The role of heuristics and consumers' market beliefs in individual decision-making
The decision-making process of consumer may be represented as the solution of the problem whether to purchase or not particular product or service. In this case the criterion of the optimal solution is the benefit that the consumer receives as the result of his purchasing decision. In order to adjust the outcome of purchasing decision to individual preferences, a person may apply various strategies intentionally or unconscionably. An important feature of such strategies is the question of whether the consumer may limit his desire or customer's beliefs to make the buying decision in accordance with the principles of heuristic.
The heuristic technique refers to a kind of solution that is not obligatory perfect or optimal but sufficient to serve the immediate objectives. The decision influenced by personal beliefs of customer may be quite reasonable if a person prefers analytical way of thinking and objective opinion concerning the value of particular product. At the same time, according to many serves, most of people tend to act in irrational way. Prescriptive theory of decision-making describes an ideal model of customer's actions. (Pecotich, & Shultz, 2014) Although in reality the human behavior does not always correspond to these models, they serve as a criterion that helps to determine which behavior is more or less rational.
Depending on a kind of product that the consumer buys, it is possible to identify different types of purchases. The following types of purchases such as extensive, impulsive, limited and familiar are usually distinguished. In extensive buying consumers carefully process the information and usually heavily involved into analyzing of value. Impulse purchases are largely determined by external conditions based on personal mood, which occurs under certain circumstances. Limited buying occurs when consumer does not have all the necessary information and therefore forced to apply heuristic or thumb rule.
Usual purchase reflects steady habits of behavior based on personal beliefs. On the one hand, such purchases carry out the function of discharging; on the other hand, consumers using these habits express their own beliefs and preferred ideas. Consumers may make decisions not in favor of the purchase. The reasons are usually moral considerations or dissatisfaction with the advertising. The importance of individually created demand for specific product should be taken into account. The process of purchasing decision begins with the awareness of personal needs by the customer. The need may arise under the influence of internal or external stimulus. Studying consumer behavior at this stage refers to analysis of his needs.
It should be noted that the byying experience influences customer's beliefs dramatically, whereas heuristics purports to overcome individual distortions or misrepresantations partially. Heuristics is usually applied to valuable, expensive purchases, whereas buying based on personal feelings is common for non-significant products. At the same time the mentioned correlation may be significantly changed by the indicators such as self-confidence or level of incomes. People with limited profits tend to use heuristics more often comparing to affluent customers. Moreover, the role of heuristics and personal beliefs depends on the type of product and effectiveness of its promotion.
It is interesting to analyze the factors influencing individual choice of the customer taking into account my recent purchase. Not long ago, I bought travel tour. I wanted to have little vacation abroad spent with my family. I was to choose the tour agency that was reliable rendering affordable services. It should be noted that I am used to rational way of thinking that is why the choice of agency was determined by its location and recommendations available online.
I applied the method of heuristics when choosing Absolute New Zealand in accordance with immediate criteria such as convenient disposition of their office. At the same time, the decision was not optimal, as I understood later. The quality of services provided by General Travel Tour was higher than in company of my choice. Nevertheless the decision did not influence outcome of my vacation and for the short term Absolute Agency seemed to be the best. It should be noted that my desire of personal comfort influenced my decision. The personal beliefs based on comments of others pointed out several alternatives of my choice. The companies such as Premier Holiday, House of Travel, Absolute, Travel Tour, and Discover New were considered to be appropriate.
It is important to determine the overall tendencies influencing the customer's behaviour while purchasing touristic product in order to present the theoretical background of my own choice. The buying process is a virtual promotion of tourist product to the user from the moment when the need for it arises in the mind, until the moment when the analysis of the carried out purchase. The tourist companies seek to make information about the services more accessible for potential clients. For the customer with analytical way of thinking, it is nessecary to identify the main sources from which clients receive information, to assess the importance of various sources for decision making. Analysis of the ratings by consumers of various tourist products allows travel companies to change the attitude of customers to their services, proving comparative advantages in comparison with offers of competitors. (Chon, Pizam, & Mansfeld, 2014, p.52) At the same time, the system of marketing tools and promotion campaign invoke personal beliefs of the clients that the particular product is valuable referring to the emotional response.
Personally for me, the emotions associated with offers presented by Absolute New Zealand influenced my behaviour dramatically. I started to imagine unforgettable trip after looking through the brochures with bright pictures and mottos. At that time personal beliefs started to get broader meaning as I almost forgot about my analytics, price calculations, and other means of spotting the best service company based on the method of heuristics.
After my choice of the touristic provider I faced with new "customer's challenge", as I needed to purchase one tourist package finding out most appropriate one from many opportunities. Again my behaviour was largely influenced by pieces of advice given by the tourist agents and their diverse promises. Initially I tried to estimate all descriptions of tours in Shri-Lanka keeping in mind various aspects such as prices, prestige, and level of comfortability. But the travel agent offered very interesting tour with the hotel located on the shore and then persuaded me to purchase it. It should be noted that the price was significantly higher than the one I expected to pay while serfing the Internet. Nevertheless many attractive options were offered that I could not even imagine before. In this particular case, my choice was not the most optimal, but it served immediate needs and was surely good. Therefore this is an example of applying heuristics in real practice.
My personal experience points out that for travel market, it is really efficient to set up promotion campaigns and include into tourist package various opportunities at increased price. At the same time such strategy is fine only for customers with additional financial resources, whereas economic clients will make purchase after thorough analyzis. The personal beliefs of the client may be influenced by providing him with option of setting up individual tour package. Travel firm needs to develop a marketing complex providing consumer with the opportunity to be completely informed about its products. (Chon, Pizam, & Mansfeld, 2014, p. 87) It is important to determine which category of consumers is a source of information and evaluate credibility of their opinion. The instruments of influencing personal beliefs should also be implemented.
References
Anthony Pecotich, C. J. (2014). Handbook of Markets and Economies. Wellington: New Zealand Press.
Bristor, J. (2013). The psychology of buyer. Auckland: Economic Press.
Kaye Sung Chon, A. P. (2014). Consumer Behavior in Travel and Tourism. Wellington: New Zealand Press.
Lee, P. (2012). The role of heuristics in purchasing. London: LPP.
