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Implications of transaction cost on the consumer choice heuristics: a grounded theory analysis at the Indian bottom of the pyramid

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  • Srabanti Mukherjee
  • Debdatta Pal

Abstract

The present study traces the implications of transaction cost on the consumer choice heuristics at the bottom of the pyramid. With the help of the grounded theory approach for theory generation, the study identifies that endowments like wide-spread low literacy and lack of 4As (awareness, availability, accessibility, and affordability) prompt the subsistence customers to minimise the transaction cost of purchase by resorting to bounded rationality, opportunism and locking-in effects. Such endeavours challenge the chronology of consumer decision-making process for convenience products and lead to an automatic choice of the interlinked market at the BoP even before evaluating the functional attributes of the brands of the required convenience products. Therefore, the findings of the study suggest that the choice of interlinked market limits the process of brand choice and forms an alternative choice heuristics in the subsistence market place.

Suggested Citation

  • Srabanti Mukherjee & Debdatta Pal, 2014. "Implications of transaction cost on the consumer choice heuristics: a grounded theory analysis at the Indian bottom of the pyramid," International Journal of Business and Emerging Markets, Inderscience Enterprises Ltd, vol. 6(4), pages 298-315.
    • Handle: RePEc:ids:ijbema:v:6:y:2014:i:4:p:298-315
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    Cited by:

    1. Mukherjee, Srabanti & Jebarajakirthy, Charles & Datta, Biplab, 2020. "Retailer selection compulsion in the subsistence markets," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).

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