Assignment Question
Using the theories and concepts of consumer behavior, explain why consumers tend to apply more rational approach in making consumption decisions involving expensive products or services.
Assignment Answer
Consumer Behavior: The Rational Approach to Expensive Product and Service Consumption
Introduction
Consumer behavior is a complex field that explores the various factors influencing how individuals make purchasing decisions. These decisions range from simple everyday choices to significant investments in expensive products and services. When it comes to expensive purchases, consumers tend to adopt a more rational approach in their decision-making process. This essay will delve into the theories and concepts of consumer behavior to explain why consumers tend to apply a more rational approach when making consumption decisions involving costly products or services. We will examine the roles of perceived risk, involvement, information search, and cognitive dissonance in shaping consumer behavior within this context.
I. Perceived Risk and Expensive Purchases
Perceived risk is a fundamental concept in consumer behavior that plays a crucial role in shaping consumer decision-making, especially when it comes to expensive products or services. Perceived risk refers to the consumer’s perception of the potential negative consequences associated with a purchase decision (Peter & Tarpey, 1975). In the context of expensive purchases, consumers often perceive a higher level of risk due to the substantial financial commitment involved.
One of the key dimensions of perceived risk is financial risk. When consumers are considering buying an expensive item, such as a luxury car or a high-end smartphone, they are aware of the significant financial investment required. This heightened financial risk leads consumers to adopt a more rational approach to decision-making. They are more likely to conduct thorough research, seek out product reviews, and compare prices and features. This rational approach helps them mitigate the financial risk associated with the purchase (Ratchford, Lee, & Talukdar, 2003).
Additionally, consumers also perceive performance risk when considering expensive products or services. They want assurance that the item will meet their expectations and provide the desired benefits. This leads them to seek out detailed information about product specifications, quality, and reliability. They may also consult expert opinions and user reviews to reduce their perception of performance risk (Erdem & Swait, 2004).
In summary, perceived risk, particularly financial and performance risk, encourages consumers to adopt a rational approach when making expensive consumption decisions. The fear of making a costly mistake prompts them to gather information and carefully evaluate their options.
II. Involvement and Expensive Purchases
Consumer involvement refers to the level of personal relevance or importance a consumer attaches to a particular purchase decision (Zaichkowsky, 1985). Expensive purchases tend to elicit a higher level of involvement from consumers compared to routine or low-cost purchases. This increased involvement drives consumers to apply a more rational approach.
High involvement in a purchase decision leads consumers to engage in extensive information search and evaluation of alternatives. When individuals perceive an expensive product or service as personally relevant, they are more likely to invest time and effort in gathering information, comparing options, and making a well-informed choice (Hansen, 2005). For example, someone planning to buy a luxury watch may spend weeks or even months researching different brands, models, and features before making a purchase.
Moreover, high involvement also means that consumers are emotionally invested in the outcome of the decision. They want to ensure that their investment in an expensive product or service aligns with their personal values and preferences. This emotional attachment further motivates them to take a rational approach to decision-making, carefully weighing the pros and cons of each option (Zaichkowsky, 1985).
In summary, the concept of involvement plays a significant role in driving consumers to adopt a rational approach when making expensive consumption decisions. The heightened personal relevance and emotional investment associated with expensive purchases lead consumers to engage in extensive information search and evaluation.
III. Information Search and Expensive Purchases
Information search is a critical stage in the consumer decision-making process, and it becomes particularly intensive when consumers are considering expensive products or services. In the context of expensive purchases, consumers engage in a more extensive and thorough information search to reduce uncertainty and make an informed decision (Bettman, Luce, & Payne, 1998).
One reason for this intensive information search is the high financial risk involved in expensive purchases. Consumers want to ensure that they are making the best possible choice to justify the significant financial outlay. This often involves seeking information from multiple sources, such as online reviews, expert opinions, product specifications, and price comparisons (Kim, Jin, & Swinney, 2009).
Furthermore, the complexity of expensive products and services also drives consumers to conduct more in-depth information searches. Whether it’s a high-end camera with numerous technical features or a luxury cruise with various itinerary options, consumers want to understand the intricacies of what they are buying. This complexity leads to a rational approach, as consumers need to gather comprehensive information to make sense of their options (Bettman et al., 1998).
Social influence also plays a role in information search for expensive purchases. Consumers may consult their social networks, including friends, family, and online communities, to gather opinions and experiences. This social information-seeking behavior can provide valuable insights and contribute to a more rational decision-making process (Senecal & Nantel, 2004).
In summary, the intensive information search undertaken by consumers when considering expensive purchases is driven by the desire to reduce financial risk, the complexity of the product or service, and the influence of social networks. This extensive information gathering aligns with a rational approach to decision-making.
IV. Cognitive Dissonance and Expensive Purchases
Cognitive dissonance is a psychological phenomenon that occurs when individuals experience discomfort or tension as a result of holding conflicting beliefs or attitudes (Festinger, 1957). In the context of expensive purchases, cognitive dissonance often arises after the purchase decision has been made and the product or service has been acquired. This discomfort can motivate consumers to apply a rational approach to reduce the dissonance.
Consumers who have invested a substantial amount of money in an expensive product or service may experience cognitive dissonance if they encounter information or experiences that challenge the wisdom of their decision (Dhar & Simonson, 2003). For example, a consumer who recently purchased a high-end smartphone may start to doubt their decision if they read negative reviews or hear about a competitor offering better features at a lower price.
To alleviate cognitive dissonance, consumers may engage in post-purchase information search and seek reassurance. They may actively seek out positive reviews and opinions that support their decision, or they may compare their purchase to alternatives and find reasons to justify their choice (Simonson & Nowlis, 2000). This rationalization process helps consumers maintain a positive self-image and reduce the discomfort associated with cognitive dissonance.
Additionally, consumers may engage in word-of-mouth communication to validate their purchase decisions and seek social confirmation from others who have made similar expensive purchases (Richins, 1983). By sharing their positive experiences with others and receiving affirmation, consumers can alleviate cognitive dissonance and strengthen their belief in the rationality of their choice.
In summary, cognitive dissonance is a psychological factor that encourages consumers to apply a rational approach after making expensive consumption decisions. The discomfort caused by conflicting beliefs motivates consumers to seek reassurance and validation, ultimately leading to a rationalization of their choices.
Conclusion
Consumer behavior is a multifaceted field that examines the various factors influencing how individuals make purchasing decisions. When it comes to expensive products and services, consumers tend to apply a more rational approach due to the interplay of perceived risk, involvement, information search, and cognitive dissonance.
Perceived risk, particularly financial and performance risk, motivates consumers to gather information and carefully evaluate their options to mitigate potential negative consequences. High involvement in expensive purchases leads consumers to engage in extensive information search and evaluation, driven by personal relevance and emotional attachment. The complexity of expensive products and services also necessitates a rational approach to decision-making. Additionally, cognitive dissonance, which can arise post-purchase, encourages consumers to seek reassurance and validation, further reinforcing a rationalization process.
In today’s consumer landscape, where expensive products and services abound, understanding why consumers tend to apply a rational approach is crucial for businesses and marketers. By recognizing the factors that drive rational decision-making, businesses can tailor their marketing strategies to address consumers’ information needs, reduce perceived risk, and provide reassurance, ultimately enhancing the overall consumer experience and increasing the likelihood of successful sales in the high-end market.
References
Bettman, J. R., Luce, M. F., & Payne, J. W. (1998). Constructive consumer choice processes. Journal of Consumer Research, 25(3), 187-217.
Dhar, R., & Simonson, I. (2003). The effect of forced choice on choice. Journal of Marketing Research, 40(2), 146-160.
Erdem, T., & Swait, J. (2004). Brand credibility, brand consideration, and choice. Journal of Consumer Research, 31(1), 191-198.
Festinger, L. (1957). A theory of cognitive dissonance. Stanford University Press.
Hansen, T. (2005). Consumer choice behavior in online and traditional supermarkets: The effects of brand name, price, and other search attributes. International Journal of Information Management, 25(5), 379-386.
Kim, H. S., Jin, H. S., & Swinney, J. L. (2009). The effect of perceived product-website interactivity and information quality on customer satisfaction and purchase intention. International Journal of Electronic Commerce, 13(3), 57-81.
Peter, J. P., & Tarpey, L. X. (1975). A comparative analysis of three consumer decision strategies. Journal of Consumer Research, 2(1), 29-37.
Ratchford, B. T., Lee, M. S., & Talukdar, D. (2003). The impact of the internet on information search for automobiles. Journal of Marketing Research, 40(2), 193-209.
Richins, M. L. (1983). Negative word-of-mouth by dissatisfied consumers: A pilot study. Journal of Marketing, 47(1), 68-78.
Senecal, S., & Nantel, J. (2004). The influence of online product recommendations on consumers’ online choices. Journal of Retailing, 80(2), 159-169.
Simonson, I., & Nowlis, S. M. (2000). The role of explanations and need for uniqueness in consumer decision making: Unconventional choices based on reasons. Journal of Consumer Research, 27(1), 49-68.
Zaichkowsky, J. L. (1985). Measuring the involvement construct. Journal of Consumer Research, 12(3), 341-352.
