticof humandecision-making of contextswhereconsumershave to and Barbour 1977; Bettman1979). The consumer (Wright cope withcomplexity theavailable alternatives is conceptualizedas first simple filtering usingrelatively decriteria and thenundertaking detailed analysis of thisreduced set. Different cision models (e.g., non-compensatory and compensatory,respectively)have been used to characterize the two stages (Gensch 1987).

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

186

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

Hauser and Wernerfelt size of consid(1990) summarizetheevidence regarding eration set for each of a large numberof productcategories (assumingthat all entriesconsideredcome onlyfrom thesame nominalproductcategory).They cite a rangein mean (or median) from2-8 withmost set sizes in the rangeof 3 - 6 thisevidence suggeststhatmostpeople circumstantial, (p. 394). Whileadmittedly considerfarfewerthanthe total numberof brandsavailable, providing evidence thatmostconsideration (choice) sets are small. More directevidence forthe existenceof consideration and choice sets is provided by the work of Nedungadi (1990a) and Ratneshwarand Shocker (1991). an effect on probability of choice by changing Nedungadiwas able to demonstrate the probabilitiesof brand consideration,withoutalteringbrand evaluations,by differential of brandsin productcategorieswithknownstructures. Ratprompting neshwarand Shocker examinedthe natureof categorization of productsin memof different ory. Their Study 3 provided evidence that the presentation specific that reasoned usages cued different "typical" products.They usage was a proxy forconsumergoals or purposes and thatdifferent sets goals would cause different of productswithin the broad category(e.g., snack foods) to be considered. Finally,researchers usingthe "substitution-in-use" approachto product-market structure (Srivastava, Alpert,and Shocker 1984)have founda highlevel of agreementamong subjectsin the productstheywould considerfordifferent (specified) thatwhen usage and awareness are controlled fortheremay be uses, suggesting some similarity in the content,and possiblythe structure, sets. of consideration Taken together, these findings sets are (i) real, (ii) dysuggestthatconsideration namic,changingwithtimeand occasion, and (iii) affected by consumercontexts and purposes. 3. Alternative modelsof consideration set formation and change Both Hauser and Wernerfelt (1990) and Robertsand Lattin(1990) proposemodels of effort versus gain whichdeal withthe question of how consideration sets are formedand revisedover time. Hauser and Wernerfelt of the express probability inclusionof a brandin a consideration set atsa trade-off betweencosts and benefits.These includecosts of information searchand thinking about and evaluating the brandand the evaluationof the benefits the brandin or utility from including the considerationset fora particular is dyTheir model occasion. consumption namicacross (but not within)occasions because the contentof the consideration set can evolve as costs and benefits change over time,possiblyleadingto items to be "the process" being removedfromthe set. Their model does not purport consumersuse to formconsiderationsets, but merelya "reasonable representationof theresultsof individual-specific and situation-specific judgments (p. 398)." Priorto detailed evalThey postulatetwo stages to considerationset formation: uationconsumersuse informal, means to gatherinformation. This inforheuristic mationis used to screen alternatives evalpriorto the moredetailed,systematic

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

187

costs versusbenefits. Hauser and Wernerfelt testtheirmodelin an uationof their the manner distribution of consideration set size in differby predicting aggregate ent productclasses. Robertsand Lattin,propose a similarmodel and findsupportforit at the individuallevel. In their model some processingis necessaryto make the preliminary effort versus gain calculations which screen candidates for entry; such effort is rejected.Also their framework being"wasted" iftheentry impliesthatall memthatis bers of a productclass are screened for possible inclusion,a contention probablynot supportableempirically. Finally,theiranalyses, as well as those of are organizedaroundnominalproductclasses and do not Hauser and Wernerfelt, considerationsets thatcan be impliedby usageprovideforthe heterogeneous drivengoals. Swait (1984) and Ratneshwarand Shocker (1991) viewed considerationand choice sets as arising out of theconstraints imposedby individual goals and other withavailable alternatives and otherenvironinteracting personalcircumstances mentalfactors(e.g., social considerations).Swait proposed a typologyof conurbantravelthatencompasses a) household,b) societal,and straints to individual There are two majorcategoriesof householdconstraints: c) personalconstraints. are exemplified by such factorsas residentiallocation and physicalconstraints resourceavailability (e.g., householdincome,automobileownership)and the inthe household (relatedto lifestyle dividual's statusor role within or stage in the lifecycle) whichmaylead to differential access to alternatives even (e.g., children of drivingage may not have primary access to a car). Societal constraints are of alternatives those imposed by availability (which presumeconsumersare not able to create theirown options). Personal constraints relateto individualtastes and preferences and to the role thattheindividual othersto have on their permits also includeobjectiverestrictions decisions. Personalconstraints such as possession of a driver'slicense. whattheyterma "comparisonset." It Laurentand Lapersonne(1990) identify thatotherproductsin the awareness set may affectthe suggeststhe possibility consumer'sdecision even thoughtheyare not consideredforchoice. For examtrade-offs or featuresmay serve to facilitate choice among alple, price-quality ternatives that,say, are more affordable (e.g. a retailerplaces a nationalbrand nextto the store'sprivatelabel to communicate value; a realtor greater acquaints a clientwitha more expensive home to positionthe less expensive ones he/she thatothers expects to eventuallysell). An individualmay consider alternatives wish him/her to consider,even thoughthe individualwould not otherwisehave occurs in industrial or family selectedthemforinclusion.This presumably buying wherethe decision-maker is actingas an agent forothers buyingcircumstances his decision to others(Simonson 1989). or otherwiseneeds tojustify Black (1990) has reviewedmuch of the literature dealing withchoice set formationin thecontextof consumers'retailstorechoice behaviors.In thiscontext, researchhas linkedchoice set characteristics to characteristics of the decisionmakeror of the outlets.Socioeconomic characteristics household income, (e.g.,

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

188

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

and educational affect oftravel which level,percent range single-family housing) levelofdemand and/or of outlets from outlet characteristics travel distances (e.g., outlet's levelofpromotion) are used in descriptive models.Such apcustomers, assumereasonably causal stable consideration sets,sincethepresumed proaches factors are themselves stable.
4. Role ofconsideration setsin modelsof consumer and choice decision-making

Mostindividual-level models ofbrand choicehaveignored effects oftheconsideration set and focusedinstead on theroleof brand in determining evaluations choice from within a given,researcher-specified set of alternatives. Arbitrary of such alternatives is possibly which one ofthefactors specification givesriseto "violations of the so-calledIndependence from Irrelevant Alternatives (HA)" inwhich a newalternative addedto a setdrawssalesdisproportionphenomenon alternatives moresimilar to it,rather thanproportionately atelyfrom (to choice all alternatives from in theset (Wiley1990).Prior of determination probability) theconsideration in restricting a choicemodelto considered set,whichresults alternatives should thepredictability ofchoicemodels only, (Hauserand improve Gaskin1984;Silkand Urban1978).Forexample, Hauser(1978)uses a goodnessof-fit statistic toarguethat theconsideration setaccounts for 78% oftheexplainable uncertainty in choicedatawhilea logit modelbaseduponconsumer preferenceaccounts for only22%. For marketing a practical benefit ofconfrom theincorporation models, then, sideration setsis more accurate the from choicemodels that prediction recognize twostages involved and Urban and Gaskin1984; Gensch1987; (Silk 1978;Hauser inmodels also appearto benefit from 1988).[Perceptual Fotheringham mapping of consideration a sets(Katahira theconcept of concorporation 1990).Further, sideration set is also useful and to marketers a market as it can aid in defining its structure and and (Urban,Johnson, Hauser 1984;Ratneshwar investigating Shocker In particular, oneofthemore useful is discreteformats 1991).] modeling choiceanalysis. Its purpose is to modela choicefrom a mutually colexclusive, exhaustive set of LerBen-Akiva and alternatives lectively (e.g., McFadden1984; man 1985),i.e. whatwe have termed a choiceset. Mostof thediscrete choice andapplications methods treat thechoicesetas given deterministor predictable an alternative is availableor not).Whilethismaybe a reasonically(i.e., either able assumption in certain it is notin general. Neither is therelated instances, often that all individuals have the same choiceset. An indimade, assumption, - which vidual'schoiceset dependsuponthat individual's environment specific reflects notonlyobjective constraints characterissocio-economic (e.g., his/her ticsand theattributes to his/ ofthealternatives), butalso subjective onesrelated herattitudes andperceptions. in thesensethat arelatent Choicesetsthemselves be cannot imputed with data.Sucha on thebasisofobservational they certainty conclusion that a more realistic model ofindividual would choicebehavior implies treat choicesetgeneration as probabilistic.

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

189

Manski (1977) suggestedthatthe entirechoice problembe expressed probabilas: istically Pn(i) =2 Pn(i|C)Pn(C|G) CeG(i) WherePn(i)is the probability of individualn choosingalternative i; i given that the of individualn choosing alternative Pn(i|C) is the probability a C random choice set is (e.g., model); utility of C beingthe choice set of individualn; Pn(C|G) is the probability G is the set of all possible choice sets; and i. G(i) is the set of all elementsof G thatcontainalternative a two-stage choice paradigm: Expression(1) reflects a givenchoice set, Pn(i|C); and choice from (i) probabilistic a choice set model, Pn(C|G) (ii) probabilistic generation A high degree of complexityis implied by (1) since the numberof possible choice sets is verylarge.Swait and Ben-Akiva(1987) describea priorirestrictions used by researchersto reduce the dimensionality of the choice set generation a also behavioral of to explain problem.They suggest theory randomconstraints theprobabilistic natureof choice sets and providean approach to parameterizing choice set models. Theiridea of "randomconstraints" is based upon thefactthat different individualsare expected to have varyingperceptionsof the degree to whichan operativeconstraint limitstheiraccess to certainalternatives (e.g., the maximum distance a to acceptable walking subway stop is likelyto vary across individuals). The Ben-Akivaand Boccara (1990) model is in thistradition. They formulated a probabilistic latent choice set model,whichtheytestin an empirical study.Their choice set model includes explicitrepresentation of choice set constraints (i.e., criteria choice sets mustsatisfy forfeasibility). Analysisis carriedout at the level of the individualand explicitly considers his/her heterogeneoussituationalconstraints and preferences. The choice models are specifiedto explain observed behavioras a function of bothlatentfactorsand observablecharacteristics. Their constraint-based approachto choice set formation postulatesthatat thefirst stage of thechoice process theindividual excludes from further consideration available alternatives not meeting certaincriteria.This stage is non-compensatory. Thus a in an attribute of an alternative can have two separate effects:an availchange effect effect (is it in thechoice set?) and a substitution ability (ifit is in the choice of their framework involvesbothobservset, will it be chosen?). Implementation ables (socio-economic characteristics, attitudesand percepproductattributes, tionsof availability, knowledgeof actual choices) and latentvariables(essentially the unobservable constraints that determineavailabilityof alternatives).Their (D

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

190

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

main thesis is that latent Their can be inferred indicators. variables from observed research theefficiency demonstrates ofpaofincreased gains(interms precision rameter from with ofchoice estimates) data,indicators using, jointly preference setformation. Substantial in estimating their thesemodels difficulty mayhinder future use, however.
5. Marketing issuesand researchimplications theconsideration set concept from

Ourobservations ofconsumer the arearound as they decision-making, organized relations distinct setsandprocesses, focusattention role on theimportant among suchas consumer Novak(1990)and playedbyfactors goalsor usageintentions. Ratneshwar and Shocker thepotential ofusageor (1991)recognized importance in affecting theformation and content of consideration and choicesets purpose and Shocker Novak (Study3 in Ratneshwar (1991)provides empirical support). as wellas Bhargava forresearch whether or not (1990)haveraisedas questions factors ofintended choicesetformation in thesamemanner as they usageaffect affect consideration set formation? Moregenerally, are thefactors affect which movement from awarenessto consideration different from thosewhichaffect movement from tothechoiceset?Suchresearch consideration couldholdimportanceformarketing in improving interested the likelihood thattheir managers The cueing of specific alternatives products getconsidered. product bycontacts with friends and acquaintances or with and other promotional marketing activity retrieval and thustheforfrom (e.g., sales personnel) mayalso affect memory mation ofchoicesets. Nedungadi (1990a)has identified (ease ofreaccessibility and preference as twopotentially in thisprocess.Ex factors trieval) important ofthecomposition ofeach set maypermit inferences aboutthe post knowledge criteria used to determine which willbe included in theconsideration products setand,possibly for final choice. also, thecriteria theability of an alternative (1990)has also raisedissues regarding Bhargava thathas once beenrejected to re-enter thechoicesetat a later time.For recondo entry or exitcriteria haveto change or do perceptions ofthealtersideration, native? research thestructure sets contrast ofconsideration Additionally, might of"experts" with thoseofnovices.Experts certain leaders"for maybe "opinion ofdecisions and their influence and exit extend to criteria for types might entry as wellas to thespecific content and structure sets. offollowers' consideration The distinction between consideration could shed setsof leadersand followers of usingsuch sets,or their as modeof construction, light uponthefeasibility meansforsegmenting leadersor customers (or forpossibly opinion identifying experts). Somewhat different to elicit havebeenshown (micro) specific usagesituations similar brands and products that it forconsideration acrossindividuals, implying to createa taxonomy basedupon ofusagetypes maybe feasible (macro-usages) theirimportant attributes or characteristics Leone, and Shocker (Srivastava,

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

191

sets in1981). The factthatmanyspecificusages can elicitsimilarconsideration It maynotbe necessary to marketers. creases therelevanceoftheusage construct of the manyidiosyncratic to considermorethana small fraction usages to make as representative use of theconstruct.Promotional cueingof a specificsituation, and/or allow differof its type,may automatically suggestothermicro-situations ent consumersto relate. While these generalizations are consistentwiththe Srivastava, Leone, and Shocker research, more specific studies are necessary to theextentofsuch generalizability. consideration And,finally, investigate although sets were definedat the individuallevel, aggregatesets (e.g., formedfromthe unionof individualsets and based upon a defensiblerationaleforaggregating individuals, such as common usage relevance) may prove useful in determining and Shocker 1991).The linkageof con(Ratneshwar competitive product-markets siderationsets to product-market structure may suggesta fruitful approach to of specificmarketsis as it is and help managers understanding whythe structure it will be to change thatstructure. decide how easy or difficult that usages themselveshave structure. Novak (1990) has hypothesized Some or dominant or occur morefrequently thanothers. He typesare moreimportant has asked whatare the moreappropriate forms(e.g., tree,spatial, network) for this structure of usages? At what level (i.e., productsor brands)? representing at the individual Once defined best be aggregated? level, how can such structures we need also to investigate To investigate such effects, the validity of aggregate measuresof usage importance. Additionalissues involving the relationof usage and consideration situations sets pose topicsforpossible research.Do thenumber of specific(micro) usage situations encounteredby an individualaffectthe long termstability of consideration sets and the structure them? amongbrandswithin Does the number of brandsappropriate fora usage situation affect the stability of theconsideration or choice sets? An obvious researchquestionis to examinetherole thatmarketing actions play of consumerpurpose(s) in specificsituations (or can play) in both the formation and in the association of specificproductsor brands withthose purposes. To a considerableextentconsumers self-selectmany of the situationsthey will encounterwhen theymake fundamental choices of such thingsas career and lifeand seems amestyle(Snyder 1981). But the process is farfrompredetermined nable to influenceby marketing actions. Moreover, associations of specific productswithparticularpurposes are learned responses and thus amenable to influence actions (e.g., productdesign, selection of productposiby marketing and imagery, selectionof price levels, and distribution Promotioning intensity). tioncan educate as well as remind. Product/service value forthe money, features, and qualityhelpdistinguish an alternative and make it more(or less) probablethat thebrandwillentertheawarenessand consideration sets of those consumerswho findthefeatures attractive fortheirpurposes. and choice sets may be expanded through Consideration strategies marketing such as "productbundling,"wherenormally separate productsare sold together for a single price. The primary product may be one already in an individual's

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

192

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

and theoretical consideration are not.Recent often set,butthe"tie-in" products andchoice lendsupport totheinfluence on consideration empirical developments acsets of sucha marketing Thaler(1985)described forms of "mental strategy. for whenaccounted maximum effect by whichgainswillhave their counting" but perceived them losses maybe minimized together. separately, by lumping that is These predictions follow from theassumption ofa valuefunction directly concaveinthedomain inthedomain ofgainsandconvex oflosses.Thusa product a total with of separately features bundle, consisting packaged (gains),together cost (loss) lumped intoa single sum,maybe evaluated favorably byconsumers. and Levin(1991) This was confirmed in a study by Gaeth,Levin,Chakraborty, - calin whichconsumers realproduct bundles (electronic typewriter inspected culator them on a number pairsor VCR videocassette tapepairs)andevaluated ofdimensions. thesum Not onlywerebundles to be worth morethan perceived oftheir butproduct wereevaluated than theuse of bundles more parts, favorably cash rebates. comparable Much research withconsideration sets has focusedupondescriptive dealing their andstructure. content size) andignored aspects(notably specific Nedungadi theeffects of "promptto predict (1990a)has beenan exception, usingstructure of the choice set. Ratneshwar and Shocker(1991)have ing" on theformation demonstrated different content and structure of consideration setsas a function ofintended ofsuchsetsas a function ofthe oforder ofentry usage.The structure inthesethas beendemonstrated alternatives at an aggregate levelbyHauserand Wernerfelt inturn that (1990).Theseconnections mayexist suggest opportunities for suchtopics as thecorrespondence between thesimilarity ofbrands examining within nominal and their in consideration product categories joint appearance a productofconsideration setsas thebasisfordeveloping sets;theaggregation market definition and structure; and theroleof"order of oflearning" (i.e., order at theindividual of consideration sets. Srivastava, entry level)on thestructure and Shocker Leone, and Shocker(1981)and Ratneshwar (1991)have also providedevidence that consideration with different setscouldinclude physproducts ical characteristics deliver thefunctional benefits (butwhich bya particrequired ularusage).Thissuggests consideration newresearch maybe neededto examine set size, rather thanbasingevidenceuponquestions singleproduct presuming as was done in the findings summarized categories by Hauserand Wernerfelt (1990).

6. Researchissues/needs choice in modeling setsand consumer consideration

It seemsclearthat models different decision contexts couldnecessitate different in cases of decision-making. set formation Choice may precedeconsideration Some where is important. or learning aboutalternatives ofexperience acquisition haveandmayseek with thealternatives decision-makers they maynotbe satisfied

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

193

additionalones or may need to search to assure themselvesof the adequacy of We have emphasized choices based upon inthe alternatives already identified. in memory, decisions combine memoryfactorswith inforformation yet many mationacquired in real time. Decision-making when a may proceed differently choice set consists of both (e.g., mixed choice tasks, Lynch, Marmorstein, and How does of the alchoice 1989). Weigold, differing depth knowledgeregarding ternatives affectchoice? What factorsaffectthe depth of knowledge acquired alternatives(i.e., when individuals search for information regarding regarding choice alternatives, do theyacquire the same information about each or do they make inferences about missinginformation)? Should, as Johnson(1984) has arbe modelled when theconsideration set consists gued, decision-making differently different of itemsfrom nominalproductclasses i.e., so-called "non-comparable" An investigation alternatives? of theexisting literature on consumer judgmentand choice might be able to producea taxonomy ofdecisioncontextsproviding insight intothe decision models appropriate to each category. The modelingefforts we noted above, withthe exception of Swait and BenAkiva (1987) and Ben-Akivaand Boccara (1990), depend upon valid identification of choice sets. What are the best measureablecriteriato use shortof askingindividuals to self-report? Is thereevidence that choice sets can be reliablypredicted fromdemographicor other data about the decision-maker?Nedungadi constructs such as choice sets and consideration (1990b) has questionedwhether sets are even meaningful to respondents. If theyare not,how valid will questions be whichask forself-reports? He has asked whether considerationsets exist in and are retrieved as needed or are on the long-term memory simplyconstructed If well defined consideration or choice sets do not can the spot? exist, multi-stage decision model stillserve as a usefulparadigm?Consider,forexample, a model wherenon-compensatory rules are used to narrowdown the set of alternatives and a compensatory decision rule is employedto arriveat the finalchoice. The boundariesbetweenthe stages of this model are not well-defined; yet,an empirical versionof such a model withlatentconsideration (or choice) sets could be estimated. Is such a model more "realistic" than a single stage model? uniquely Do such generalizations useful and better provide insights predictions?Finally, how shoulda model of considerationbe specified? (and choice-) setformation What happens in prediction of consumerchoice when choice sets are moder[For example, in calibrating atelymisspecified? conjointmodels, an individualis asked for or choices from typically preferences among a set of researcher-specifiedalternatives, are usuallynotthosethesubjectwould have i.e., thealternatives consideredhim/herself.] Are models calibratedon the basis of "choices" from sets still valid? [To minimize is, of course, a major musspecified misspecification reason for being interested in the construction of choice sets at the individual decision-maker of choice model estimation which ignored level.] The limitations the problemof individualchoice set specification (e.g., by assumingeveryone chose from the same set or thatthe choice set was the completeset of available was recognizedearly.For instance,in the transportation choice litalternatives)

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

194

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

eratureStopher (1980) and Williamsand Ortuzar(1982) offer empiricalverification of the inconsistency in parameterestimatesthatcan arise when individual choices sets are misspecified. Swait (1984) providesa theoretical backingto these a specification erroranalysisfora binarychoice empiricalfindings by presenting are captiveto situation in whichthe analystignoresthefactthatsome individuals one alternative.Swait is able to conclude that misspecification leads to biased in the on modelingchoice set formation parameters.A review of the literature contextof discrete-choice the issue, determinmodels (whichconsidersignoring isticchoice sets, probabilistic such choice sets withand without priorrestrictions as captivity, and use of randomconstraints) is foundin Boccara (1989). It seems also clear thatthe relationof consideration sets to choice itselfis influencedby the natureof the choice task. Laurent and Lapersonne (1990) have arise wherea choice or consideration set may consuggestedthatcircumstances sist of only a singleproduct/service alternative. This can happen when products are infrequently purchased,costlyor risky"experience goods" (where one may not be able to judge theirquality or suitability priorto purchase and use), or complex goods comprising many elementsor auxiliaryservices (which may be anotherexample of an experiencegood). These circumstances are morelikelyin industrial decisions than in the packaged goods domain,where much marketing of the decision researchhas been conducted. Only one suppliermay be available and therefore the choices may involve the termsand conditionsof the relationat all. They also whether to have a relationship ship, only incidentally including suggestcircumstanceswhere a major decision objective may be learningabout alternatives to aid future decision-making {e.g., acquiringexperiencewitha prospective vendor to assess the quality of his service or consistencyof product or to guide search activity(which clearly also involves decisionperformance) of a conmaking).In these cases the productchoice may precede the formation siderationset. Or the choice may no longerbe among products,but among vendors (e.g., thedecision-maker make of may have decided to purchasea particular automobileand the choice is now from whomto purchaseit). Laurentand Lapersonne's ideas serve to illustrate that some of the complexity awaits those who seek to develop models of consideration and conset formation sumerdecision-making. It pointsout once again thattheprocess may be different fordifferent kindsof decisions. Research whichcreates a taxonomyof decisioncontextsmay be necessarybeforeone can meaningfully decide whatkind making of model or framework to use to explain or describe decisions of thattype. The examples used serve to providesome evidence thatin certaincontextsdecisions witheach otherand, therefore, in empiricalworkattention may be interrelated needs be paid to defining the boundariesof the decision. Some decisions may be constrainedby the inherent natureof the choice alternatives (e.g., "experience goods" require priorconsumptionin order to provide the personal experience sets of future choice occasions). Or the connecessaryto entertheconsideration exsequences of earlierdecisions may constrainlaterchoices, say, by affecting the a desire to confirm perience withor ownershipof certainoptions or creating

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

195

choice.Finally theanticipation correctness oftheearlier offuture decisions may theconsequences affect current choices(e.g., whenone tracesthrough ofa defrom cision or works endsbackto means).
7. Conclusion

atraising beenmore successful issuesthan hasundoubtedly Thispaper suggesting andthelimits ofdecision-making butthis is testimony tothecomplexity answers, The arenaofconsideration and choiceset effects to ourpresent understanding. a fruitful remains one for research andthispaperhastried on consumer decisions muchcollective of theseissues revealed to provide somedirection. Discussion Muchof limited individual andexperience, butwas also wisdom by perspectives. colthe which ofparticular decision is basedupon nuances ourthinking arenas, of made what and Some was notimportant. oredtheassumptions regarding was in the effort remain assiduous that discussion, inconsistency may present despite area it.The needfor a taxonomy ofdecision a priority contexts remains tocontrol a a enable of Such would more for research. taxonomy understandingthe precise which affect consideration set formation and constraints changeand thechoice that follow. decisions

Note
ofsuchfeedback within a tractable framework. 1. One difficult issueis theincorporation modeling andthecompleteness is a matter ofdegree ofone's knowledge "awareness"itself Forinstance, can differ bothacrossalternatives and timeand be affected alternatives by regarding product thedifferential rerolesthatinternal and experience. Understanding (e.g., education learning criandexternal environmental more criteria) circumstance) (e.g., changed garding appropriate affords teriaplayin sucha possibility onlya beginning.

References
as Deand Frequency W. (1985)."Ideals, Central of Instantiation Lawrence Barsalou, Tendency, - Learning, and Journal terminants ofGraded Structure," Memory, ofExperimental Psychology 11,629-657. Cognition Moshe and Boccara, Bruno.(1990). "DiscreteChoice Models withLatentChoice Ben-Akiva, MIT (May). ofCivilEngineering, MA: Department Sets," Working Paper.Cambridge, MA: MIT R. Lerman. ChoiceAnalysis. MosheandSteven (1985).Discrete Ben-Akiva, Cambridge, Press. MA: Choice. Reading, James. Bettman, (1979).An Information Theory of Consumer Processing Addison-Wesley. and Updating," Mukesh.(1990). "Choice Set Formation Paper. Edmonton, Working Bhargava, ofAlberta. AB: Faculty of Business, (May). University

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

196

A. D. SHOCKER, M. BEN-AKIVA,B. BOCCARA,AND P. NEDUNGADI

and ModificatheBehavioral Bases ofChoiceSet Formation Black,William. (1990). "Exploring LouisianaState tion/' Working Paper. BatonRouge,LA: Collegeof BusinessAdministration, University, (April). inDiscrete ChoiceSet Formation ChoiceModels.Cambridge, Boccara,Bruno.(1989).Modelling MA: Department ofCivilEngineering, MIT (Unpublished Ph.D. dissertation). and Albert R. Wildt. EvokedSet," Working Brown, Juanita, (1987). "FactorsInfluencing Paper 034-87. MO: CollegeofBusinessand PublicAdministration, of Missouri. Columbia, University A. Stewart. MarketStoreChoiceandChoiceSet Definition," (1988)."Consumer Fothenngham, ingScience7,299-310. and AronM. Levin. (1991). "Consumer Gaeth,GaryJ., IrwinP. Levin, GoutamChakraborty, Evaluation ofMulti-Product Bundles:An Information Letters Analysis," Marketing Integration 2, 1:47-57. Dennis.(1987)."A Two-Stage Science Attribute ChoiceModel,"Marketing Gensch, Disaggregate 6,223-231. the Accuracy, and Significance of Probabilistic Hauser,JohnR. (1978). "Testing Usefulness, ChoiceModels:An Information Theoretic Research 26, 406-421. Operations Approach," R. and StevenGaskin.(1984). "Application of the defender' Consumer Hauser,John Model," Science3, 327-351. Marketing R. and Birger Wernerfelt. Hauser,John Cost Model of Evoked Sets," (1990). "An Evaluation Journal Research16,393-408. ofConsumer A. and Jagdish N. Sheth.(1969). The Theory Behavior. New York:John Howard,John ofBuyer Wiley. Michael.(1984). "Consumer ChoiceStrategies AlternaforComparing Johnson, Noncomparable Research11, 741-753. tives,"Journal ofConsumer Hotaka.(1990). "Perceptual SciKatahira, Mapping UsingOrdered LogitAnalysis," Marketing ence 9,1-17. Gillesand Eric Lapersonne. Sets of Size One?" Working Laurent, (1990). "Consideration Paper. France:Ecole Des HautesEtudesCommerciales, HEC-ISA. (May). Centre Jouy-en-Josas, John G. Jr.,HowardMarmorstein, and MichaelF. Weigold. Sets Lynch, (1989). "Choices from Remembered Brands:Use of Recalled Attributes and PriorOverallEvaluations," Including Journal Research15, 169-184. ofConsumer Charles. ofRandom andDecision8, 229Manski, (1977)."The Structure Models,"Theory Utility 254. McFadden,Daniel L. (1984). "Econometric Analysisof Qualitative ResponseModels," In Zvi Griliches and M. D. Intriligator North Vol II. Amsterdam: (eds.) Handbookof Econometrics, Holland,1395-1457. ChemL. and RomJ. Markin. and Product Performance: Behavior Narayana, (1975). "Consumer An Alternative Journal 39, 1-6. Conceptualization," ofMarketing Prakash. and Use ofa Consideration Set: Implications (1987).Formation Nedungadi, forMarketChoice. Gainesville, FL: University of Florida(Unpublished ing and Researchon Consumer Ph.D. Dissertation). Prakash. ChoiceWithConsideration Sets: Influencing (1990a)."RecallandConsumer Nedungadi, outAltering BrandEvaluations," Journal Research17,245-253. ofConsumer Prakash.(1990b). "Consideration Sets: A Brief Reviewof Issues," Working Nedungadi, Paper. ON: Faculty ofManagement, ofToronto. Toronto, University (May). for Consideration Set Formation," Novak,ThomasP. (1990)."A Framework Paper.New Working York:Grad.SchoolofBusiness, Columbia University (April). A Top-Down or Bottom-Up Park,C. Whanand Daniel C. Smith. (1989). "Product-Level-Choice: Process?"Journal Research16,289-299. ofConsumer S. and AllanD. Shocker.(1991). "The Role of Usage Context in Product Ratneshwar, Category Journal Research28, 3. Structures," ofMarketing

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions

CONSUMER DECISION-MAKING AND CHOICE

197

H. andJames M. Lattin.(1990)."Development and Testing ofa Modelof ConsidJohn Roberts, eration Set Formation," Australian GradNSW, Australia: Paper 90-014. Kensington, Working uateSchoolofManagement. (April). Market J. and GlenL. Urban.(1978)."Pre-Test ofNew PackagedGoods: Evaluation Silk,Alvin A Modeland Measurement Journal Research15, 171-191. Methodology," ofMarketing Itamar. and Compromise Simonson, (1989). "Choice Based on Reasons:The Case of Attraction Journal Research16, 158-174. Effects," ofConsumer Mark.(1981). "On the Influence of Individuals on Situations," in N. Cantorand J. F. Snyder, Kihlstrom and Social Interaction. (eds.) Personality, Hillsdale,NJ:LawrenceErlCognition, 309-329. baum, MarkI. Alpert, and AllanD. Shocker. Srivastava, (1984). "A Customer-Oriented Rajendra, ApforDetermining Market Journal Structures," 48, 32-45. proach ofMarketing Robert Structure Srivastava, Leone, and AllanD. Shocker. (1981). "Market Rajendra, Analysis: Hierarchical ofProducts Based UponSubstitution inUse," Journal 45, Clustering ofMarketing 38-48. Peter R. (1980)."Captivity andChoiceinTravel Behavior JourModels,"Transportation Stopher, nal ofA.S.C.E. 106,427-435. inTransportation Joffre. ChoiceSet Formation DemandModels.CamSwait, (1984).Probabilistic MA: Department ofCivilEngineering, M.I.T. (Unpublished Ph.D. Dissertation). bridge, and Moshe Ben-Akiva. in Discrete RandomConstraints Swait,Joffre (1987). "Incorporating ModelsofChoiceSet Generation," Research B 21, 92-102. Transportation ina Theory Richard. ofConsumer Thaler, Choices,"Marketing (1985)."UsingMental Accounting Science4, 199-214. and JohnR. Hauser. (1984). "Testing Market Urban,Glen L., PhilipL. Johnson, Competitive Science3, 83-112. Structures," Marketing B. (1990). "Portfolio and Variety James Models,Issues, and QuesWiley, Seeking:Definitions, AB: SchoolofBusiness, ofAlberta. tions,"Working Paper.Edmonton, University H. and J. Ortuzar. of Theories and Misspecification of Dispersion Williams, (1982)."Behavioral Travel DemandModels,"Transportation B 16B, 167-219. Research Peter. ChoiceStrategies: Journal vs. Optimizing," (1975)."Consumer Wright, ofMarSimplifying Research12,60-67. keting Peterand Frederick Barbour.(1977). "Phased Decision Strategies: Wright, Sequels to Initial In Martin Starr andMilanZeleny DecisionMaking. North Criteria (eds.), Multiple Screening," in Management Holland TIMS Studies Science.Amsterdam: North 91-109. Holland,

This content downloaded on Mon, 17 Dec 2012 03:34:45 AM All use subject to JSTOR Terms and Conditions