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An executive summary for managers and executive readers can be found at the end of this article
Keywords Heuristics, Consumer marketing, Branding, Decision making, Sets, Managers
Abstract This study empirically investigates consumers' use of five heuristics (conjunctive, disjunctive, lexicographic, linear additive, and geometric compensatory) in the consideration set formation, a critical first phase before actual choice behavior. Data were collected on the selection of beer brands and fast food outlets by real consumers. Using a decomposition approach in determining the consumers' choice heuristics, it was found that the conjunctive heuristic is the most often used decision model in the consideration set formation for the two product classes. Implications for brand managers and future research directions are developed.
Introduction
Understanding how consumers make brand decisions is critical for brand managers, especially in conditions where there are many brands in the market competing for the same customers. An important axiom of consumer brand selection processes is that consumers have a limited information processing capacity (Miller, 1956). Therefore, faced with a large amount of brands, advertising and packaging information, in the store as well as on the Internet, consumers often have to devise means of simplifying their decision task (Shoker et al., 1991). One of the results of this simplification process has been the formulation of what Howard has referred to as a consideration set, i.e. the brands consumers consider acceptable for the next purchase (Howard, 1963, 1989). For brand managers, the issue of whether or not their brand is in the consideration sets of a large number of consumers is of paramount importance. In fact, to paraphrase a famous slogan, "membership has its own rewards," in that membership in the consideration set is related to success in the marketplace (Laroche and Toffoli, 1999).
Available evidence from previous research demonstrates that consideration sets exist and influence brand choice (Gruca, 1989; Shoker et al., 1991; Kardes et al., 1993). Two fundamental issues relative to the consideration set phenomenon can be identified as:
(1) Why do consumers move to simplify and limit the number of brands?
(2) How do consumers form their consideration sets?
The first question has been adequately addressed by researchers using the Miller (1956) and Wallace (1961) arguments that the consumer limits the number...