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Shutterstock There is a basic misunderstanding about the forces that shape shopping behavior.
Consumers believe that they act rationally to maximize their personal best interests when making purchase decisions. And marketers assume that consumer shopping decisions are based on rational evaluation of the features and attributes of the products they sell — aided, of course, by communications and other brand promotion activity.
But consumer rationality is more myth than fact. Consumers are aware that they are targets of unrelenting marketing activity.
However, they overwhelmingly believe that they are strong, independent thinkers who are not seduced by the power of marketers. Consumers also tell us how their decision-making comes about.
When we ask how they make purchase decisions, consumers talk about their mental processes; describing how they investigate and weigh product features, consider such factors as how the benefits of one brand stacks up against the competition and which is the best value for their money.
Consumer bias is revealed when they overestimate their immunity from marketing influences. By attributing their purchase decisions to rational thinking rather than the influence of brands and advertising, consumers affirm their autonomy and derive satisfaction from this perceived control over their lives.
A second source of consumer bias is found in their descriptions of rational mental processes. The fact is that the human mind does not have access to information about the processes involved in their decision making. Awareness of the mental machinations that produce specific behaviors is an illusion that makes us feel like we are in control.
To maintain internal levels of confidencewe create narratives of mental processes to explain unconscious causes of behavior to ourselves and others.
Marketers also have a systematic bias which affects the relationships of their brands with consumers. The marketing process views the consumer through the lens of the product.
This product-centric view is bias in itself, as it constrains the exploration of the deep-seated psychology of motivations and preferences. Psychological Insights into Consumer Decision Making The Myth of the Rational Consumer comes into clearer view when we apply psychological research methods to explore shopping behavior.
Using this approach, we go beyond conscious self-reports of decision-making to discover the nonconscious factors that shape consumer behavior. Following are three examples from original research we have conducted into the psychological drivers of consumer behavior.
Technology products and services In the pre-digital age, technology was perceived objectively and rationally.
Jun 09, · A rational consumer in economics is defined as a person who acts in a rational way and makes a rational choices,namely spending his/her money wisely, or can maximize his/her attheheels.com: Resolved. Rational Consumer Ignorance Page 1 RATIONAL CONSUMER IGNORANCE G. Marcus Cole1* Abstract Much of the literature on form contracts focuses upon either the unconscionable oppressiveness of . Learn rational consumer with free interactive flashcards. Choose from different sets of rational consumer flashcards on Quizlet.
Our psychological studies reveal that the purchase decisions about package goods products are largely driven by consumer perceptions that the brand is an extension of the self.
The narrative communicates what the brand means to them … the emotional connection. It is this connection that makes consumers loyal to brands.
Luxury brands Consumers describe their decision-making process when purchasing a luxury product or service in terms of their judgments about the importance of the brand name and how unique and exclusive it is. They cite these rational factors as the elements of a luxury brand which satisfy the aspirational motives of their purchase.
Consumer Decision-Making - a 3-Step Process Using psychological studies like those above, we found similar results in healthcare, financial services, beauty and skincare, non-profit organizations and causes, and many other categories.
Our work reveals that consumers go through three steps in the purchase decision process. The process begins with overall perceptions about a category. Next, the motivations and needs of consumers drive initial perceptions of individual product and service options within the category. Finally, it is the perceived emotional end-benefits of owning and using specific products or services that moves consumers to a purchase decision and action.
If consumers were rational, the process would stop at the point of analyzing how well the product features and attributes satisfy needs and motivations. But that is not the case.Case study: Rational or irrational consumers? Introduction Rational or irrational consumers? This resource sheet is designed to support the AS and A level Economics A specification Topic seem to contradict the model of the consumer as rational.
While many of the theories of consumer behavior focus on rational action, Hawkins Stern believed heavily in the idea of impulse behavior. Stern argued that sudden buying impulses fit alongside rational purchasing decisions to paint a complete picture of the average consumer.
In economics a rational consumer is defined as the people who act in a rational way and make rational choices, namely spending their money wisely. Utility is a term used to measure the amount of pleasure a consumer gains from a good or service they choose to invest in, thus spending our money wisely, in economic terms is a method of maximizing.
The economics-textbook models of rational consumer behavior assume that all market participants possess all relevant information about prices, products, preferences and production techniques.
In effect, they assume everybody knows everything they need to know to make perfect decisions. Rational choice theory is an economic principle that assumes that individuals always make prudent and logical decisions that provide them with the highest amount of personal utility.
Learn rational consumer with free interactive flashcards. Choose from different sets of rational consumer flashcards on Quizlet.