Cognitive Approaches to Persuasion Theories of comparative judgment Adaptation level theory Social judgment theory Perspective theory Influencing consumers’ reference points Attribution theories Self-perception theory Attribution theory 1 & 2, Kelley’s covariation principles and causal schemata

Adaptation Level Theory 1. All objects can be arranged in some meaningful order. 2. All Dimension have a subjective neutral point called the adaptation level. 3. Adaptation level is the weighted geometric average of all stimuli considered at the time of judgment.

Acceptance Neutral Rejection Attitude change due to persuasive communication High Low Acceptance Neutral Rejection (non-commitment)

Product Ranking Product Ranking Advertising Claim Extremity

Perspective Theory J - L U - L R = f R = Rating on a scale J = The “true” underlying judgment U = Interpretation of the upper end point L = Interpretation of the lower end point

Pricing Strategy Penetration pricing Price signaling Price skimming or creaming Penetration pricing Price signaling Experience curve pricing Customary pricing

Price Promotion Advantages: 1. Price promotion costs are variable costs (i.e., pay-as-you-go costs) which are easier to manage than fixed costs. 2. Consumers are more sensitive to changes in list prices than to changes in price deals. 3. Price deals induce consumer trial of new products and reduce the retailer’s risk in stocking new brands. 4. Price deals simplify consumer decision making and make shopping for mundane products more fun. Disadvantages: 1. Decreasing brand loyalty 2. Increasing price sensitivity 3. Short-term focus 4. Leakage across segments

Price promotion and brand switching Probability of switching Margarine Flour .65 .44 .40 .82 .48 .43 Coupons Cents-off No Deal Deals Control Coupons Cents-off No Deal Deals Control

Price promotion and decreasing brand loyalty Probability of repeat purchase given deal retraction Margarine Flour .51 .62 .77 .44 .62 .74 Coupons Cents-off No Deal Deals Control Coupons Cents-off No Deal Deals Control

Attributional Approach Wood and Eagly (1981) Why does a communicator advocate a particular position? Knowledge Bias - the communicator may not know any better Reporting Bias - the communicator may not report what he or she really believes Expectancy Expectancy Confirmed Disconfirmed Control Attribution of message to communicator’s background 11.81 6.40 8.45 Attribution of message to factual evidence 10.39 11.84 10.47 Communicator bias 9.35 7.43 9.27 Message comprehension 2.36 2.08 2.40 Attitude change 1.56 2.51 1.94