Assignment Question
Using the theories and concepts of consumer behavior covered in AMB200 course, explain why consumers tend to apply more rational approach in making consumption decisions involving expensive products or services. Demonstrate adequate understanding of the theories covered in class and integrate relevant literature resources. Use 2 to 3 literature sources.
Answer
Introduction
Consumer behavior is a complex phenomenon influenced by various factors, including psychological, social, and cultural aspects. The rational approach in consumer decision making plays a crucial role, especially when it comes to expensive products or services. This paper explores the reasons behind consumers’ tendency to apply a more rational approach in such consumption decisions, drawing on theories and concepts from the AMB200 course and relevant literature.
Theoretical Framework
Consumer Decision-Making Process
The consumer decision-making process involves several stages, including problem recognition, information search, evaluation of alternatives, purchase, and post-purchase evaluation (Solomon et al., 2021). For expensive products or services, consumers often engage in extensive information search and evaluation to minimize risk.
Theory of Planned Behavior (TPB)
Ajzen’s Theory of Planned Behavior (Ajzen, 1991) suggests that consumer behavior is influenced by attitudes, subjective norms, and perceived behavioral control. When considering expensive purchases, consumers are more likely to evaluate these factors carefully to ensure that their intentions align with their actions.
Risk Perception
Consumers perceive greater risk when purchasing expensive items (Kapferer & Laurent, 2016). This heightened risk perception prompts consumers to employ a more rational approach to reduce uncertainty.
Factors Influencing Rational Approach
Financial Investment
Expensive products or services typically require a significant financial investment, making consumers more cautious about their choices. This financial commitment motivates them to carefully assess their options.
Quality and Durability
Consumers associate expensive products with higher quality and durability (Huang & Sarigöllü, 2012). To ensure they get value for their money, consumers engage in rational decision-making by evaluating product specifications and reviews.
Social Influence
Social pressure and the fear of judgment can also lead consumers to adopt a rational approach when making expensive purchases. They seek assurance that their choices align with societal norms and expectations.
Conclusion
Consumers tend to apply a more rational approach when making consumption decisions involving expensive products or services due to the significant financial investment, the perceived risk, and the desire for quality and social conformity. Understanding these factors is essential for marketers and businesses aiming to cater to the needs and preferences of consumers in the high-end market segment.
References
Ajzen, I. (1991). The Theory of Planned Behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211.
Huang, L., & Sarigöllü, E. (2012). How brand awareness relates to market outcome, brand equity, and the marketing mix. In A. Esposito Vinzi et al. (Eds.), Handbook of Partial Least Squares (pp. 235-256). Springer.
Kapferer, J. N., & Laurent, G. (2016). The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands. Kogan Page.
Solomon, M. R., White, K., Dahl, D. W., & Zaichkowsky, J. L. (2021). Consumer Behavior: Buying, Having, and Being. Pearson.
FAQ: Rational Approach in Consumer Decision Making for Expensive Products and Services
Q1: Why do consumers tend to make more rational decisions when it comes to expensive products or services?
- A1: Consumers tend to apply a more rational approach because of the significant financial investment and perceived risk associated with expensive purchases. They want to ensure they are making informed choices to minimize potential regrets.
Q2: Are there any specific theories that explain this rational approach in consumer decision making?
- A2: Yes, the Theory of Planned Behavior (TPB) by Ajzen is one such theory. It suggests that consumers consider their attitudes, subjective norms, and perceived behavioral control when making decisions, especially for high-value purchases.
Q3: How does risk perception influence consumer behavior for expensive products or services?
- A3: Consumers perceive greater risk when making expensive purchases. This heightened risk perception prompts them to employ a more rational approach to reduce uncertainty and make informed decisions.
Q4: Are social factors also a reason for this rational approach?
- A4: Yes, social factors play a role. Consumers may feel social pressure and the need to conform to societal norms when purchasing expensive items, leading them to carefully evaluate their choices.
Q5: Do marketers need to consider these factors when targeting consumers of expensive products?
- A5: Absolutely. Understanding consumers’ rational approach and the factors influencing it is essential for marketers to tailor their strategies and products to meet the needs and preferences of the high-end market segment.
