Consumer Heuristics: the Tradeoff Between Processing Effort and Value in Brand Choice

ABSTRACT - This paper proposes a conceptual framework for studying consumers' choice between national and private label brands. The purpose is to understand consumers' use of simplifying heuristics in making quality judgments between the two. The focus is on the apparent tradeoff being made by consumers between information processing effort minimization and value (objective quality/price) maximization. To lay the groundwork for future validation of the model, two scales are developed to measure consumers' convenience orientation and brand name-quality schematism. Correlational analysis of the data provides some tentative support for this conceptualization. Implications for brand equity are discussed and directions suggested for future research.


Carter A. Mandrik (1996) ,"Consumer Heuristics: the Tradeoff Between Processing Effort and Value in Brand Choice", in NA - Advances in Consumer Research Volume 23, eds. Kim P. Corfman and John G. Lynch Jr., Provo, UT : Association for Consumer Research, Pages: 301-307.

Advances in Consumer Research Volume 23, 1996      Pages 301-307


Carter A. Mandrik, Virginia Polytechnic Institute and State University


This paper proposes a conceptual framework for studying consumers' choice between national and private label brands. The purpose is to understand consumers' use of simplifying heuristics in making quality judgments between the two. The focus is on the apparent tradeoff being made by consumers between information processing effort minimization and value (objective quality/price) maximization. To lay the groundwork for future validation of the model, two scales are developed to measure consumers' convenience orientation and brand name-quality schematism. Correlational analysis of the data provides some tentative support for this conceptualization. Implications for brand equity are discussed and directions suggested for future research.


Consumer decision making has been studied with regard to processing ability, as a function of both individual differences and situational constraints (e.g., Capon and Kuhn 1982; Henry 1980; Jacoby, Speller, and Beming 1974; Park, Iyer, and Smith 1989) and motivation to expend processing effort and effort reduction strategies (e.g., Bettman, Johnson, and Payne 1991; Hoyer 1984; Hoyer and Brown 1990). A common thread running through these studies is that consumers must strike a balance between their desire for judgmental accuracy and their desire to minimize effort expenditure. One way to achieve this balance is for consumers to use cognitive heuristics (rules of inference) to simplify decision making, minimize effort and at the same time deliver an adequate level of confidence that the judgment is correct (Chaiken, Liberman, and Eagly 1989). This paper attempts to add insight into consumers' use of heuristics in quality judgments and how these relate to the processing goals of effort reduction and value maximization.

The focus here will be on quality judgments made between a manufacturer's (name) brand and a private label (store) brand for grocery products. This decision is an important one to study because of the recent brand equity losses suffered by brand marketers through competition from private labels (Hoch and Banerji 1993; Kim 1993). Furthermore, as prototypes, these two classes of brands have historically existed opposite each other on dimensions related to the quality judgment (e.g., price cues, amount of advertising, social status). Thus, in addition to making this a salient distinction for consumers, the contrast between them allows easier exposition of the conceptualization used here. I use as a conceptual framework Chaiken's (1980, 1987) Heuristic-Systematic model, an information processing model widely used in persuasion. The aim in this paper is to propose the model and develop scales for future use in model validation. The data provided in scale development are analyzed for an exploratory investigation of several hypothesized relationships between consumers' use of heuristics and motivation-related traits. Finally, implications for brand equity are discussed and further research avenues suggested.


The Heuristic-Systematic model (H-S) is conceptually similar to the Elaboration Likelihood Model of persuasion (ELM, Petty and Cacioppo 1986), which more marketing scholars may find familiar. Systematic and heuristic processing in the H-S are analogous to central and peripheral routes in the ELM. Systematic processing is prototypically viewed as a "comprehensive, analytic orientation in which perceivers access and scrutinize all informational input for its relevance and importance to their judgment task"; alternatively, individuals processing heuristically "focus on the subset of available information that enables them to use simple inferential rules, schemata, or cognitive heuristics to formulate their judgments and decisions" (Chaiken, Liberman and Eagly 1989, p.212-213). Systematic processing requires higher levels of cognitive effort and capacity than heuristic processing. Because people prefer less effortful to more effortful modes of information processing, individuals must be more highly motivated to process systematically. It is necessary to state a few assumptions and define terms before applying the model to the brand choice context.

Assumptions and Definitions

As used here, the model assumes that the products under consideration are identical in "objective" quality, differing only along extrinsic attributes (e.g., brand name, price, and packaging). Objective quality refers to the inherent technical superiority of a product based in its physical attributes, as opposed to "perceived" quality which is influenced by other, peripheral aspects, such as "image" (Zeithaml 1988).1 A second assumption is that consumers generally seek to maximize the value of their purchases. "Value" here refers to the ratio of objective quality to the price paid (Zeithaml 1988) [For discussions of the concept, see Zeithaml (1988) and Lichtenstein and Burton (1990).]. This definition of value, though restrictive, follows from the first assumption of identical objective quality, thus allowing hypothetical comparisons of consumers' ability to make quality judgments between product choices (similar to Pechmarim and Ratneshwar (1992)). It is central to the arguments made in this paper---especially those concerning brand equity: sometimes consumers take "the easy way out" and use a heuristic (which may or may not be reliable) to infer higher objective quality for name brand products than for private labels. Several conditions under which a consumer is most likely to do this are outlined below.

The inferential rules termed here "consumer heuristics" are somewhat different than the "choice heuristics" (e.g., "Elimination by Aspects" or "Equal Weight" heuristics) discussed in Bettman, Johnson, and Payne (1991), which are more procedural decision rules. These may require considerable cognitive effort and knowledge, especially if used to optimize the decision (Hoyer 1984). The consumer heuristics discussed here arc much simpler, similar to the "tactical" heuristics discussed by Hoyer (1984). They arc used to make quality judgments (central to value maximization) and depend on extrinsic attributes like brand name and price or other heuristic cues (e.g., promotion signals, amount and content of advertising), which are controlled by the marketer. Examples of these heuristics arc "high price implies high quality," "name brand products are higher quality," or "heavily advertised brands arc higher quality". The brand associations formed through advertising efforts may also serve as heuristic cues: "doctors recommend..." or "more hospitals use X brand..." invokes the "experts can be trusted" and "consensus implies correctness" heuristics, respectively, to connote high quality.

The H-S proposes three motivational concerns, or processing goals. The accuracy motivation, which reflects a desire to achieve informationally valid opinions or judgments, is assumed to be primary. When applied to the consumer context, the accuracy motivation translates to "value maximization". Acting under this motivational concern, the consumer's overriding goal is to get the highest product quality at the lowest price. As in the original H-S model, it is assumed here to be the primary motivation underlying braAdchoice. Impression motivation refers to "the desire to express attitudes that are socially acceptable" (Eagly and Chaiken 1993, p. 340). This motivation may be aroused when "the identities of significant audiences (real or imagined) are salient to the individual, when social relationships are important, or when people must communicate their attitudes to potential evaluators" (Chaiken, Liberman, and Eagly 1989, p. 236). Defense motivation refers to the individuals desire to defend particular attitudes. In the consumption setting this would be roughly analogous to brand loyalty. Individuals who process within the defense motivation are more closed minded, selective, and biased in their information processing, attending to information that supports their opinions and ignoring (or derogating) that which does not (Eagly and Chaiken 1993). Systematic processing of attribute information is curtailed, and the consumer is likely to employ one of the simplest effort- and risk reducing rules: the habitual heuristic, "choose what one chose last time" (Bettman, Payne, and Johnson 1994).



Several factors associated with each motivational concern and the processing mode used to reach quality judgments are listed in Table 1. Some traits predisposing consumers to be motivated to impress others through the brands they choose are the traits self-monitoring (Becherer and Richard 1978; Snyder 1987), consumer susceptibility to interpersonal influence (Bearden, Netemeyer, and Teel 1989), attention to social comparison information (Bearden and Rose 1990) and prestige sensitivity (Lichtenstein, Ridgway, and Netemeyer 1993). Situational factors would be social importance (Leary and Kowalski 1990) [In a recent integrative review of the impression management (a.k.a., self-presentation) literature by Leary and Kowalski (1990), the authors present a model in which they describe three antecedents to impression motivation. The scope of this paper prohibits detailed presentation of these factors to the summary concept of "social importance".] and whether or not it is a publicly consumed product (Bearden and Etzel 1982). Traits related to the defense motivation might be dogmatism (Rokeach 1960) and innovativeness (Leavitt and Walton 1975), while a situational factor would be high perceived switching costs (Kerin, Varadarajan, and Peterson (1992) (see Table 1). Because the present interest is in understanding how processing differences (systematic versus heuristic) interact with the value maximizing motive, further discussion focuses on the accuracy motivation.

Accuracy Motivation

Consumers must be motivated and able to process systematically. Processing systematically they would, for example, use unit pricing information, read labels, compare intrinsic attributes between brands, and make trial purchases. To the extent that systematic processing yields accurate judgments, a consumer so doing would choose the private label because it offers the same quality at a lower price. Consumers not sufficiently motivated or able to process systematically may process the judgment using heuristics. They would then focus on available heuristic cues (e.g., extrinsic attributes or advertising cues) and make an inference of higher quality for the name brand product. Consumers that employ these heuristics are more likely to choose the national brand.

Influences on Motivation to Process Systematically

Several factors contribute to the level of motivation experienced in each purchase situation (see Table 1). The consumer trait, value consciousness, the "concern for price paid relative to quality received" (Lichtenstein, Netermeyer, and Burton 1990), should increase the individual's motivation to process systematically in order to obtain the best value. Monroe and Mazumdar (1988) suggest another trait related to motivation when they note that "shoppers who are not price-conscious are presumed to be convenience-oriented" (p. 371). Convenience orientation is defined here as the tendency to prefer comfort and case in shopping behavior and a willingness to pay higher prices for it. It represents a general motivational deficit in the consumption setting and should therefore decrease systematic processing of quality judgments. Need for cognition (NFC, Cacioppo and Petty 1982) is related to the motivation to obtain judgmental confidence through systematic processing. Low NFC individuals may employ heuristics chronically (Eagly, Liberman, and Chaiken 1989) and make more incorrect inferences based on extrinsic cues like promotion signals that do not signify a real reduction in price (Inman, McAlister, and Hoyer 1990). Low income or high budget constraints should increase consumers' motivation to devote processing effort to judgments that affect value maximization.

Strength of heuristics. If a heuristic is perceived to be reliable (i.e., lead to valid judgments), it may be employed more often because the individual is able to attain a sufficient level of confidence while reducing effort (Chaiken, Eagly, and Liberman 1989). This aspect is known as the "strength" of a heuristic, and individual differences exist for particular ones. Price-quality schema refers to a consumer's "generalized belief across product categories that the level of the price cue is related positively to the quality level of the product" (Lichtenstein, Ridgway, and Netemeyer 1993). This trait reflects the strength of the heuristic "price reflects quality". High P-Q schematics should process quality judgments using this heuristic, and therefore be more likely to choose the higher priced name brand. A related concept is what I term here brand-quality schematism [The construct is named "price-quality schema" in Lichtenstein, Ridgway, and Netemeyer(1993), but for grammatical consistency I use "schematism" to refer to the schema-related constructs.], the generalized belief that the brand name cue (national brand or private label) is a useful indicator of product quality in decisions between manufacturer and private label grocery products. It reflects the strength and chronicity of use of the "name brands are high quality" heuristic.

Constraints on Ability to Process Systematically

Consumers motivated to process quality judgments systematically may at times lack the ability. Systematic processing "is adversely affected by situational variables and individual differences that constrain people's capacities for in-depth information processing (e.g., time pressures, lack of domain-specific expertise" (Chaiken, Liberman, and Eagly 1989, p.212). Constraints on systematic processing in the consumer setting are listed in Table 1.

Two individual constraints on systematic processing would be low product-related knowledge (Park and Lessig 1981; Rao and Monroe 1988) and low processing ability (Capon and Kuhn 1982; Henry 1980). If consumers have low product knowledge, it is more difficult for them to process attribute information systematically. They are more likely than experts to rely on some heuristic cue (e.g., a non-diagnostic extrinsic attribute) to make quality inferences (Rao and Monroe 1988). For inexperienced consumers presented with a brand-selection task, the brand awareness heuristic ("buy the best known brand") served as the dominant choice rule (Hoyer and Brown 1990). Several situational constraints are identified. Time pressures limit ability to process systematically (Park, Nyer, and Smith 1981). The availability1 diagnosticity of product information is important, because if information is unavailable or nondiagnostic before the decision is made the consumer must rely on whatever cues are available (e.g., heavy advertising (Kirmani 1990)) to make judgments. Supporting this is the finding that the "price-quality" relationship is stronger the less information is available (Lichtenstein and Burton 1989; Rao and Monroe 1989; Zeithaml 1988).


Of the factors identified that may affect consumers' use of heuristics, I now explore the relationship among four traits. Two of them, value consciousness and convenience orientation, are directly related to motivation in a consumption setting. The other two, price-quality schematism and brand name-quality schematism, are related to the strength or chronic accessibility of consumer heuristics. Although convenience orientation does not directly implicate product quality judgments, it should be positively related to use of consumer heuristics because of the underlying motivational deficit. Value consciousness reflects high motivation to obtain value, and thus should be negatively related to use of consumer heuristics to reach quality judgments.

Research Hypotheses

Consumers high in value consciousness should have higher motivation to process quality judgments systematically, reducing the tendency to simply rely on the brand name and price as a heuristic to infer quality. Therefore,

H1a: Value Consciousness is negatively related to brand name-quality schematism.

H1b: Value consciousness is negatively related to price quality schematism.

Highly convenience-oriented consumers should be more likely to reduce effort by relying on heuristics to infer quality. This suggests the following relationships:

H2a: Convenience orientation is positively related to brand name-quality schematism.

H2b: Convenience orientation is positively related to price quality schematism.

Chronic use of heuristics in general may reflect underlying individual differences in processing orientations (Chaiken, Liberman, and Eagly 1989). Additionally, consumers who are highly P-Q schematic should be more likely to associate high quality with the more expensive name brands. Therefore the two heuristic trait measures should be related:

H3: Price-quality schematism is Positively related to brand name-quality schematism.


Scales for value consciousness (VC) and price-quality schemiatism (P-Q) were available (Lichtenstein, Ridgway, and Netemeyer 1993). The scales for convenience orientation (CO) and brand name-quality schematism (BN-Q) were developed here.

Scale Development. Two focus groups (n=8, 12) were conducted to explore the meaning of convenience when shopping and of reliance on brand name in product choice. From these discussions and consultation with professional colleagues, conceptual definitions of CO and of BN-Q were composed (see Conceptual Development above). Next, a pool of approximately 30 items was generated based on these definitions. To help establish face validity, this set of items was judged for consistency with each conceptual definition by a marketing faculty member and two marketing PhD students, which resulted in the addition and rewording of several items, and the deletion of several judged to be inadequate. Seven items for the CO scale and 12 for the BN-Q scale were retained. These items were interspersed with items from the value consciousness and price-quality schematism scales (Lichtenstein, Ridgway, and Netemeyer 1993) and responses were obtained from a convenience sample of 83 undergraduate business students at a large Southeastern university.

Exploratory factor analysis and internal consistency reliability analysis in the statistical package SPSS were used to select indicators for each scale. Maximum likelihood was used to extract the factors. In line with the expectation of measuring four distinct constructs, a clear four-factor structure emerged (based on eigen values greater than one). An oblique rotation (p=.5) was used to extract the maximum amount of variance, because it was assumed a priori that the factors would be correlated [Structure and pattern matrices, communality estimates, and correlations among the reference axes are available from the author upon request.]. For the CO and BNQ scales, only items that loaded on the factor above .4 and did not have high cross-loadings were retained for the internal consistency reliability analysis (Saxe and Wietz 1982), leaving five and nine items for each scale, respectively. Reliability analysis resulted in the deletion of one item from the BN-Q scale. Coefficient alphas were.84 for the five-item CO scale and.88 for the eight-item BNQ scale. Scales appear in the Appendix.



Hypothesis testing. After finding that the scales displayed adequate unidimensionality and internal consistency, correlation analysis was used to test the hypotheses. The following results were obtained.


Correlation Analysis. Table 2 lists the results of the correlation analysis. All correlations are in the predicted directions, and all but one (between price-quality schema and value consciousness) are significant at p<001. Thus, all hypotheses were supported, except H1b which received only directional support (see Table 2).


Research Implications

Before proceeding it is necessary to state the limitations of the study. First, the correlation analysis is seriously limited by using the same sample to develop the scales and test the hypothesized relationships. Also, the sample used is one of convenience, constraining any attempts to generalize. Another issue is that the correlations may be attributable to shared method variance, as well as "self-generated validity" (Feldman and Lynch 1988). It would therefore be unwise to draw strong conclusions based on this exploratory investigation. With these caveats in mind, it is interesting to note the strong correlations between the variables, indicating some degree of association between the two motivational traits and the use of the two consumer heuristics. Thus there is tentative support that the consumer heuristics represented by price-quality schema and brand name-quality schema may be more likely to be used by consumers who are not motivated to make systematic comparisons(i.e., they are not highly value conscious), or who prefer convenience when shopping. The model's ability to integrate prior research coupled with the mild support offered here suggests its usefulness as a framework for studying consumer choice behavior.

In the work of Lichtenstein, Netemeyer, and Burton (1990), value consciousness is established as a trait and contrasted against coupon proneness in its effect on shopping behavioral variables (e.g., coupon use, Consumer Reports use, price knowledge) or other consumer orientations (e.g., involvement, shopping competitiveness). However, as a motivation, it has not been well defined in terms of possible antecedent factors. The theoretical framework used here suggests several factors, for example income or budget constraints, and need for cognition. ne level of disposable income should affect both a consumer's value consciousness and convenience orientation. Peripheral support for this comes from the finding that consumers switch from national brands to private labels in worse economics (Hoch and Banerji 1993). NFC reflects a motivation to devote effort to processing, and should therefore be associated with both value consciousness and with convenience orientation. Applied to the consumption setting, the model seems useful for explicating these relationships and others that are involved in quality judgments and brand choice.

Market Implications

In order to maximize value (as price/objective quality) consumers must be able to make accurate judgments of quality for between-brand value comparisons. Because judgments based on heuristics may be less accurate or prone to bias (Tversky and Kahneman 1974), their use may compromise the consumer's goal of value maximization. Furthermore, the reliability of the heuristics studied here may be considerably lower than in years past as private label products continue to narrow the quality gap (Hoch and Banerji 1993). Of course, we can easily expand the concept of value to include not only the time and effort savings associated with relying on consumer heuristics in brand choice, but the symbolic value of the brand name to the consumer. Then the tradeoff between processing effort and judgmental accuracy would seem to be a moot point. However, while this broader concept of value is relevant, it does not render irrelevant the more restricted one when we take into account the consumer's goals for the purchase situation. For the consumer whose goal is to obtain the highest objective quality at the lowest price (value maximization as used here), the other aspects of value associated with the brand name or price may be unimportant. In this circumstance, whether the consumer believes the extrinsic cue to be diagnostic of product quality becomes a relevant question.



Implicit in this framework is the concept of brand equity. Definitions of brand equity view it as a financial asset measured in increased market share or profit margins or, from the consumer's perspective as a set of favorable associations, both of which are attributable to the brand name's influence on consumers (Aaker 1991; Farquhar 1992; Keller 1993; Srivastava and Shocker 1991). The framework outlined factors that affect consumers reliance on heuristics associated with extrinsic cues like brand name or price. If brand choice depends in part on their use (which reflects processing motivations), then so does brand equity as market share and profit margins (i.e., price premiums). And because novice consumers rely on (non-diagnostic) extrinsic cues to determine a products' quality (Rao and Monroe 1988), it can be said that at least a little brand equity capitalizes on their lack of ability. Additionally, advertising can influence consumer--especially novices--to make inaccurate assessments of product attributes; these "favorably biased attribute perceptions" are acknowledged as one source of brand equity (Park and Srinivasan 1994). Lichtenstein and Burton (1989) note that "the mere marketplace survival of brands that offer poor quality in relation to their price suggests that consumers are far from perfect in their assessment of price-quality comparisons" (p. 431). This is not to suggest that name brands are not high quality, simply that some consumers may falsely infer they are higher quality than a private label, and that this false inference may contribute to brand equity for the national brand. Consumer heuristics at present favor the brand equity of national brands, but marketers of brands that do not offer noticeable quality differences may be in trouble the more value conscious people become. Private labels should thus encourage systematic comparisons between their products that offer similar quality to the name brands.

Future research

Several other lines of research are suggested by this conceptual framework. One proposition worth exploring is: the less motivated or the less able a consumer is to process systematically, the more potential there exists for brand equity of the national brand versus a private label. Throughout the conceptual development of this paper I have discussed trait factors and situational factors. The importance of situational influences on consumer behavior has been recognized (e.g., Belk 1975), but an explicit "trait-versus situation" approach (Monson, Hesley, and Chernick 1982) would be useful for exploring the antecedents to each motivation. Causal models that link traits to other variables like income or need for cognition are called for. General attitudes toward private labels, like perceived status and quality compared to name brands, may differ with time or region, which suggests the need for replication of earlier studies on this topic (e.g., Myers 1967). A review of methods for studying consumer decision making can be found in Bettman, Johnson, and Payne (1991).


The purpose of this paper was to propose a model of consumer choice that shed light on consumers' use of heuristics to simplify the decision process between national and private label brands. This conceptualization suggests that there is a tradeoff between effort minimization and value maximization, i f we restrict the meaning of value to the ratio of objective quality to price. It can be argued that a national brand's equity may be maximal for product purchase situations in which consumers are unmotivated or compromised in their ability to accurately determine product quality-and hence, assess value. Consumers may use heuristic cues like price and brand name to infer higher quality for the national brand, when in fact it may be the same as the private label. This is especially true for consumers who lack knowledge and/or processing ability. While the research reported is only in an exploratory stage, the results obtained beckon further efforts.


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Carter A. Mandrik, Virginia Polytechnic Institute and State University


NA - Advances in Consumer Research Volume 23 | 1996

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