A Summary Appraisal of Pertinent Evidences and Outcomes, Research Paper Example

Industrial psychology is the branch of psychology that concerns itself with those matters of human relations and interactions that pertain to business and industry (Colendrino-Bucu, Guerrero, Pascual, and Mateo 17). Within industrial psychology, the subfield of consumer psychology is concerned with consumers’ purchasing habits: “factors underlying consumers’ buying habits and peoples’ responses to advertisements” (17-18). Social psychology has revealed that in fact, people engage in intricate and very complex systems of mental accounting with regard to money, and this has considerable influence on their purchasing patterns and behavior (Jarrett 277). As Jarrett explains, for most people, a curious feature of mental accounting makes it difficult to save money for the proverbial rainy day: the fact that people tend to value money that they have in their possession over money that they may have at some point in the future (277). This is one of the most important and foundational aspects of social psychology with regard to consumers’ buying patterns, because it determines so much else about what people spend, when, and why (277).

Habit is a major factor in people’s purchasing decisions: not only do people tend to buy from the same places, they also tend to buy the same kinds of products from the same brands (De Leon 330). Habitual behavior is reflexive for many people simply because it is so routine and so easy to engage in, thereby facilitating the navigation of complex situations and the attaining of desirable outcomes (330). This also contributes to brand loyalty, which is actually very difficult to distinguish from habitual buying: although the consumer may genuinely be attached and loyal to their particular brand, to a considerable extent brand loyalty serves the same function of simplifying complex decisions about what to buy (330).

Of course, price is also a very important influence on what consumers buy, when, and how much (De Leon 330-331). First of all, in the minds of many people price serves as a metric of quality or value: if an item is more expensive, customers are likely to perceive it as being of higher quality than another, similar but lower-priced item (331). This aspect of consumer behavior has encouraged some companies to start charging more for their products vis-à-vis competitor brands, in order to manipulate customers into buying their products on the assumption that they will be of higher quality (331).

Another time-tested trick for vendors and manufacturers is the introductory sale: offering some new item, whether a product or a package, at a discount price for a limited period of time (De Leon 331). The aim here is to attract customers with the lower price, encouraging them to try the product or package and become habituated to it, such that they will continue to buy it at the regular, non-discount price when the sale ends (331). However, De Leon notes that “in practice… this does not seem to work”, inasmuch as purchases of the item or package decrease substantially when the sale has ended (331).

A more successful technique by far is that represented by the “zero-price effect”: offering something for free, usually as part of some sort of package deal (Jarrett 279). The idea is that people will purchase the package in order to gain the free item, and it is an idea that is well-supported by actual consumer behavior (279). A more extreme example of this is the inclusion of free added features or gift items with expensive, luxury purchases, e.g. inclusion of free DVDs with the purchase of televisions and DVD players (279). This technique works with considerable effect: inasmuch as the human brain is hard-wired to find free or discount offers especially favorable, it is readily amenable to suggestion from such special promotional offers (279). In essence, the consumer’s mind fixates on the lure of free value, which tips the mental calculus of purchasing decisions in favor of making the purchase (279). Thus, purchasing decisions are heavily influenced by cognitive biases and mental shortcuts.

References

Colendrino-Bucu, Luz, Manuel R. Guerrero, Baceliza M. Pascual, and Rosalinda Arre-San Mateo. Introduction to Psychology: A Textbook in General Psychology. 2^nd ed. Quezon City, Philippines: Rex Printing Company, Inc., 1997. Print.

DeLeon, Emmanuel B. Industrial Psychology. 1993. Quezon City, Philippines: Rex Printing Company, Inc., 2005. Print.

Jarrett, Christian. The Rough Guide to Psychology. New York: Penguin Group, 2011. Print.