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Consumer Influence and the Diffusion of Innovations
Chapter 9, 13 & 14 Consumer Influence and the Diffusion of Innovations
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What is a Group? Two or more people who interact to accomplish either individual or mutual goals A membership group is one to which a person either belongs or would qualify for membership A symbolic group is one in which an individual is not likely to receive membership despite acting like a member
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Group Reference Group Indirect Reference Group
A person or group that serves as a point of comparison (or reference) for an individual in the formation of either general or specific values, attitudes, or behavior. Indirect Reference Group Individuals or groups with whom a person identifies but does not have direct face-to-face contact, such as movie stars, sports heroes, political leaders, or TV personalities.
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The Communications Process
The Message Initiator (the Source) The Sender The Receiver The Medium The Message The Target Audience (the Receivers) Feedback - the Receiver’s Response
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The Message Initiator (source)
Issues with Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Includes word of mouth These sources also called opinion leaders Informal sources may not always be credible
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The Message Initiator (source)
Issues with Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Neutral sources have the greatest credibility Source credibility judged on past performance, reputation, service, quality, spokesperson image, retailers, social responsibility Institutional advertising used to promote favorable company image
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The Message Initiator (source)
Issues with Credibility Effectiveness related to: The message Synergy between endorser and type of product Demographic characteristics of endorser Corporate credibility Endorsement wording Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility
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This ad has strong synergy between the endorser and the type of product.
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The Message Initiator (source)
Issues with Credibility Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility Credibility of retailers Reputation of the medium that carries the ad Consumer’s previous experience with product
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Sleeper Effect The idea that both positive and negative credibility effects tend to disappear after a period of time.
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The Target Audience (receivers)
Personal characteristics and comprehension Involvement and congruency Mood Barriers to communication Selective exposure to messages Psychological noise
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Feedback The Receiver’s Response
Feedback should be gathered: Promptly Accurately
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Comprehensive Communication Model - Figure 9-6
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Designing Persuasive Communications
Communications strategy Must include objectives Includes cognitive models Newer models include perception, experience, and memory
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Designing Persuasive Communications
Target Audience Segmentation is key Media Strategy Consumer profile Audience profiles
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Excerpts from Table 9.1 Persuasive Capabilities and Limitations of Major Media (Magazines)
Highly selective Selective binding possible High quality production High credibility Long message life High pass-along rate Long lead time High clutter Delayed and indirect feedback Rates vary based on circulation and selectivity
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Excerpts from Table 9.1 Persuasive Capabilities and Limitations of Major Media (Television)
Low costs per contact Long lead time High clutter Short message life Viewers can avoid exposure with zapping, etc. Day-after recall tests for feedback Large audiences possible Appeals to many senses Emotion and attention possible Demonstration possible Very high costs overall
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Designing Persuasive Communications
Message Structure and Presentation Resonance Message framing Comparative advertising Order effects Repetition Wordplay Used to create a double meaning when used with a relevant picture
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Wordplay on SUV
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Designing Persuasive Communications
Message Structure and Presentation Resonance Message framing Comparative advertising Order effects Repetition Positive framing Negative framing One-sided vs. two-sided
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Opinion Leadership The process by which one person (the opinion leader) informally influences the consumption actions or attitudes of others who may be opinion seekers or opinion recipients.
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What is Opinion Leadership?
Opinion Receiver Opinion Seeker
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Special Issues Opinion leaders are four times more likely to be asked about political issues, three times more likely to be asked about computers or investments, and twice as likely to be asked about restaurants
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Word of Mouth People convey a lot of product information to others on an informal basis. WOM is product information transmitted by individuals to individuals. Tend to be more reliable and trustworthy than other formal marketing communications. Consumers weigh negative WOM more heavily than they do positive communications.
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Reasons for the Effectiveness of Opinion Leadership
Credibility Positive and Negative Product Information Information and Advice Opinion Leadership Is Category-Specific Opinion Leadership Is a Two-way Street
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Motivations Behind Opinion Leadership
The Needs of Opinion Leaders The Needs of Opinion Receivers Purchase Pals Surrogate Buyers versus Opinion Leaders
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The Needs of Opinion Leaders
Self involvement Social involvement Product involvement Message involvement
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The Needs of Opinion Receivers
New-product or new usage information Reduction of perceived risk Reduction of search time Receiving the approval of the opinion leader
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Table 15.3 A Comparison of Motivations
(Excerpts) OPINION LEADERS OPINION RECEIVERS SELF-IMPROVEMENT MOTIVATIONS Reduce post-purchase uncertainty or dissonance Gain attention or status Assert superiority and expertise Feel like an adventurer Reduce the risk of making a purchase commitment Reduce search time PRODUCT-INVOLVEMENT MOTIVATIONS Express satisfaction or dissatisfaction with a product or service Learn what products are new in the marketplace Learn how to use or consume a product
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Surrogate Buyers Person who is hired to provide input into purchase decisions.
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Table 15.4 Key Differences Between Opinion Leaders and Surrogate Buyers
1. Informal relationship with end-users 2. Information exchange occurs in the context of a casual interaction 4. Does not get paid for advice 5. Usually socially more active than end-users 6. Accountability limited regarding the outcome of advice 7. As accountability limited, rigor in search and screening of alternatives low 8. Likely to have used the product personally 9. More than one can be consulted before making a final decision 10. Same person can be an opinion leader for a variety of related product categories
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Table 15.4 Key Differences SURROGATE BUYER
1. Formal relationship; occupation-related status 2. Information exchange in the form of formal instructions/advice 4. Usually hired, therefore gets paid 5. Not necessarily socially more active than end-users 6. High level of accountability 7. Search and screening of alternatives more rigorous 8. May not have used the product for personal consumption 9. Second opinion taken on rare occasions 10. Usually specializes for a specific product/service category
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Profile of Opinion Leaders
GENERALIZED ATTRIBUTES ACROSS PRODUCT CATEGORIES CATEGORY-SPECIFIC ATTRIBUTES Innovativeness Willingness to talk Self-confidence Gregariousness Cognitive differentiation Interest Knowledge Special-interest media exposure Same age Same social status Social exposure outside group
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Market Maven Person who is actively involved in transmitting market place information of all types. Possess a wide range of information about many different type of products, retail outlets and other dimensions of markets. Like to shop and share their shopping expertise. Not necessarily the early purchaser but they are just into shopping and staying on top of what’s happening in the marketplace. Possess high brand awareness but tend to try more brands. Their influence expands beyond the realm of high-involvement products. Appear to be motivated by sense of obligation to share information.
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The Interpersonal Flow of Communication
Two-Step Flow A communication model that portrays opinion leaders as direct receivers of information from mass media sources who, in turn, interpret and transmit this information. Multistep Flow A revision of the traditional two-step theory that shows multiple communication flows
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Two-Step Flow of Communication Theory Opinion Receivers (the masses)
Mass Media Opinion Leaders Opinion Receivers (the masses)
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Multistep Flow of Communication Theory
Mass Media Opinion Leaders Opinion Receivers/ Seekers Step 1a Step 3 Step 1b Information Receivers
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Diffusion Process The process by which the acceptance of an innovation is spread by communication to members of social system over a period of time.
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Elements of the Diffusion Process
The Innovation The Channels of Communication The Social System Time
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Defining Innovations Firm-oriented definitions
Product-oriented definitions Market-oriented definitions Consumer-oriented definitions
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Product-Oriented Definitions
Continuous Innovation Dynamically Continuous Innovation Discontinuous Innovation
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Telephone Innovations
Cell Phone Fax Machine Telephone answering machines Call forwarding Call waiting Caller ID Banking by telephone Call-prompting systems Hold button Line-in-use indicator Redial button Auto dialing feature Touch-tone service 800 Numbers 900 Numbers Ability to send/receive Incorporate PDA functions Calendar/Phonebook Voice-activated dialing Switch from analog to digital Include camera Ringer styles Play games Fax modem Mobile fax machines Home office systems (combined fax, copier, computer printer) Plain paper fax Speed dial buttons Delayed send Copy function Paper cutter Discontinuous Innovations Dynamically Continuous Continuous
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Product-Oriented Definitions
Dramatically Continuous Innovations Continuous Innovations
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The Innovation Product Characteristics
Degree to which consumers consider it superior to existing substitutes Relative Advantage Degree to which consumers feel it is consistent with their present needs, values, and practices Compatibility The degree to which it is difficult to understand or use Complexity The degree to which it can be tried on a limited basis Trialability The degree to which its benefits can be observed, imagined, or described Observability These five product characteristics help explain why some new products tend to get accepted more than others. They are presented with their explanation in this slide. Again, think about the iPod and how it has so many of these characteristics.
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Characteristics That Influence Diffusion
EXAMPLES Relative Advantage Air travel over train travel, cordless phones over corded telephones Compatibility Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape Complexity Electric shavers, instant puddings
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continued CHARACTERISTICS EXAMPLES Trialability Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons Observability Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses
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Time and Diffusion Purchase Time Adopter Categories Rate of Adoption
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Adoption Process The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product.
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Stages in Adoption Process
NAME OF STAGE WHAT HAPPENS DURING THIS STAGE EXAMPLE Awareness Consumer is first exposed to the product innovation. Janet sees an ad for a new MP3 player in the magazine she is reading. Interest Consumer is interested in the product and searches for additional information. Janet reads about the MP3 player on the manufacturer’s Web site and then goes to an electronics store near her apartment and has a salesperson show her a unit. Evaluation Consumer decides whether or not to believe that this product or service will satisfy the need--a kind of “mental trial.” After talking to a knowledgeable friend, Janet decides that this MP3 player will allow her to easily download the MP3 files that she has on her computer. She also feels that the unit’s size is small enough to easily fit into her beltpack.
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Importance of Information Sources Figure 14.8
Consumers find different sources of information valuable at different phases of the decision process. This figure shows the decline of the importance of mass-media as a consumer becomes closer to making their final decision on the purchase of a new product.
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Stages in Adoption Process
Trial Consumer uses the product on a limited basis Since an MP3 player cannot be “tried” like a small tube of toothpaste, Janet buys the MP3 player online from Amazon.com, which offers a 30-day full refund policy. Adoption (Rejection) If trial is favorable, consumer decides to use the product on a full, rather than a limited basis--if unfavorable, the consumer decides to reject it. Janet finds that the MP3 player is easy to use and that the sound quality is excellent. She keeps the MP3 player. NAME OF STAGE WHAT HAPPENS DURING THIS STAGE EXAMPLE
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Adopter Categories A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters.
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Adopter Categories First to buy the mini netbook
Category 1 - Innovators First to buy the mini netbook Category 2 – Early adopters Will buy mini netbook shortly after its introduction Category 3 – Early Majority Members of the 1st ½ of the “mass market” who would purchase the mini netbook Category 4 – Late Majority Second half of the “mass market” who would purchase the mature mini netbook Category 5 – Laggards Very last to purchase the mini netbook, if at all There are 5 major adopter categories which flow in order from the innovators who are the earliest to purchase to the laggards who are the latest. Were you one of the last to purchase a Smartphone? (blackberry or iPhone) 54
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Percentage of Adopters by Category Sequence
Adopter Categories Early Adopters 13.5% Laggards 16% Early Majority 34% Late Majority 34% Innovators 2.5% Percentage of Adopters by Category Sequence
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Innovators: Description
2.5% of population Venturesome Very eager to try new ideas Acceptable if risk is daring More cosmopolite social relationships Communicates with other innovators
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Early Adopters: Description
13.5% of population Respected More integrated into the local social system The persons to check with before adopting a new idea Category contains greatest number of opinion leaders Are role models
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Early Majority: Description
34% of population Deliberate Adopt new ideas just prior to the average time Seldom hold leadership positions Deliberate for some time before adopting
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Late Majority: Description
34% of population Skeptical Adopt new ideas just after the average time Adopting may be both an economic necessity and a reaction to peer pressures Innovations approached cautiously
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Laggards: Description
16% of population Traditional The last people to adopt an innovation Most “localite” in outlook Oriented to the past Suspicious of the new
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Ad Appeals to Fashion Innovators
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Consumer Decision Making and Beyond
Consumer Behavior SCHIFFMAN & KANUK Chapter 14 Consumer Decision Making and Beyond
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Decision The selection of option from two or more alternative choices.
Hobson’s choice- no-choice decision.
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Levels of Consumer Decision Making
Extensive Problem Solving Limited Problem Solving Routine Response Behavior
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Figure 14.3 A Simple Model of Consumer Decision Making
External Influences Firm’s Marketing Efforts 1. Product 2. Promotion 3. Price 4. Channels of distribution Sociocultural Environment 1. Family 2. Informal sources 3. Other noncommercial sources 4. Social class 5. Subculture and culture Input Consumer Decision Making Need Recognition Prepurchase Search Evaluation of Alternatives Psychological Field 1. Motivation 2. Perception 3. Learning 4. Personality 5. Attitudes Process Experience Postdecision Behavior Purchase 1. Trial 2. Repeat purchase Postpurchase Evaluation Output
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Three Stages of Consumer Decision Making
Need Recognition Prepurchase Search Evaluation of Alternatives
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Table 14.2 Factors that are Likely to Increase Prepurchase Search
Product Factors Long interpurchase time (e.g., Fridge, TV, etc) Frequent changes in product styling (e.g., Mobile phone sets) Volume purchasing (large number of units) (e.g., dinner for wedding guests) High price (e.g., cars) Many alternative brands (e.g., restraurants) Much variation in features (e.g., foreign education)
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Table 14.2 continued Situational factors Experience
First-time purchase (PDA) No past experience because the product is new (IPOD) Unsatisfactory past experience within the product category Social Acceptability The purchase is for a gift The product is socially visible Value-Related Considerations Purchase is discretionary rather than necessary (Vase) All alternatives have both desirable and undesirable consequences Family members disagree on product requirements or evaluation of alternatives (Cars) Product usage deviates from important reference group The purchase involves ecological considerations Many sources of conflicting information
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Table 14.2 continued Product Factors
Demographic Characteristics of Consumer Well-educated High-income White-collar occupation Under 35 years of age Personality Low dogmatic Low-risk perceiver (broad categorizer) Other personal factors, such as high product involvement and enjoyment of shopping and search
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Table 14.3 Alternative Prepurchase Information Sources for an Ultralight Laptop
PERSONAL Friends Neighbors Relatives Co-workers Computer salespeople IMPERSONAL Newspaper articles Magazine articles Consumer Reports Direct-mail brochures Information from product advertisements Internal web site
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Figure 14.5 The Evoked Set as a Subset of All Brands in a Product Class
Known Brands Unknown Brands (1) Evoked Set Inept Set Inert Set Acceptable Brands Unacceptable Brands Indifferent Brands Overlooked Brands (2) (3) (4) Purchased Brands Not Purchased Brands (5)
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Evoked Set Specific brands a consumer considers in making a purchase with in a particular product category.
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Brands that a consumer excludes from purchase consideration.
Inept Set Brands that a consumer excludes from purchase consideration.
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Inert Set Brands that a consumer is indifferent toward because they are perceived as having no particular advantage.
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Consumer Decision Rules
Compensatory Noncompensatory Conjunctive Decision Rule Disjunctive Decision Rule Lexicographic Rule
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Compensatory Decision Rules
A type of decision rule in which a consumer evaluates each brand in terms of each relevant attribute and then selects the brand with the highest weighted score.
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Non-compensatory Decision
Rules A type of consumer decision rule by which positive evaluation of a brand attribute does not compensate for a negative evaluation of the same brand on some other attribute.
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Conjunctive Decision Rule
A noncompensatory decision rule in which consumers establish a minimally acceptable cutoff point for each attribute evaluated. Brands that fall below the cutoff point on any one attribute are eliminated from further consideration.
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Disjunctive Rule A noncompensatory decision rule in which consumers establish a minimally acceptable cutoff point for each relevant product attribute.
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Lexicographic Rule A noncompensatory decision rule - consumers first rank product attributes in terms of importance, then compare brands in terms of the attribute considered most important.
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Affect Referral Decision Rule
A simplified decision rule by which consumers make a product choice on the basis of their previously established overall ratings of the brands considered, rather than on specific attributes.
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Table Hypothetical Use of Popular Decision Rules in Making a Decision to Purchase an Ultralight Laptop DECISION RULE MENTAL STATEMENT Compensatory rule “I selected the computer that came out best when I balanced the good ratings against the bad ratings.” Conjunctive rule “I selected the computer that had no bad features.” Disjunctive rule “I picked the computer that excelled in at least one attribute.” Lexicographic rule “I looked at the feature that was most important to me and chose the computer that ranked highest on that attribute.” Affect referral rule “I bought the brand with the highest overall rating.”
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Types of Purchases Trial Repeat Purchase Purchases 100ml bottle
Shampoo Sachets Repeat Purchases 100ml bottle Long-Term Commitment Purchases Family pack
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Outcomes of Postpurchase Evaluation
Actual Performance Matches Expectations Neutral Feeling Actual Performance Exceeds Expectations Positive Disconfirmation of Expectations Performance is Below Expectations Negative Disconfirmation of Expectations
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