CONSUMER DECISION

MAKING
INDIVIDUAL
BUYING DECISION PROCESS
INDIVIDUAL CUSTOMER DECISION MAKING

Problem Information Alternative Post

Recognition Search Evaluation Purchase Purchase
Behavior

In individual decision making unit as opposed to institutional – All the three

role (buyer, user, payer) can be carried out by the same person (or each
could be played by a different individual).
Traditional tendency when an individual is making the decision, is to look
only at performance related or social/psychological outcomes.
But in reality he will be confronted with the Buyer/Payer outcomes which
are convenience & service and economy & financing.
These outcomes will depend on individual or combination of roles that
people take.
INDIVIDUAL CUSTOMER DECISION MAKING

 Locational & Cost Factors Related To Decision Making

 Consumption can occur in three places –

 1. HOME
 2. WORK (ACTIVITY) PLACE
 3. PUBLIC PLACE

 For products/services consumed at home, decisions

are made well in advance. (one will search for discount shops)
 For consumption in work / organizational settings:
convenience takes priority over economy.
 Consumption in public place bring into prominence the
social value of the user. (Rolex, Ray Ban, Jaguar cars).
 CUSTOMER DECISION PROCESS

 Customer decisions which individuals make as

Buyers, Payers & Users.
 Whether to purchase?
 What to?
 Where ---? &
 When --?
 Customers have finite amount of money & time.
They must allocate them judiciously.
 Alternative demands on time and alternative need
for product category for allocation of money comes
in.
 1. Product/Service level choice –
Whether to buy?
 (& What to buy?)
 An important customer behavior at this stage is
mental budgeting.
 This budget set guides for consumer’s future
behavior.
 Concept of mental budgeting can help in
positioning, in deciding on to which category
your product should be kept
 Brand Level Choice:
 What to purchase?
 Select among the various alternatives
available – product/service categories,
brands, and then it moves on to
 Stores/ Suppliers Choice:
 Where to purchase?
 Timing of purchase :
 When to purchase?
 Frequency of Purchase (quantity)?
Different Types of Consumer
Purchase Decisions

Routinized Response Behaviour,

Limited Problem Solving &
Extensive Problem Solving
 INVOLVEMENT & TYPES OF DECISION
Nominal decision Making Limited Decision Making Extended Decision making

Problem Recognition Problem Recognition Problem Recognition

selective Generic Generic

Information search Information search

Information search Internal Internal
Limited Internal Limited External External

Alternative Evaluation Alternative Evaluation

Few attributes Many Attributes
Simple Decision Rules Complex Decision Rules
Few Alternatives Many Alternatives

Purchase Purchase Purchase

Post Purchase Post Purchase Post Purchase

No Dissonance Low Dissonance Dissonance
Nil evaluation Limited evaluation Complex Evaluation

Low Involvement Purchase Hi Involvement

 NOMINAL DECISION (HABITUAL/RRB)
 Problem is recognized ------ internal search (long term
memory) ------ provides single preferred solution Brand.
 Low involvement with purchase.
 An evaluation occurs only if it fails to perform as expected.
 Brand Loyal Purchases:
 At one point you would have been highly involved in selecting a brand of tooth
paste (EPS). Once decided you will continue to buy till you are challenged by a
superior product (ads etc) ------ back to EPS situation.
 A case of high product involvement but low purchase involvement.
 Low Involvement Purchases:
 Belief that all Tooth pastes are the same, can lead to low product & purchase
involvement, you may continue to buy (Colgate) it as you are satisfied with it.
 You will continue to buy till you are challenged with a superior offer (discount)
--------- LPS situation to make the decision.
 LIMITED DECISION MAKING (LPS)
 Involves internal and limited external
search
 Few alternatives

 Simple decision rules on a few attributes

and little post purchase evaluation.
 A store situation where you find the display of Kellogg's
and decides to buy Kellogg's without seeking
information beyond your memory ----
 (Kellogg's has iron in it) or “I have not had Kellogg's for
a long time”. You have not considered another
alternative other than the “do not buy” option.
 LPS also occurs in response to some
environmental or emotional needs
 (Decision to buy a new Mobile phone because you
are bored with the existing which is otherwise
satisfactory. You will evaluate the novelty factor
only).
 Taking a friend out for dinner - You will decide
on the restaurant or order beer or wine with
dinner based on who is with you for dinner.
 Very little post Purchase evaluation unless
there is a failure.
 EXTENDED DECISION MAKING (EPS)

 Involves an extensive internal and external

information search followed by ----
 Complex evaluation of multiple alternatives
and significant post-purchase evaluation.
 After the purchase, doubt about its
correctness is likely and a through
evaluation of the purchase take place.
 Hence marketers will have to take up post
purchase dissonance reducing efforts.
 E.P.S.
 Very few consumer decisions reach this
level of complexity. Products such as Homes,
Investments, Stereo, TV’s, Fridge Personal
Computers etc reach this level.
 There is high purchase involvement which is
due to the higher risk involved.
 Risk may/can be because of factors beyond
cost. Decisions which are heavily emotional also
lead to cognitive exercises (Baby Food, certain
drugs).
Purchase Decision
Stages
Problem Recognition
Information Search
Evaluation of Alternatives
Purchase planning & buying
Post Purchase Behaviour
 PROBLEM RECOGNITION
 The decision process starts with consumer
recognizing the need for solving the problem (the
office copier has run out of paper ----.)
 Customer problem
 Is any state of deprivation, discomfort or wanting
something (physical or psychological) felt by a
person.
 Problem Recognition
 Is a realization by the customer that he/she needs
to buy something to get back to normal state.
PROBLEM RECOGNITION

 Stimuli For Problem Recognition

 Problem recognition can occur in two
ways:
 Internal stimuli : perceived state of
discomfort (physical / psychological)
 External Stimuli : market place
information that lead the customer to
realize the problem (window display, Pizza
hut logo, ads.).
 PROBLEM RECOGNITION

 More apt terms can be Problem stimuli &

Solution stimuli.
 Problem Stimulus – Problem itself is the source
of information. Source can be within the
customer (hunger pangs) or outside (dirty
laundry).
 Solution Stimulus – information emanating
from the solution itself. Exposure to potential
solution leads to need arousal. (Strong aroma of
coffee, product or service sample
 Customers can expect to encounter solution
stimuli in three states of mind.
 1. Have already realized the problem and looking for a
solution
 (Heightened attention : Dandruff in hair - looking for a new shampoo).

 2. Problem had been recognized in the past but it was

not salient
 (Seeing a friend’s exercise equipment, one forms the desire for having
one - planned to buy, but never found time for visiting the dealer.)

 3. You never felt the need in the past, but exposure to

the solution product makes you realize that it will solve
a condition ‘now’ perceived as a problem.
(Power supply which was reliable has changed. To overcome
frequent failures which is a problem. Your friend has purchased an
inverter. This triggers the problem again).
 Marketing efforts are intended to generate both
primary and secondary demand.
 Primary Demand –
 Demand for the product or service category
itself
 Converting non buyers of product category into
buyers (Generic Demand).
 Secondary Demand –
 in contrast is to deflect demand from one brand
to another (selective demand).
 This is also called as selective demand.
 Does marketing create a need or
it just fulfils it?
 No one needed a VCR, Video camera or a
Rs.2000/- Nike Shoe, until advertising started
projecting them in an enticing way.
 Need ought to be defined in terms of the function
the product serves rather in terms of the product.
 Once needs are defined in terms of functional
benefits, then only products that satisfy the function
are successful in the market.
 VCR serves the function of time-shifted viewing – a
latent need .
 Life situations that cause inconvenience but have
no solutions are not viewed as problems but as
general life conditions.
 Only when a solution appears, these turn out to be
perceived as problems --Latent need.

 Latent need brings in the need for Pioneering or

Educational marketing.
 Pioneering marketing and communications promote a
new product / service by educating the consumer about
the product and how it can solve their unresolved
problems – generating primary demand.
 PROBLEM RECOGNITION – FOUR SITUATIONS
Nature of Demand
Known Latent

Expectancy Familiar Stock Depletion Concept Marketing

about the (Routine) (Planning)
problem
Life-stage Change New Innovation
Novel
(Emergency) (Evolving)

•Familiar problems generally occur due to what is generally called

stock depletion (feeling of thirst, squeezed out tooth paste tube)
•Novel problems arise generally due to events that move one from
one life cycle stage to another (new job, marriage, regional
relocation, birth of child or firms going public, change of ownership,
alliances and expansions etc)
•A latent problem is not immediately obvious and needs shaping
usually by an external stimuli which will trigger the need (Ads, Sales
person).
 Latent Problem Recognition
 Examples of latent problems are –
 Geographic Mapping for vehicles, Caller ID for telephones
etc.
 Availability of the caller ID service from the local phone co.
make the Novell-Latent need salient (recognized).
 The recognition of novel - latent problem is stimulated by
solution stimuli, generally in the form of new technologies
and new products and services.
 However the recognition of latent problems, whether familiar or new,
generally requires educational/concept level marketing. In case of latent
novel, concept level and product level impulses are required as product
is new.
doubt
INFORMATION SEARCH

Stage II of Consumer Decision

Making Process
 INFORMATION SEARCH
Total Set Awareness Set
(All the Brands aware of)

Evoked Inept Inert

Set Set set

Brands Brands Indifferent Overlooked

Recalled Dropped Brands Brands

Consideration Brands Not

Set Considered

•Evoked Set consists of brands/suppliers remembered at the

time of decision making.
•Consideration Set consists those from the evoked set after
those which are unfit are eliminated.
 INFORMATION SEARCH

Total Set Awareness Set

(All the Brands aware of)

Evoked set Inert Set Inept Set

(Brands Recalled) (Future choice) (Discarded)

Choice Brands Not

Set Considered

•Evoked Set consists of brands/suppliers remembered at the

time of decision making.
•Consideration Set consists those from the evoked set after
those which are unfit are eliminated.
INFORMATION SEARCH (1)

 Search never is for every brand available. Instead

information about the consideration set of brands.
 It should be minimum objective of all marketing
communications to place the brand in the
consideration set and not merely awareness or
evoked set.
 Three elements that characterize Info-Search Phase
 1. Sources of Information
 2. Search Strategies
 3. Amount of search
 Sources of information
 Marketer Sources:
 Advertising, sales persons, product service brochures,
store displays, company Web sites.
 Non Marketer Sources:
 Personal: Friends & other acquaintances, Past
Experience
 Independent Sources:
Public Information
 (Consumer reports, News report, Business bulletins,
Govt. publications, Census / Directory of
manufacturers)
 Product or Service Experts
 Auto critic, fashion/Art critic, Consultants, pharmacist,
Internet:
 Bulletin Boards, Consumer websites.
 INFORMATION SEARCH (2)

 Systematic Search Vs. Heuristic Search:

Systematic search
 consists of a comprehensive search and
evaluation of alternatives.
 Heuristics
 are quick rules of thumb (hunch)
 Basically heuristics are simple “if …then…”
propositions that connect an event, with an
appropriate action.
 If you are buying a pair of jeans, then buy Levis.
 Level of Information Search - Determinants
 Risk: (5 types of risks)
 Performance Risk: Not performing as well as the
alternatives.
 Social Risk: reference group may not like it (clothing,
membership)
 Psychological Risk: Product may not reflect oneself.
 Financial risk: Alternative may be overpriced at the point
where you checked or even being unaware of other cheaper
alternatives.
 Obsolescence Risk: Chances of newer substitutes will be
coming in pretty soon. (fashion, software/IT products).
 Financial risk is to the payer. Other risks are more pertinent
to the user
 Other aspects which determines the search activity
 1. Involvement:
 Two types of involvement
 Purchase decision involvement (EPS / LPS):
 Degree of concern and care brought to the buy. High
for most high ticket items.
 But price and involvement do not have one to one
correlation.
 Enduring Involvement: Ongoing involvement in
product/ service where involvement continue well after
purchase (cars, home theatre, single source supplier in
B-B).
 Familiarity & Expertise –
 Following cases its inversely related to search.
 Exceptions are when technology has changed
since last purchase.
 Aim is to build an assortment rather than
replace the older.
 Purchase is infrequent and long after previous
purchase.
 Experience with prior purchase is negative.
 Time Pressure
 Both husband and wife working
 Increased work pressure / working hours
 Customers being employed in more than one job
 Many taking on to part time education to enhance
skills
 New interest in leisure activities.
 Will lead to cutting short the search process,
shifting the buy decision and also looking for
more convenient outlets.
 Relative Uncertainty about Brands:
 Which brand is best among a set of brands &
uncertainty about what each brand offers.
 Such uncertainty leads to information search.
 Information Overload:
 Being exposed to too much information ----
difficult to make decisions.
 Evaluation of
Alternatives

Stage III of Consumer Decision

Making Process
 Types of Models For Alternate Evaluations

 1. Compensatory Model

 2. Non – Compensatory Models

 3. Combination Models
 The Compensatory Model:

 Method 1. (simple)
 Simply add the number of positive attributes and
subtract the number of negative attributes.
 Alternative with maximum positive value is selected.

 Method 2 (weighted)
 Crucial attributes are identified & weights are fixed
 Customer rates each attribute for considered brands
 Ratings are multiplied by weights
 Sum for each alternative is made.
 Evaluation Of Attributes
(Unlikely 1 2 3 4 5 Likely)

America Evaluation OF
Attribute AT&T Consequences
Online
1. Connection will be established 3 5 +3
successfully every time.
2. The connection will be 4 3 +2
established speedily
3. The connection can get 3 3 -3
disconnected in the middle of a
session
4. The price (monthly fee) will be 2 3 -1
high (Very Bad -3, -2 -1 0 +1 +2 +3 Very Good)

A aol = 3(3) + 2(4) + -3(3) + -1(2) = 6 / A at&t = 3(5) + 2(3) + -3(3) + -1(3) = 7
 The Compensatory Model:

 Customer arrives at a choice by considering

all the attributes and benefits of a product &

 Mentally trading off perceived weakness on

one or more attributes to the perceived
strength on one/more attributes.

 Compensatory because a shortfall on one

attribute can be compensated by good
rating on an other attribute.
 Non Compensatory Models

 1. Conjunctive model

 2. Disjunctive model

 3. Lexicographic decision model

 1. The Conjunctive Model: (cut off are
consider) I will but only 6 mega pic

 Customer begins by setting minimum cutoffs on

all salient attributes ---
 Only those that meet min. criteria on all
attributes is considered.
 If no alternatives are selected then the cutoffs
are altered.
 Car priced below Rs.3.0 Lacs, gets 20 kms/litre
mileage, reasonable reliability and repair record (Rs.
10,000 for 2 years) and average power and pick up
(ratings can be obtained from reports).
2. The Disjunctive Model: (least expectation
from many features mobile) I need least 2 mp
camera
Establishes minimum level of performance for only major
attributes. All brands which surpass at least one or two
of such attributes are considered.
 Say while purchasing of lap-top
 cut-off
 Price 5
 Weight 5
 Processor not critical
 After sales support not critical
 Battery life not critical
 Display quality 4
 The Disjunctive Model:
 Model considers the sheer presence of attributes
and not the degree or amount in which these
attributes are present. Trade off also possible.
Looking for a 4 bedroom flat or a 3 bedroom with
an office room.
 In compensatory model the attributes traded off
need not serve the same purpose but in disjunctive
model they tend to
 Mileage of a car can be compensated by superior
rating on an unrelated attribute in compensatory
model. But in disjunctive it can be traded off only for
another cost saving alternative.
 3. The Lexicographic Model:

 The most important attribute/ criterion is selected and

customers examine all alternatives against this
(ranking - selecting one with highest ranking).
 If more than one alternative remain, then the next most
important criteria is considered. The process continues
-----
 Business Traveler deciding on a Hotel ---
 1) Do not consider Hotels away from city center-
 2) Check availability of business services (second
 3) Select one with the lowest price. If there are two with same
rate then he picks up one more attribute which is at next level.
 Elimination-by-Aspects Decision Rule
 Requires consumer to rank the evaluative
criteria in terms of their importance and to
establish a cutoff point for each criterion.
 Rank Cut-off
 Price 1 3
 Weight 2 4
 Display quality 3 4
 Processor 4 3
 A. Sales Support 5 3
 Battery life 6 5
 Combination Decision Models

 1. Conjunctive Compensatory

 2. Conjunctive – Disjunctive

 3. Disjunctive - compensatory
 Affect Referral Decision Rule
 For many purchases decisions in long term
memory, the overall evaluations of the evoked
set.
 This makes assessment by individual attributes
unnecessary.
 Consumer selects the brand with overall
highest perceived rating.
 Such synthesized decision rule is called AFD
rule.
 Woodland shoes
 How and When The Models Are Used
 Processing By Brand or By Attribute
 Processing by brand –
 One brand or supplier at a time w. r. to all the
attributes (conjunctive model). This provides for
thorough evaluation.
 Processing by attribute – Lexicographic and EBA
use one attribute at a time for all the brands.
 When two brands are compared, one become
Focal Brand and the other Referent Brand - where
attention gets primarily on to focal.
 Comparative Features of various Choice Models
 Compensatory models- treatment is each attribute at a
time. A good choice can get eliminated for being
deficient marginally on first or second criteria while
being superior on many other attributes.
 Non Compensatory model can prevent such selection.
 Two stage Choice Process:
 Phased decision strategy
 Use non compensatory at first and then to further
identify the choice use compensatory.

 Satisficing: Customers do not always make optimal

choice & never very exhaustive and ends up with the
decisions based on one key attribute as in E.B.A. or
Lexicographic (Herbert Simon).
Purchase & Post-purchase
Stages

Purchase Action and Post

Purchase Experiences
Customer Buying Process
1

Problem
Recognition

2 3 4

Information Alternative Purchase

Search Evaluation Intent

5a 5b
Attitude Unanticipated
Of Situational
Others Factors
7

6 Post
Purchase
Purchase
Behavior
 PURCHASE ACTION

 Behavior can be broken into 3 sub steps

 1. Identifying the preferred alternative
 Concerns of the user most salient - User (whether his wants/need
will be satisfied. And so also his psychological and social needs)
Buyer (where to get it) and for Payer (is it affordable /right price).
 2. To form a purchase intent; determination to buy –
 The payers concern becomes salient.
 3. Implementing The Purchase:
 Entails arranging the transaction, change of title deed, making
payments etc. Buyers concerns gets prominence (convenience &
service).

 Delay in Implementation (more in this stage than others)

 Deviation From Identified Choice

Relationship Based Buying
 Relationship Based Buying
 Customers who engage in the practice of
relationship buying limit their choice to a single
supplier and depend on this supplier to handle
their needs for a product or service.

 Why do customers limit themselves …….

 Exercising choices can be wasteful – it costs
time, money and energy
Cost Benefit Factors
Search Costs
Risk Reduction
Switching costs
Value-added benefits
Relationship Supplier Loyalty
Based Buying Increased buying
Ready to pay more
Trust
Good WOM
Socio-Cultural Commitment Goodwill
Early-socialization
Reciprocity
Networks
Friendships

Antecedents
Relationships Outcomes
(Motivators)
 Customer Motivation for Relationship Based Buying
 Cost- Benefit factors:
 Potential costs and benefits which include
 Search costs
 Perceived risks (Performance risk, financial
risk and social risk)
 Switching costs
 Value added benefits (supplier starts treating
you as a preferred customer; frequent buyer
programs)
 Socio-Cultural Factors
 Early Socialization – relationship buying can
be cause by customer getting socialized into
it from the time they first use or buy it.
 Reciprocity: supplier in turn buys from you as
in B to B.
 Networks
 Buying based on friendship
Customer Loyalty
Brand Loyalty
&
Store Loyalty
 Brand Loyalty
Behavioral brand loyalty
Attitudinal brand loyalty
Brand equity

Customer Understanding
(User, Buyer Customer
Payer) Behaviour
Store Loyalty
A model of store loyalty
Store choice
Planned/impulse buying
One stop shopping
 Behavioral Brand Loyalty
 In Behavioral terms brand loyalty is simply a
customer’s consistent repurchase of a brand.
 Completely consistent repurchase of the same
brand (shampoo, wine, cologne, motor oil, pizza,
insurance) will show perfect behavioral loyalty.
 In reality it will be
 Proportion Of Purchase (percentage of purchase)
 Sequence of purchase (ABABABAB / AAABBAABBA)
 Probability of Purchase (based on long term buy
history)
 Attitudinal Brand Loyalty
 Behavioral brand loyalty just shows customer
repurchases the same brand.
 This can be because of convenience or out of
habit and may be without thinking much about it.
 Customers attitude towards the brand also has
to be considered to be favorable or not.
 Attitudinal loyalty has increasing steps or facets
such as friend, Advocate, commitment, brand
partner etc.
 A Model Of Customer’s Brand Loyalty

Market factors
Brand Parity Performance Fit
Competitive activities
Social Emotional
Customer Identification

Habit

Customer Factors
Variety seeking
Lack of involvement
Price sensitivity

Negative forces Positive forces

Toward Brand Disloyalty Toward Brand Loyalty
 Customer Loyalty to Stores

 Store loyalty is customer’s predominant

patronage of a store based on favorable attitude.

 This in turn means that the customer shops at

the particular shop for a certain merchandise and
has a favorable attitude towards this store than
other stores which has similar merchandise.
 Store Loyalty depends on two factors
 1) What factor & 2) How factor
 The What Factor
 What a customer looks for from the stores.
 Merchandise Quality: quality of products or
services that the store carry.
 Assortment: number of different items that the
store carry.
 Price Value: value-for-money, lower prices etc
 Store brands: availability of private labels /
brands
 The How Factor
 How favorable the shopping experience is.
 Ease of Merchandise Selection (layout / shelf
height)
 In-store Information & Assistance (easy or hassle
free return or exchange of bad items).
 Convenience (ease of reaching store, parking facility,
billing time, quick check outs)
 Problem / Complaint resolution
 Personalization (pleasant, courteous employee behavior
toward customer).
Store Selection and Purchase
 Customer’s store choice
Distance decision process
No Is the extra
Is the store
distance
nearest or on
negligible
regular route
No
yes Yes
Does the Are the Does
Do Not
shop
store offer prices store offer Here
better
good comparable discounts
prices No
Yes No
Does
store offer
Does store rare
merchand
No offer better Yes ise

No price deals

Yes Yes Yes

Use for filler Shop Occasional Infrequent

Divide here trip for special
&
regular major shopping
emergency shopping
most
shopping trips
trips only often
Evaluative criteria that consumers use
while making the purchase decision
Decision sequence Retailer Manufacturer
Image Advertising Distribution in key outlets
Outlet first, Margin on shelf displays POP, Shelf space &
brand second Location analysis position
Appropriate pricing programs to strengthen
existing outlets
Many or key brands More exclusive distributn
Brand first
Co-op Ads of Ads on brand availability
outlet second
brands Price specials on Brand image mgmt.
brands Directory / yellow
page listing under
brands
Margin training for sales Programs targeted at
Simultaneous personnel retail sales personnel
Multiple brand/key brands Distribution in key outlets
High service or low price Co-op advertising
structure
Attributes affecting retail outlet
selection
 Outlet Image

 Private / Store Brands

 Retail Advertising

 Outlet location and size

In store influence that affect
brand choices
 The nature of unplanned Purchases
 Reminder purchases and impulse purchases
 Point-of-purchase displays
 Price reduction and promotion deals
 Store atmosphere / ambience (Atmospherics)
 Stock outs
 Sales Personnel
Post Purchase Behavior
 POSTPURCHASE EXPERIENCES

 Experience of buying & using the product provides information

that the customer will use in future decision making.
 Decision Confirmation:
 Customer (EPS) will need to confirm the decision in terms of
wisdom.
 Cognitive dissonance as a result of comparing one’s out-come
with a different one if another alternative is chosen.
 Experience Evaluation:
 Knowledge about how product is actually consumed. Whether
consumers routinely use it or whether they consciously evaluate it
while using.
 Product in use Vs. Product in non-use (sparingly used).
 Products evaluated while in use (products which people are
enthusiastic about – wine, pickles, sports goods, cars).
 Satisfaction / Dissatisfaction
 Whether or not they actively evaluate–
users do experience usage outcome.
 To understand why customers feel that way

 Rate product on its attributes ---- total of all this provide

an indication of overall level satisfaction level.

 What causes satisfaction/dissatisfaction with each

attribute is not explained. Here we have to consider the
expected levels (absolute levels) and compare it with
actual.
 1994 American Customer satisfaction Index – covering 40
industries and four major sectors.
 Future Response:
 Satisfaction response:
 Repeat Purchase: Continue to buy but no loyalty.
 Loyalty: Consistent buying of brands. (merely due to
convenience/ routinization of purchase/ genuine
preference)
 Dissatisfaction responses (Exit or Voice)
 Exit: dissatisfied customers---back to the start of
decision process
 Voice: dissatisfied customers who complain--- but are
ready to give one more chance
Cognitive Dissonance
Cognitive Dissonance Theory

 Discomfort or dissonance occurs when a

consumer holds conflicting thoughts about a
belief or an attitude object.
 Vindhya has made down payment for a new
Chevy Aveo. She will feel cognitive
dissonance when she thinks about the
unique/positive qualities of Ford Fiesta, Opel
Vectra or Corolla.
Cognitive Dissonance Theory 2

 When cognitive dissonance occurs after a

purchase, its is – Post-purchase dissonance.
 The conflicting and dissonant information after
a purchase leaves consumers with uneasy
feeling about their prior beliefs or actions – a
feeling that they would seek to resolve.
 This induces customers to change their
attitudes so that they will be in line with their
purchase behavior.
Cognitive Dissonance Theory 3

 Relevance to marketing strategies –

 Premise that dissonance propels consumers to
reduce unpleasant feelings created by rival
thoughts.
 Tactics open to consumers
 Consumers can rationalize the decision as
being wise; seek out advertisements and try to
sell the positive features of the bike to their
friends.
Cognitive Dissonance Theory 4

 Consumer can rationalize the decision as

being wise, seek out Ads that support the
choice.
 Shishir has just bought a costly engagement ring in
response to the Ad – ”How can you make two
months salary last forever?”
 Ring costs a great deal of money; It lasts forever
because the future bride will cherish it for the rest of
her life.
Cognitive Dissonance Theory 5

 Besides consumer induced tactics

 Marketer can relieve consumer dissonance by
including Ad messages aimed at reinforcing &
complimenting their decisions
 By providing additional warranties and
guarantees, increasing effectiveness of their
services.
 Increase product use by providing user
friendly manuals.
Attribution Theories

Group of loosely interrelated social

psychological principles which attempts to
explain how people assign cause (blame or
credit) to events leading to their behavior.
“She persuaded me to buy that unknown
brand of camera”; “I donate to CRY because
it helps poor children”.
Attribution Theories 2

 Self Perception Theory

 Attitudes develop as consumers look at and make
judgments about their own behavior.
 Why do Nitin pick up an ‘Outlook’ each time you
travel by train – he will conclude that its because he
like Outlook.
 Internal & External Attributions: Shankar does the
corporate presentation well. Can attribute the success
to himself or MS package or just luck.
Attribution Theories 3

 Attribution Toward Others

 Why did you buy from a particular shop?
 If the sales persons motives are perceived to
be in consumers best interests, then the
consumer is likely to respond favorably.
 Otherwise the consumer will go elsewhere to
make the purchase.