Consideration Set Composition: an Empirical Study in Rural India

ABSTRACT - Understanding the composition of the consideration set provides an accurate representation of the market structure. Research studies continue to provide information about how consumers form consideration set. The paper studied the consideration set for pesticide purchases in India. The findings suggest that the consumers mentally represent products/ brands based on their (a) uniqueness and (b) appropriateness to the problem situation and this helps them retrieve products/ brands from the memory while forming consideration set. Implications for the marketers are discussed.

Citation:

Venugopal Pingali (2001) ,"Consideration Set Composition: an Empirical Study in Rural India", in AP - Asia Pacific Advances in Consumer Research Volume 4, eds. Paula M. Tidwell and Thomas E. Muller, Provo, UT : Association for Consumer Research, Pages: 92-96.

Asia Pacific Advances in Consumer Research Volume 4, 2001      Pages 92-96

CONSIDERATION SET COMPOSITION: AN EMPIRICAL STUDY IN RURAL INDIA

Venugopal Pingali, XLRI, India

[The author would like to express his gratitude to the reviewers for their valuable suggestions on the earlier draft.]

ABSTRACT -

Understanding the composition of the consideration set provides an accurate representation of the market structure. Research studies continue to provide information about how consumers form consideration set. The paper studied the consideration set for pesticide purchases in India. The findings suggest that the consumers mentally represent products/ brands based on their (a) uniqueness and (b) appropriateness to the problem situation and this helps them retrieve products/ brands from the memory while forming consideration set. Implications for the marketers are discussed.

Since the introduction of the concept by Howard and Sheth (1969), consideration set has proven valuable in understanding consumer response. Consideration set is defined as a set of bands, which the buyer actually considers while making a specific brand choice (Campbell 1973, Alba and Chattopadhyay 1985, and Hauser and Wernerfelt 1990). Understanding the consideration set would be of great value to marketers. Urban, Johnson and Hauser (1985) state that the information on the brands considered provides an accurate representation of the market structure. Consideration set, therefore, still remains an important area of consumer research (Roberts and Lattin, 1997). The primary orientation of this stream of research has been towards consideration set composition, measurement and theoretical formation process.

CONSIDERATION SET

Formation: Some have posited that consumers form consideration sets and make choices hierarchically (Hauser 1986, Howard 1977, Myers-Levy and Tybout 1989). According to Alba and Chattopadhyay (1985) consumers faced with large number of brands use a simple heuristic to screen brands to form the consideration set. Alba and Chattopadhyay (1985), Nedungadi (1990), Ratneshwar and Shocker (1991) state that the consumer would not be in a position to give careful consideration to all the brands available or even all the familiar ones, because the cognitive processing would not be possible. Instead the consumers are likely to engage in a two stage choice process whereby a small set of options are identified and the final choice is made after a more detailed consideration (Hauser and Wernerfelt 1990; Kardes et al. 1993). This is consistent with the consideration set size studies (Campbell 1973, Narayan and Markin 1976; Ratneshwar et al. 1996) and the behavioural science theories (Wright , 1975; Miller, 1956; Tversky and Kahneman, 1974).

Composition: Consideration sets are considered as a part of consumers’ problem solving routines. Consumers are likely to perceive alternatives satisfying the same need similarly. Psychology studies state that context specific relations between levels of goals and goal derived categories are stored in associate networks in memory.Activation of goals will result in retrieval of associated goal related categories (Barsalou 1991). Ratneshwar et al. (1996) drawing implications for consumer decision making suggest that even in stimulus based choice context consumers are likely to form consideration set perceived to satisfy the goal. Meyer (1979) suggest that brands have different relative utility on different purchase occasions and this could be reflected in the formation of the consideration set. Based on this theory this paper tested the brands in the consideration set for (a) uniqueness and (b) appropriateness

RESEARCH SETTING

The study was conducted on pesticide buying in India. This provided an excellent setting as:

$Pesticide buying in India provides several usage situations and several brands for each usage situation. (Different pests on different crops or the same pest at different stages of the crop form different usage situations).

$The market is also highly competitive and several options are available for each problem situation (Seetharaman 1992).

$Farmers are illiterate and have to form consideration set based on recall. So, describing the'usage situation’ could initiate the decision process.

DEVELOPMENT OF HYPOTHESIS

Uniqueness of brands: Over a period of time, buyers would develop sets of products for consideration based upon the perceived suitability of their functional attributes for the intended usage (Srivastava, et al., 1984). To the extent different usage contexts have distinctly different products judged as 'suitable’, the products/ brands evoked in those contexts should also be different (Ratneshwar and Shocker, 1991).

Hypothesis 1: A brand considered suitable for one usage context (problem situation) would not be considered for other usage situation.

Appropriateness of brands: The appropriateness of brands would be based on perceived utility of the brand for a given situation (adopted from Ratneshwar et al. 1996). Thus, for pesticide purchases the consideration set could contain brands as suggested in table 1.

The choice could be for mild brands when the degree of proneness is low and the treatment is a prophylactic application.The strength of the brands would increase as the proneness increases or treatment changes (as indicated by the arrows in table-1). When the damage is likely to be the maximum, that is, when degree of proneness is high and the treatment is for an high attack, one would expect 'very strong brands’ to be appropriate.

Hypothesis 2: Brands considered for a problem situation would contain brands having similar strength and the brand strength would depend on the problem situation.

METHODOLOGY

Overview: The study was conducted with actual agri-business users of pesticides. Given the nature of the respondent (as described in the 'Research Setting’) a recall rather than a recognition method was used. The usage situation was described to the respondent and they were asked "which products/ brands they would consider before making the final choice" (similar to Ratneshwar, et al. 1996, Ratneshwar and Shocker 1991, Campbell 1973).

Selection of usage situations: The study required selection of usage situations which could help test uniqueness and appropriateness by ensuring that the respondents are not constrained by the number of alternatives to choose from. The stimulus, control of cotton bollworm on cotton in Andhra Pradesh (a state in India), meeting the above requirements was selected. Cotton bollworm provided three usage situations (prophylactic, curative application for low attack and curative application for high attack). [The insect moults 5 times during its destructive phase. During the initial three moults the damage caused is less and this formed the curative (low attack) treatment. During the last two moults the damage is very severe and that formed the curative (high attack) treatment.] A pre-test had shown that this stimulus could be understood by the buyers. The availability of alternatives was established by (a) identifying the universe (b) checking if sufficient alternatives were marketed in the area of study and (c) cross verifying after data collection.

(a) Identifying the universe: 14 technical grade compounds are used for controlling this pest (Srivastavaand Patel 1990). As each technical is marketed by more than 10 companies with different brand names (Seetharaman 1992), there could be over 100 alternatives.

(b) Checking the market prior to the survey: The researcher visited few outlets in the study area and was convinced that there were sufficient numbers of alternatives available for the buyer during decision making.

(c) Cross verification after data collection: Subsequent to data collection the brands considered by the respondents were listed regionwise. This confirmed the minimum number of alternatives available in different regions (table 2).

All these together suggested that the number of alternatives was not a constraint during decision making.

TABLE 1

CHOICE OF BRAND-A LIKELY PATTERN

Sample: Data from a field survey of actual agri-business consumers was used. 266 respondents from three regions having different levels of problem proneness were selected using a multi-stage stratified sampling method. The number of respondents in each group was in proportion to the buyers in that group (Table 3).

Data Collection: Each respondent was administered three treatments (prophylactic application, curative application under low attack, and curative application under high attack). The respondents were given each treatment individually and asked to name all the brands they would consider buying for the given treatment (an approach followed by Campbell 1973, Ratneshwar and Shocker 1991).

RESEARCH FINDINGS

Uniqueness of brands forming buyers consideration sets: It was hypothesised (hypothesis 1) that the respondents would have different sets of brands 'relevant’ for different problem situations.

For this purpose the consideration sets for prophylactic application and curative application for low attack were chosen as both the applications were to be administered on a 30 day crop and therefore should have a high overlap if the hypothesis was wrong.

It was found that only some buyers from the low problem prone area had some overlap of brands between the problem situations (for example, 15 buyers considered brand 11 suitable for both prophylactic and curative application under low attack). The buyers from the medium and high problem prone areas considered different brands 'relevant’ for different applications. The proportion of uniqueness (at 5 % confidence level) was 95 per cent^. Ratneshwar and Shocker (1991) also found that different products are considered for different usage contexts.

Appropriateness of brand type for different problem situations: It was hypothesised that the brands forming the consideration set would have similar brand strength (hypothesis 2). For this purpose the consideration set of each individual under different problem situations was tested for consistency of the brand strength (table 4).

From the table it can be seen that 80-90% of the buyers have consideration sets having similar brand strength. For example, 83 per cent buyers have a consideration set with the same brand strength for prophylactic application. The findings suggest that the buyers form consideration sets with a single brand type for a problem situation.

TABLE 2

MINIMUM NUMBER OF ALTERNATIVES AVAILABLE IN DIFFERENT REGIONS

TABLE 3

DETAILS OF SAMPLE

TABLE 4

CHOICE OF BRAND ATTRIBUTE BY INDIVIDUALS UNDER DIFFERENT PROBLEM SITUATIONS (PERCENT RESPONDENTS)

The table, however, shows variation in what is considered appropriate for a given situation. For example, of the 80 per cent buyers having the same brand strength in their consideration set for curative application for low attack, 38 per cent consider mild brands appropriate, whereas 41 per cent consider strong brands appropriate.

To further understand the variation in the appropriateness, the brands considered for different problem situations in different areas were classified (table 5).

From the table it can be seen that the differences in the choice of mild and very strong brands was insignificant between areas but significant between treatments (problem situation). F value across areas, at 2,4 degrees of freedom, was 2.38 and 1.04 respectively and F value across treatments, at 2,4 degrees of freedom, was 19.45 and 99.85 respectively. This indicates that application of mild and very strong brands varies with the level of pest attack (problem situation) but does not vary across the areas. Based on this, it could be said that mild brands are generally considered appropriate for 'prophylactic treatment’ and very strong brands appropriate for curative applications for high pest attack.

The differences in the choice of strong brands were insignificant across treatments and across areas. Though, the differences across areas were not significant, the table suggests that the appropriateness of strong brands could be dependent on the degree of proneness. For example, while the buyers in the low problem prone area consider mild brands appropriate for curative applications for low attack, the choice in other areas was shifting towards a strong brand. 31 per cent of the buyers in the medium prone area and 65 per cent of the buyers in the high prone area consider strong brand appropriate for this stage of application.

That is, as the perceived damage increases the brand strength of the brands in the consideration set increases. The brands forming the consideration set are, therefore, decided based on their utility (goal).

The study therefore, suggests that the appropriateness of the brand type depends on the utility (goal) the brands are perceived to satisfy.

TABLE 5

CHOICE OF BRANDS UNDER DIFFERENT PROBLEM SITUATIONS (PERCENT BRANDS UNDER DIFFERENT BRAND TYPES)

CONCLUSION

The consideration set was found to contain brands, which are (a) unique and (b) appropriate to the problem situation. The research suggests that consumers may be mentally representing products/ brands based on their utility and this could help retrieve products/ brands from the memory while forming consideration set. For example consideration sets for toothpaste buying in India could be as shown in Table 6.

IMPLICATIONS FOR MARKETERS

In mature markets many different product sub categories evolve based on the utility (goals, needs) they satisfy. Consumers would therefore form consideration sets based on the needs the brand satisfies. The marketers should, therefore, promote consumer learning of the brand by labeling and positioning appropriately and differentiating them from other categories that serve different needs.

Products/ brands satisfying the similar need are those that the consumer considers as substitutes. There is, therefore, a need for outlets to display the products based on the needs satisfied rather than by products itself.

Comparative advertising has been on the rise. The study suggests that different segments consider different brands during purchase. An understanding of this would help marketers in planning comparative advertising.

 

IMPLICATION FOR RESEARCHERS

This study is important for two reasons.

1. The study addresses an area which "has not yet attracted the attention it deserves" (Roberts and Lattin 1997).

2. Earlier studies have shown conflicting results. While some have shown independence of brands in the consideration set (e.g. Hauser and Wernerfelt, 1989) others have found similar brands in the consideration set (Lattin and Roberts 1992). Roberts and Lattin (1997) therefore, state that "the empirical results raise an interesting question as to whether brands that are similar or dissimilar in perceptual space, at the same level of utility, are more likely to be included in the consideration set". This study supports the school, which states that similar brands would form the consideration set.

TABLE 6

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