The Influence of External Constraints on Brand Choice: The Lone-Alternative Effect

-Rashi Glazer, Barbara E. Kahn, William L. Moore

This case talks about how external constraints influence brand choice, how it affect choice even if they are consistent with the choice set's natural structure, the number of options offered in the set matters a product is generally at an advantage if it is offered as a part of two options rather than as the only available option, it also affect brand-choice probabilities asymmetrically depending on the relative preferences of the brands that are paired together. Asymmetric effect, ASYM defined as the average difference between the probability of choosing the item from the most beneficial external pairing for each brand and the probability of choosing the item in the least beneficial external pairing for each brand. The more similar those brands are to one another, the more difficult the decision process, and, therefore, the more likely the decision maker is to use an environmentally driven heuristic in making a choice. The external constraint that we put on the choice set divides the brands into a pair of options and a lone alternative. ASYM is used as a measure of advantageous pairings that compares a brand's being paired with one competitor in one constraint and that same brand's being paired with another competitor in the other constrain. The more similar those brands are to each other in the product class, the stronger the overall benefits of strategic comparisons will be, or the stronger the asymmetric effect will be. The advantage of strategic external constraints increases as the unconstrained preference of the stronger similar brand increases relative to that of the weaker similar brand. We developed two measures of product class similarity. The first measure was the percentage of people who thought that the three brands were best organized as a bush. Few more tests were carried out for the research. the incorporation of the asymmetric effect into the augmented PRETREE model did not reduce the RMSE. This suggests that for choice sets with three options the most important augmentation of PRETREE is that of the lone-alternative effect. The main purpose of this study was to examine further how extrinsic constraints affect choice when consumers use hierarchical choice processes, we found that the asymmetric and lone-alternative effects were stronger when all the items within the set were perceived to be more similar to each other.

-Ayush Nakipuria

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