Yahya Bello Extra Credit 2 Page 133 Econ 1020 Professor Leach 1. Consumers who buy fantastic brand cleaner instead of Pathmark premium All-purpose cleaner behavior would be considered as bounded rationality because they tend to make their choices that serve their objectives, but they have limited ability to acquire and process information. Consumers that buy fantastic brand cleaner can also be considered as bounded rationality because they believe in the rule of thumbs that says the higher the price of goods the higher quality of the goods will be. Since the price of Fantastik brand cleaner is higher than that of Pathmark, they apply the rule of thumbs before making a choice between the two brands. 2. Based on my own prior experience as a shopper, I can definitely agree that the rule of thumb is rarely valid with a genuine evidence from my personal experience as a shopper e.g. there was a time I bought a pair of jeans from one of my favorite stores at a very low price without considering the quality of the jeans and a friend of mine also bought the same pair of jeans from a different store at a higher price believing in the rule of thumb( the higher the price the higher the quality of the item). Unfortunately, my friend’s pair of jeans completely fades out and the zip also worn out while mine that I got from a very low price without applying the rule of thumbs still looks good and well kept. The situation suggests that all item with a higher price are of good quality,
How will a consumer decide whether to purchase a good? When a consumer purchases a good, what does this reveal?
Essentially, just because a product is priced cheaper doesn't mean it lacks in quality and just because a product is priced higher does not indicate or mean that it is of superior quality. So, moreover, you would have to truly decide if the product offers you what you need and has added benefits and features for the price being charged. According to Verma and Gupta (2004), in many instances it is thought that price is a gauge of quality. However, generally there is essentially no relationship between price-perceived quality. Furthermore, price becomes a less important measure of quality in the occurrence of other indications such as brand name and
The first threat that Canada’s Cleaners Inc. faces are large Canadian dry cleaning companies such as Parkers, Sketchley’s, and Creeds. These companies are threats to CCI because they dominate the Canadian dry cleaning market, therefore limiting CCI’s share of the market. The second threat that Canada’s Cleaners Inc. faces is the shift to casual outfits in the workplace. This is a threat to CCI because as more people begin to wear casual clothing to work, the need and demand for dry-cleaners diminishes. The third threat that Canada’s Cleaners Inc. faces is the high costs associated with disposing their cleaning chemicals. This is a threat to CCI because it is “necessary evil”, but still costs the business a larger sum of money than it should.
F. Contrast how a person would initially respond to a relatively large increase in the price of a product in the short run as opposed to how that same person might react to that same price increase over a longer time horizon (i.e., the long run), using the “Consumer's Time Horizon” concept.
I’ll consider this issue in the case study of underage drinking. The under 18s add demand to the market for alcohol; they seek to acquire what others seek to supply. They seek to fulfill what they believe to be a sensible appetite having exercised care, skill and judgement in terms of the type, quantity and price of alcohol they require. They believe their objective to be reasonable and rational. Therefore they contribute to the efficient operation of the market. The U18s are seeking to satisfy their present appetite whilst paying less regard to the externalities of this preference; this is rational and reasonable in their view. They can afford to do so and probably exclude themselves from the risks of such consumption. Similarly the action of the supplier is both rational and reasonable in their eyes expanding their market and excluding themselves from any responsibility for the customers’ subsequent behaviour.
People who are swayed by consumption typically are not conscious about their decisions and show low levels of self-clarity. Believing that products are the answer to their identity and invest their values on buying happiness. Unfortunately, that’s most likely not the case. “You, happier? No.
This report provides an analysis and gathering all requirements and information for the new system to implement on Kahuna Cleaning Supply Company, methods of analysis include interviews with employees, questionnaires, observation, collecting data from the customer.
In the first case of Pearson v. Custom Cleaners there were various legal issues presented. Mr. Pearson, believed that the signs in the window stating, “Satisfaction guaranteed” and “Same Day Service” was false advertisement. Chung, (the Defendants) argued that the signing in the window was a jester that they will go above and beyond to fix any customers problems. They believe they attempted to do so in 2002 with Mr. Pearson. Secondly, Mr. Pearson believed that Custom Cleaners practiced negligence regarding his pants as well as used unfair trade practices (Pearson vs. Soo Chung, 2008). Lastly, the issue of violating the D.C Consumer Protection Act.
Give specific examples to help support your points. The market is influenced by both options.
I thought it was a good idea to have Ms. Orbach prep the living for the Cleaning Services. She has a lot of bins with toys, shoes clothes, and other fabrics. There is a smell lingering for some of the bins where the cats used the bathroom. I had her start in the front of the living room where the flyers are mostly at, the shoe bins. I had her divide the shoes in to a three piles, Keep, May Keep and Donate. Ms. Orbach did not want to throw any of the shoes.
How do you feel when you hear that you're an irrational customer? Maybe, you might feel angry and irritated for being a irrational customer as many people think the 'irrationality' is the worst and most unnecessary human failure that leads only negative results forever. However, this view toward irrationality has to be changed. Even though there are negative results of irrationality, there are lots of positive effects of it. Of course, as the irrational consumption is not intended, it can make you use more money, but, at the same time, it can increase the whole consumption over the country, which is really necessary and important for an economic growth. Then why is increasing the whole consumption important? It’s because, in the economy, the whole consumption is almost same with the overall demand, and as you know, it makes more industries and markets - in economical terms, more
I have always been fascinated by the inner workings of the mind. Why we act the way we do in certain situations and why we act irrationally. Predictably Irrational by Dan Ariely attempts to explore and answer these questions. He covers irrationality from a variety of topics such as human relationships and market dynamics, but the implications are valid in any field that requires decision-making. Two topics that Ariely covers in the book are: the “zero price effect” and the “endowment effect.” With each of these topics, Ariely challenges the reader to rethink their current decision making process and to step outside the irrational mind of the consumer. Dan Ariely states:
There are a great many responsibilities associated with maintaining a home. Because there are so many different things to be mindful of, homeowners may overlook certain tasks which may seem minor on the surface but really do require serious attention. Cleaning the ducts in a home would fall under such a description. The reason people may overlook the condition of their ducts is because problems with dirty ducts are not immediately apparent. However, such problems can quickly turn dire which is why it is necessary to hire the services of residential duct cleaning services.
The rule of thumb is more reasonable in a situation where a particular item cost high in the market scale and consumers concluded such item to be of great quality without any full research on the particular item. E.g. A cloth made with original material will tend to be of great quality and that will be tagged with a higher price for consumers to apply the rule of thumb and get such good from the market.
14) The attitudes and behavior patterns of consumers making a purchasing decision are part of the