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Decision and Purchase:Consumer Decision Rules, Output, Relationship Marketing

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Consumer Psychology (PSY - 514)
VU
Lecture 38
Decision and Purchase
Understanding:
 Consumer Decision Rules
o  Compensatory Decision Rules
o  Non-Compensatory Decision Rules
Conjunctive Decision Rules
Disjunctive Decision Rules
Lexicographic Decision Rules
 Output
o  Purchase Behavior
o  Post Purchase Evaluation
Beyond the Decision ­ Consuming and Possession
Relationship Marketing
1. Consumer Decision Rules
Consumer decision rules are the procedures used by consumers to facilitate brand (or other consumption related)
choices. These rules reduce the burden of making complex decisions by providing guidelines or routines that make
the process less taxing.
Two Categories of Consumer Decision Rules are:
1. Compensatory Rules
A consumer determines a brand or model options in terms of each relevant attribute and computes a weighted or
summated score for each brand. The assumption is that consumer will select the brand that scores the highest
among the alternatives evaluated. Compensatory decision allows a positive evaluation of a brand on one attribute
to balance out a negative evaluation on some other attribute.
2. Non-Compensatory Rules
Non Compensatory Decision Rule does not allow consumers to balance positive evaluation of brand on one
alternative with a negative evaluation of brand on another alternative.
Types of Non-Compensatory Rules
There are three types of Compensatory Rules
a.
Conjunctive Decision Making Rules
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Consumer Psychology (PSY - 514)
VU
b. Disjunctive Decision Making Rules
c.
Lexicographic Decision Making Rules
a.
Conjunctive Decision Making Rule
The consumer establishes a separate minimally acceptable level as cut off point for each attribute. If any particular
brand or model falls below that cut off point on any one of the attributes the option is eliminated from further
consideration. Conjunctive Decision rule can result in several acceptable alternatives. It becomes necessary for
consumers in such cases to apply some additional decision rule to arrive at a final conclusion. To select the first
satisfactory brand conjunctive rule is particularly useful in reducing the choices, after that consumers may apply
another refined decision rule.
b.
Disjunctive Decision Rule
Disjunctive Rule is the mirror image of the conjunctive rule. In applying the disjunctive rule the consumer
establishes a separate minimally acceptable cut off level for each attribute. This will further minimize the choices
though still the choices will be more than one. Here the consumer may accept the first satisfactory alternative as
the final choice or may apply another rule that may be more suitable.
c.
Lexicographic Decision Rule
The consumer first ranks the attributes in terms of perceived relevance or importance. The consumer then
compares the various alternatives in terms of single attributes in terms of a single attribute that is the most
important. If one option scores sufficiently higher on this top-ranked attribute it is selected and the process ends.
When two or more options ranks sufficiently higher then the process is repeated on the second highest ranking
attribute until the process ends.
Implications for Marketers
With the lexicographic rule, the highest ranked attribute (the one applied first) may reveal something about the
individual's basic consumer orientation. Buy the best rule might indicate that consumer is quality oriented, status oriented,
or economy minded.
Consumers' Shopping Strategy
According to shopping strategies consumers can be divided into following categories:
 Practical Loyalists ­ those who look for ways to save on the brands and products they would buy anyway.
 Bottom-line Price Shoppers- those who buy the lowest priced item with little or no regard for the brand
 Opportunistic switchers- those who would use coupons or sales to decide among the brands that fall within
their evoked set
 Deal Hunters- those who look for the best bargain and are not brand loyal
2. Output
Output portion of consumer decision making model concerns two kinds of closely associated post decision
activities:
1. Purchase Behavior
2. Post Purchase Evaluation
1. Purchase Behavior
In studying the consumers' purchase behavior, it is important to understand what types of purchases consumers
make.
Types of Purchases
Consumers make three types of purchases:
a) Trial Purchase
b) Repeat Purchase
c) Long Term Commitment Purchase
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Consumer Psychology (PSY - 514)
VU
a) Trial Purchase
When a consumer purchases a product (or brand) for the first time and buys a smaller quantity than usual this
purchase would be considered a trial. Trial is the exploratory phase of purchase behavior in which consumers
attempt to evaluate the product through direct use. For example when consumers purchase a new brand of
laundry detergent about which they may be uncertain they are likely to purchase smaller trial quantities than if it
were a familiar brand. Consumers may also be encouraged to try new product through such tactics as free
coupons, samples and or sale price
b) Repeat Purchase
When a new brand in an established product category (toothpaste, detergent powder, cola drinks) is found by trial
and found to be better than other brands, consumers are likely to repeat the purchase. Repeat Purchase is closely
associated with the concept of Brand Loyalty
Most firms try to encourage brand loyalty because it contributes to greater stability in the market. Unlike trial in
which consumer uses the product on a small scale and without any commitment, repeat purchase usually signifies
that the product meets with the consumer's approval and that s/he is willing to use the product again and in larger
quantities
Trial of course is not always feasible especially in case of durable goods. If consumers are purchasing refrigerators,
electrical ranges, washing machines. Along with the selling of durable goods comes the concept of Display
Centers.
Consumers can go to the cars display centers where they may sit in the car see every thing and may have a test
drive also. This is to furnish their trial of the product. With the advent of the internet display centers are now also
virtual (homes).
c) Long-Term Commitment Purchase
2. Post Purchase Evaluation
As consumers use a product during the trial purchase, they evaluate its performance in the light of their own
expectations.
There may be three possible outcomes of the trial purchase:
Actual performance matches the expectations, leading to a neutral feeling
Performance exceeds expectation, causing what is known as positive disconfirmation of expectations (which
leads to satisfaction)
Performance is below expectations causing what is negative disconfirmation of expectations (which leads to
dissatisfaction)
Important component of post purchase evaluation is the reduction of uncertainty; consumers might have had
about the selection. As part of their post purchase analysis consumers try to re-assure themselves that their choice
was a wise one.
In order to rationalize their decision they may:
Seek advertisements that support their choice and avoid the ads of competitive brands
They may attempt to persuade friends, relatives to buy the same brand
They may turn to other satisfied owners
The degree of post purchase analysis depends upon:
The importance of product decision
Experience acquired in using the product
It would be logical to assume that customer satisfaction is related to customer retention. The findings however,
show that retention may be more a matter of the brand's reputation ­ especially for products consumers find
difficult to evaluate.
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Consumer Psychology (PSY - 514)
VU
Beyond the Decision ­ Consuming and Possessing
Historically the emphasis of Consumer Behavior has been on product, service and brand choice decisions.
Possessing, collecting and consuming things is another facet of Consumer Behavior. Consumer choices are the
beginning of Consumption process not merely the end of consumer decision making process. Some possessions
serve to assist consumer in their effort to create "personal meaning" and to maintain a sense of past.
Relationship Marketing
Relationship Marketing (Loyalty Programs) are used to foster usage loyalty and commitment to loyalty to
company's products and services. A real relationship marketing program is more than the use of database
marketing tactics to better target the customers. The consumer must feel that he or she has received something for
being a participant in the relationship.
Relationship Marketing programs have been used in a wide variety of products and service categories (retail credit
facility). Many companies call their programs a club, and some even charge a program fee. Membership in a club
may serve as means to convey to customers the notion of permanence and exclusivity inherent in committed
relationship.
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Table of Contents:
  1. INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer Behavior
  2. INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer research
  3. INTRODUCTION TO CONSUMER PSYCHOLOGY:Marketing Mix, Product, Price
  4. INTRODUCTION TO CONSUMER PSYCHOLOGY:Customer Value, Perceived Value
  5. VALUE AND RETENTION FOCUSED MARKETING AND CONSUMER DECISION MAKING PROCESS
  6. CONSUMER RESEARCH:Quantitative Research, Qualitative Research
  7. MAJOR STEPS IN CONSUMER RESEARCH PROCESS:Design of Primary research
  8. QUANTITATIVE RESEARCH DESIGNS & DATA COLLECTION METHODS
  9. QUANTITATIVE RESEARCH DATA COLLECTION TECHNIQUES:ATTITUDE SCALES
  10. QUALITATIVE RESEARCH DESIGNS & DATA COLLECTION METHODS
  11. CUSTOMER SATISFACTION MEASUREMENT, SAMPLING, AND DATA ANALYSIS AND REPORTING
  12. MARKET SEGMENTATION AND ITS BASES:Geographical Segmentation
  13. BASES FOR SEGMENTATION: DEMOGRAPHIC SEGMENTATION PSYCHOGRAPHIC SEGMENTATION
  14. BASES FOR SEGMENTATION: SOCIOCULTURAL SEGMENTATION USE RELATED SEGMENTATION USAGE SITUATION SEGMENTATION
  15. BASES FOR SEGMENTATION: BENEFIT SEGMENTATION:Intrinsic Cues
  16. BASES FOR SEGMENTATION: HYBRID SEGMENTATION STRATEGIES
  17. MARKET SEGMENTATION IMPLEMENTING SEGMENTATION STRATEGIES ENVIRONMENTAL INFLUENCES CULTURE
  18. HOW CULTURE IS LEARNT ENVIRONMENTAL INFLUENCES:Formal Learning
  19. CULTURE AND ITS MEASUREMENT ENVIRONMENTAL INFLUENCES
  20. MEASUREMENT OF CULTURE ENVIRONMENTAL INFLUENCES:Consumer Fieldwork
  21. SUBCULTURE CHAPTER 4: ENVIRONMENTAL INFLUENCES
  22. AGE AND GENDER SUBCULTURE CHAPTER 4: ENVIRONMENTAL INFLUENCES
  23. BASES FOR SEGMENTATION: BENEFIT SEGMENTATION:Market Segmentation
  24. SOCIAL CLASS CHAPTER 4: ENVIRONMENTAL INFLUENCES:Occupation
  25. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Affluent Consumer
  26. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Membership Group
  27. CONSUMER SOCIAL CLASSES CHAPTER 4: ENVIRONMENTAL INFLUENCES:Shopping Groups
  28. UNDERSTANDING PERSONALITY CHAPTER 5: INDIVIDUAL DETERMINANTS OF CONSUMER BEHAVIOR
  29. CONSUMER PERSONALITY, TRAIT THEORY AND SELF IMAGES
  30. CONSUMER MOTIVATION:Needs, Goals, Generic Goals
  31. UNDERSTANDING LEARNING:Intentional and Incidental Learning, Implications for Marketers
  32. INSTRUMENTAL CONDITIONING, INFORMATION PROCESSING AND MEMORY
  33. ATTITUDES:Characteristics of Attitudes, Attitudes have consistency
  34. ATTITUDE FORMATION AND CHANGE:How attitudes are learned?
  35. ATTITUDE CHANGE STRATEGIES:Resolving two conflicting attitudes
  36. INTRODUCTION TO CONSUMER DECISION MAKING:Decision Complexity
  37. Problem Recognition, Search and Evaluation and Decision and Purchase
  38. Decision and Purchase:Consumer Decision Rules, Output, Relationship Marketing
  39. Decisions Related to Post Purchase:Product Set up and Use
  40. Marketing Implications of Decisions Related to Post Purchase:Understanding
  41. Post Purchase Evaluation:Determinants of Satisfaction, Consumer Complaint Behavior
  42. Post Purchase Dissonance:Dissonance Reduction, Marketing Implications
  43. Consumerism:Roots of Consumerism, The Nature of Consumerism
  44. Consumerism Issues and Responses:Environmental Concerns, Consumer Privacy
  45. Review Consumer Psychology Course:Consumer Research, Consumerism