What Are The Human Strategies For Search And Choice?
Theories, which are directly connected with consumers, are extremely important for the market as a whole and for sellers. There are many such theories. Among them it is necessary to allocate theories of consumption and choice.
The main idea of consumption strategy consists in that the consumer aspires to satisfy all the demands: material and non-material. But as in the modern market economy the consumer is not in a condition to satisfy all his demands at once, he uses his own preferences. That is, when selecting goods, consumers choose the good that has greater utility. But on the basis of its own budget. This can be seen in the budget line, which displays a variety of combinations of two goods that a consumer can purchase, if his money income is a fixed amount.
Search strategy studies sellers or buyers who cannot instantly find each other, and must search for a partner prior to transacting. In consumer theory, this strategy can be applied to analyze purchasing decisions.
From a consumer point of view, the main criterion for selection of this or that good is a combination of high quality and low price. But it is possible only in the case of target search by the consumer of the specific good or service. If a search of the consumer is shown to one good, the factor “quality” is excluded from the environment of influence with a choice. Therefore, sellers are paying more attention to price. This is due to the fact that in the era of globalization and the very rapid development of technology, awareness of the product is so great that the consumer is focused on a particular product, and looks only for a lower price.
Based on the above, and in view of the crisis in global financial markets, these two strategies are key. Because the consumer needs to satisfy the basic needs, that is the main in a consumption strategy. As well as the need to choose a product with the lowest price with good quality, that is the main thing in the search strategy.
References:
1. Cooper-Martin, E. (1989). The Effect of Three Contingency Factors on Consumer Choice Strategies: a Test of Awareness of Costs and Benefit. Advances in Consumer Research, 16,130-136.
2. Janssen, C. W. & Moraga-Gonzalez, J. L. (2004). Strategic Pricing, Consumer Search and the Number of Firms. Review of Economic Studies, 71, 1089-1118.
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