Question

The information given below concerns how a market segment - "Cognitive Folks evaluates computers. This segment has rated each of the three computers - Sony, Del, Lenovo - based on their evaluation relative to the average in the market, where "5" is the average, 1-5 is below average, and 6-10 is above average Based on the compensatory decision model, which computer would someone belonging to the cognitive folks" segment choose? Weight Price Screen Size Processing Speed 0.4 0.1 0.3 0.2 Importance Weight Sony 108 -Lenovo loo

Answer 1

Solution

In compensatory decision model, the consumer assigns weights as per the relevance of the attribute of goods. The consumer gives points to each of the attribute of brand and then select that brand with the highest weighted score.

The weighted score can be calculated as:

Sony

10*0.4 + 8*0.1 + 6*0.3 + 8*0.2

= 4 +0.8 + 1.8 + 1.6

= 8.2

Dell

8*0.4 + 9*0.1 + 8*0.3 + 9*0.2

= 3.2 + 0.9 + 2.4 + 1.8

= 8.3

Lenovo

6*0.4 + 8*0.1 + 10*0.3 + 5*0.2

= 2.4 + 0.8 + 3 + 1

= 7.3

The weighted score of Dell is highest that is 8.3, therefore, someone belonging to cognitive folks would choose Dell brand.