Essay/Term paper: Theory of varied consume choice behavior and its importance

Essay, term paper, research paper:  Narrative Essays

Theory Of Varied Consume Choice Behavior and Its Importance


For decades, scholars and practitioners have been frustrated by the very
limited capacity of either psychological or marketing models to predict
individual choices on particular occasions. This paper discusses a theory
which explains the degree to which the extant models omit important influences
that produce varied individual choice behaviour. The focus of this paper is on
the sequences of product purchases. Discretionary actions and activities are
also covered.

THE THEORETICAL AND APPLIED RELEVANCE OF VARIED BEHAVIOUR

The assumption that consumers make rational, utility-maximizing choices
has played an important role in economic thought. As long as preferences remain
unchanged, the consumer is expected to choose the most preferred of the
available products. Thoughts about consumers' behaviour towards substitutes
hold a similar position. If a consumer's preference for the most preferred
alternative product declines or the product is currently unavailable, the
consumer is expected to choose a close substitute. From the firm's strategic
point of view, this means that the marketer of a secondary brand should make
its brand similar to the most popular brand.
Careful consideration of the preceding description of consumer choice
behaviour and the firm's selection of a strategy immediately leads one to
question the general applicability of these assumption / thought. Although
consumers often display stable preferences, sound choice behaviour seldom
remains constant. Instead, consumers frequently change their choices of
products or brands. Furthermore, the choices made on different occasions often
involve two very different products or brands. In summary, changing, varied
behaviour is the rule. Managers often avoid the use of simple "me-too" brands,
recognizing that consumers are seeking more than simple substitutes. This
tendency is seen directly in a number of product categories in which successful
products are seldom replaced with highly similar products. Instead, a degree of
product newness is viewed as being essential to maintain consumer interest.
The theory of consumer choice behaviour that is presented in this paper
is designed to explain the typical degree of variability that consumers exhibit
in a series of related choices. Should this theory more accurately describe
individual choices, than the meaning and predictive power of many models must be
questioned. For example, the results from all preference-based mapping methods,
such as MDPREF (Carroll, 1972) and the Schonemann-Wang (1972) models, should be
interpreted with great care. In these cases, the analyst must resist jumping to
the conclusion that the choice objects that appear close to each other have
similar characteristics. All simple attribute-based choice models, such as the
widely used conjoint method, must also be interpreted carefully. Here one must
resist the assumption that the set of most preferred items will necessarily have
similar characteristics. Typically, the set of most preferred or most
frequently chosen products will contain items that are very different. These
products do not necessarily satisfy the notion that the objects' attributes will
surpass the total utility produced. For example, sometimes a consumer may want
a cold beverage and at other times the same consumer may want a hot beverage.
Furthermore, the more of one kind of beverage that an individual consumes, the
less likely the consumer will make the same choice on the next occasion. Unlike
the reasons that produce constant-purchase and / or constant-use behaviour,
different motives produce changes in purchase and use. To predict the choice
made on the next occasion, one needs to account for the consumer's prior choice
behaviour.

A THEORY OF VARIED CONSUMER BEHAVIOUR

Psychologists have long recognized that individual judgements and
choices contain an important random element that leads to inconsistent behaviour.
Thurstone's Law of Comparative and Categorical Judgement modelled individual
judgements and choices. The random component present in most contexts of
interest to marketing professionals include larger variables that are too costly
to measure or for which practical measurement methods have not been developed.
Consider the purchase of breakfast cereal. At the point of purchase, a
favourite brand may be out of stock, the customer may be distracted, the
shopper's child may make the selection, or a clerk restocking part of the
assortment may contain choice. Although this list contains only a few of the
conditions which can affect consumer choice, it demonstrates the difficulty of
observing and recording all of the relevant influences. All unmeasurable
influences are labelled inexplicable causes of varied behaviour.

There are two important types of explicable causes of varied behaviour. The
first type of the explicable cause of varied behaviour has to do with an
individual's motives that indirectly or incidentally produce patterns of varied
behaviour, while the second one has to do with an individual's direct motives
where varied behaviour is valued. Purchasing for multiple uses in an example of
the first type of motive. An example of the first type of motive is the
purchasing of one kind of paint for prime raw wood and another kind of paint to
obtain a durable finish coat. An example of the second type of motive is the
purchasing of a new piece of clothing to keep up with the current trend or to
relieve the boredom produced by repeatedly wearing an older style. These two
types of motive for varied behaviour are explored in more detail in the
following subsecctions.

INDIRECT VARIED BEHAVIOUR

There are two major kinds of motives that indirectly produce varied
behaviour. These have to do with multiple needs and changing conditions.
Multiple needs may arise due to multiple users, multiple uses by the individual,
and multiple contexts in which the product class is used. Although only one
member in a household may need low-calorie products, a record of the beverage
purchases made by the principal household purchasing agent will typically show
occasional change from high- to low- calorie products and / or the simultaneous
purchase of both high- and low-calorie beverages. In a similar manner, when an
individual uses a food product such as rice in separate dishes and as an
ingredient in other dishes, from time to time purchases may change from instant
rice to regular rice or to wild rice so that the most suitable product will be
available to use. Closely related is the use of the product in multiple
contexts. Here, an individual may buy a common table wine to serve at regular
evening meals but buy a premium wine to serve to guests at a dinner party.

Changing conditions include new choice sets, changing tastes, and new
constraints. Over time, more classes of choice objects are presented to the
consumer with new and / or changed alternatives. The products in a product class,
the candidates available to voters, and the services offered by financial
institutions all illustrate the a choice set. A previously preferred product
may no longer be available, a candidate's declining health may encourage voters
to switch loyalties, and a new financial service may offer important advantage
to a large number of individuals who use the older services. Changes in
individual choice behaviour can also be due to changes in individual tastes or
preferences. As individuals mature, their needs change, and as individuals are
exposed to persuasive messages about products, candidates, or services, their
preferences may change. Finally, an individual may change his or her choices due
to new constraints such as a new legislation or changes in their disposable
personal income.

DIRECT VARIED BEHAVIOUR

Direct varied behaviour is primarily motivated by the desire for variety.
Two kinds of motives must be recognized. The first category deals with the
interpersonal variety or change that takes place to the individual's own
possessions and experiences. The second category deals with the interpersonal
variety or change that occurs to possessions and experiences of others.

Interpersonal variety can result when an individual becomes bored with
repeated exposures to similar possessions or activities. For example, a record
collection that contains the works of one or a few artists may be diversified
for the sake of variety or contrast. An individual may switch away from a
favourite brand to gain information about new products or to help reconfirm
their regular purchase pattern. Notice that the decisions motivated in this way
have little or no social content, but that the varied behaviour provides a
direct personal reward.

Rarely will a given choice object deliver just the mix of attribute needed
to keep the relevant attributes near their ideal levels. For this reason,
individuals must change their choice from time to time to maintain desirable
levels of each attribute. With this in mind, consider an individual who wants to
maintain his or her physical fitness and who acquires products and services with
attributes that contribute their desire to maintain their physical fitness. When
past choices lead to an excessive focus on fitness, this individual will tend to
choose products and activities that contribute to other desired attributes or
goals, such as intellectual stimulation and artistic interests. As satiation or
deprivation grows, the individual is progressively more strongly motivated to
choose different alternatives so that an ideal balance of each attribute can be
attained.

Seeking interpersonal variety has a strong social content. Here, the
individual is faced with maintaining a balance between two conflicting motives.
First, the need for affiliation encourage one to change his or her choices to
keep in phase with the changing behaviour of valued peers and / or differentiate
them self from the behaviour of undesirable others. Second, the need for
distinction and individuality motivates changes in behaviour that will create
desirable differences between the individual and his or her valued peers. These
separate forms of interpersonal varied behaviour can only be understood as they
relate to the possessions and actions that have social meaning to the individual.
Interpersonal form of varied behaviour do not share this social dimension but
both the interpersonal motives are higher-older processes such that the
predictions of an individual's choice on the next occasion cannot be fully
understood without knowledge of the possessions or past actions of one or more
individua ls.

THE UNIFIED THEORY

The elements motivating varied behaviour, can be summarized in the
simple diagram of Appendix 2. The portion of the theory dealing with explicable
direct causes of varied behaviour involves consideration of the post-decision
level of the attributes provided by alternative choice objects in relation to
the desired levels of these attributes. The potential utility provided by any
choice can be expressed as the sum of the post-choice improvements in the level
of each attribute. This improvement is measured by the closeness of the post-
choice levels of the N object's attributes to the ideal levels of these
attribute and by similar measures covering information, affiliation, and
distinction. See appendix 3. Note that the weights indicate the importance of
each attribute "i'.

The model appears to be computationally feasible and is likely to produce
improved predictions of individual choice, especially in those cases where
interpersonal and / or interpersonal motives are important.

SOME KEY MEASUREMENT ISSUES

Variety has been treated as a primitive term. There are two measures of
- structural variety and temporal variety.

Structural variety is defined on an unordered set of objects at a point
in time. The more distinct the characteristics possessed by each object, the
greater the potential variety possessed by the set. For example, a set of
marbles that vary in size, weight, material, colour, and surface treatment can
differ along just these five dimensions. By way of contrast, residential
structures or automobiles can vary along dozens of important characteristics or
dimensions. These facts lead to a geometric representation of variety in which
objects can be plotted or located along each dimension, just as one might locate
cities by their longitude and latitude on a common map. The larger the average
distance between objects located in a perceptual map spanned by the attributes
of the objects, the greater the objects' structural variety.

Temporal variety is concerned with the variety of a temporally ordered
set such as the recreational activities that an individual engages in during a
week or the amount of books that an individual reads over a period of time.
Here, it is natural to consider the structural variety (the degree of difference
or similarity among objects) but the variety conveyed by the sequence presents
additional aspects that must be considered. How often each object or element
appears in the sequence and the differences between contiguous objects or
elements in the sequence must be considered.

The two types of variety is concerned with a set of objects, either at a
point in time or over a given time interval. The two measures of variety are
either object or element specific, but they become individual specific as well
when the owner of a collection of objects is identified. In general, we expect
the distribution of individuals' variety measures to vary across the types of
objects or elements being observed.

IMPLICATION OF VARIED CONSUMER BEHAVIOUR

Consumer behaviour varies from one individual to another individual. In
conclusion, the following is a list of varied consumer behaviour implications :

1. In most settings and for a major portion of all buyers, strong brand loyalty
is unattainable. Unproductive efforts to increase market shares and / or brand
loyalty should be avoided.

2. When large numbers of buyers want a different brand on successive purchase
occasions, a dominant market share cannot be attained by a single brand.
Instead, carefully positioned multiple-brand or multiple-product offerings are
required.

3. Buyers' needs for information and stimulation determine the rate and type of
new product introductions that should be made in product classes dominated by
direct, interpersonal variety motives.

4. Buyers' needs for socially relevant independence and identification
determines the types of new products and the rate with which they should be
introduced in product classes dominated by interpersonal motives. Not only must
the behaviour of buyers be monitored but also the behaviour of relevant social
influences must also be understood.

5. The motives for varied behaviour should be recognized and exploited in
marketing communications. For example, a small-market-share brand can emphasize
the change-of-pace or boredom-chasing benefits of occasionally switching to that
brand.

6. Since variety segments can be effectively developed, product positioning
efforts and marketing communications should exploit the homogeneity of each
segment and the between-segment differences.

7. The scope and nature of the uncontrollable and inexplicable influences must
be recognized by decision-makers to they can concentrate their efforts on those
factors which are subject to managerial control.

REFRENCES

1. Thurstone, LL. The Measurement of Value . Chicago : University of
Chicago Press, 1959.

2. Woods, Walter A. Consumer Behaviour. New York : Haddon Craftsmen,
1981.

3. Markin, Rom J. Consumer Behaviour. New York : Macmillan, 1974.

4. Mitchell, Andrew, ed. Advertising Exposure, Memory and Choice. New
Jersey: Lawrence Erlbaum Associates, 1993.

5. Olson, Jerry, ed. Advertising and Consumer Psychology. New York :
Praeger, 1986.

6. East, Robert. Changing Consumer Behaviour. London : Biddles, 1990.

7. Hansen, Flemming. Consumer Choice Behaviour A Cognitive Theory.
New York : The Free Press, 1972.

8. Tucker, W.T. Foundations For a Theory of Consumer Behaviour. New York
: Holt, Rinehart and Winston, 1967.

9. Hamilton, Richard, and Elizabeth Ghatala. Learning and Instruction.
New York : McGraw-Hill, 1994.

10. Assael, Henry. Consumer Behaviour and Marketing Action. California :
Wadsworth, 1987.