The Meaning of Consumption Activities in Daily Life
The theory of consumption is one of the fundamental disciplines of microeconomics. It explores the economic decisions, especially in the area of consumption by private economic agents. The behavior of the consumer (buyer) in the market economy is based on the theory of demand (consumer behavior theory), which is based on how and how our needs are converted into a certain amount of demand; how from a variety of benefits we choose what suits us. Consumer behavior is the process of formation of the market demand of buyers offering a choice of benefits taking into account the existing price. Consumer choice depends primarily on their needs and tastes, habits, traditions, that is, from the consumer's preferences, which are based on the recognition of the advantages of one over the other is good. Consumer choice depends on not only its preferences but also the price of selected products, as well as his or her limited incomes and opportunities. The consumer behavior during the decision-making process is a complex process that depends on many psychological and economic factors that are influenced by many factors (Beresford and Sloper, 2008).
Practical unbounded consumer needs and limited resources make it necessary to select certain types of goods. Consumption theory is based on the assumption that the agent commits to meeting all its tangible and intangible needs. Satisfying needs are the main purpose of economic activity. The more it succeeds agent, the higher the benefits as an economic concept. Private agents have individual preferences, which differ from each other. These preferences are made up in the hierarchy, which means that certain economic benefits to agents associated with higher utility than other benefits. The same applies to the combination of several benefits in relation to other combinations of benefits.
Practical unbounded consumer needs and limited resources make it necessary to select certain types of goods. The utility of the good is the satisfaction felt by the people in the benefits of consumption. In economic theory, allocate the total utility and marginal utility of the good. Total utility is the total benefit value of all units of the good or the general utility of the entire consumer basket. Marginal utility is a number of additional benefits the utility of one unit of additional consumption benefits. Thus, the benefit of the consumer in some way determines the degree of usefulness of the benefits of consumption, and knowing the usefulness of different goods, he can make a choice from a variety of benefits. This option is good to be the best, that is, to bring him the greatest utility and the greatest degree of satisfaction.
There are many theories to explain consumer behavior in the selection and purchase of goods or services from both an economic and psychological side. Teoriya rational choice creates a theoretical framework that helps to understand and model the economic and social behavior (Blume and Easley, 2008). According to this approach, rationality is understood as a human desire to get more and thus spend less money as possible - is considered to be the main drive in the processes of decision-making by individuals. A rational person does not suffer from envy, but he is not ready to lose something that wants to own (Rawls, 2005). At the same time, it is not necessary that a person should increase his or her profits at the expense of others. The personal benefit depends on the cooperation or conflict between rational individuals in decision-making. Although collective actions and decisions may involve additional costs due to the different levels of the individual interacting, it is a corporate action that demonstrates the results that are not available for individual action and cushion the negative consequences of certain actions of others. Thus, from the perspective of rational choice, it can be concluded that corporate actions are useful and the individual is likely to have agreed to comply with certain rules if the expected benefits outweigh the costs.
Theory by George Loewenstein of goods learning model can be theoretically basis for the study of consumer behavior. It states that the difference between the phases of consumer decision-making is artificial. It is believed that consumption takes place unconsciously, under the influence of standards and norms of behavior, and consistent and targeted solutions are rather an exception to the general rule. Thus, such purchases as food in catering establishments were unplanned and spontaneous and committed under the influence of conditions of concrete day. This model emphasizes the theory that an analytic function of the human psyche is not shown in full at the time of decision-making on a particular purchase. The assumption is that consumer choice is always selfish and the rational consumer does not explain the motivation for buying alcohol, for example (Kardes et al., 222). Thus, the data collected show that the purchase of beer was carried out in the afternoon and was not required to the planned shopping list for the day. Certain emotions are not conscious in the process of consumption. The process involves the study of consumer goods products, defining their functions and utility from their use, but consumers do not always think about it, to make purchases. Consumers often draw attention to the significant attributes for it. customer preferences play an important role in the unconscious and the conscious selection of goods. Purchase of beer, in this case, is rather an unconscious choice.
The theory of decision-making may explain the mechanism of the fulfillment of consumer choice. Solutions consist of numerous evidence and arguments, which provide the most advantageous option. The consumer usually attaches great importance to this evidence in the process of purchase. to help us one kind of the most favorable option. An example of well-considered purchases is VSCOcam filters for photo processing, as they are important for a hobby and help to improve the level and quality of pictures, which are then distributed in Instagram and provide a well-known author. When evaluating options to decide people attach great importance to each and every piece of evidence, which will help in this process. However, the disproportionate effect occurs when part of the evidence is abnormal (Baron & Byrne, 1997).
Impulse Purchase Model theory explains the impulse purchases that consumers make spontaneous. Ill-considered purchase, scheduled directly before the purchase can be considered a food purchase in KFC. After such a purchase, the consumer is experiencing emotional reactions (Parboteeah, 2005). This type of purchase is not connected to the sound coincides with the rational decision-making (Tinne, 2010, p. 72). Often, buying a model consumer uses under the influence of advertising, and when it takes the desired product is experiencing positive emotions. Sandwich of famous catering establishments is a nice buy for the consumer. Thus, the emotional component plays an important role in such decisions. There are two basic types of impulse purchases: an unexpected purchase, for example, the purchase of goods and planned additional (sandwich and ice cream) and unplanned variety of goods. Buying pants also apply to impulsive purchases. According to this model, it is seen as the great recreation for people. It can be assumed that such a model of consumer behavior is one of the most common when choosing shopping as an emotional component is important in decision making.
The idea of self-regulation theory is that not everything that the consumer wants to buy, is not always beneficial and helpful for him. Sudden desire can lead to unwise decisions that may affect the distribution of income of the consumer. Thus, buying a shirt at the weekend is a sudden unreasoned purchase. Thus, self-regulation actions and thoughts of consumers are needed in order to keep them from the negative effects (Baumeister et al, 1994). Being aware of the desires, the consumer will be able to avoid unnecessary or disadvantageous purchase.
However, it should take into account the income of the consumer. Consumer choice is the choice of maximizing total utility in the context of limited resources (income). Thus the theory of consumer consumption is associated with the analysis of three issues: the total utility, income, and prices.
Rational consumer consumption suggests that the consumer maximizes total utility in the conditions existing in his budget constraint. The consumer is in equilibrium when he or she cannot increase the total utility of that amount of their income and current prices, increasing or decreasing the purchase of one or another product. Purchase of inexpensive food products and pants at a discount provided an opportunity to make more expensive purchases, such as beer and filters for photo processing.
Appendix
CONSUMPTION DIARY
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Day 7
Works Cited
Baron, R. A. and Byrne, D. Social Psychology, 8th edition. Boston, MA: Allyn and Bacon. 1997.
Baumeister, R. F., Heatherton, T. F., & Tice, D. M. Losing Control: How and Why People Fail at Self-Regulation. San Diego. CA: Academic Press. 1994.
Beresford B. and Sloper T. Understanding the Dynamics of Decision-Making and Choice: A Scoping Study of Key Psychological Theories to Inform The Design and Analysis of the Panel Study. 2008. Web.
Blume L. E. and David Easley D. "Rationality", The New Palgrave Dictionary of Economics, 2nd Edition. Palgrave Mcmillan. 2008.
Kardes F., Cronley M. and Clinep T. Consumer Behavior. Cengage Learning, p. 222-223. 2014. Web.
Parboteeah, D.V. A Model of Online Impulse Buying: An Empirical Study, Doctoral Dissertation. Washington State University. 2005. Web.
Rawls, J. A Theory of Justice: Original Edition. Belknap Press. 2005.
Tinne, W. S. Impulse Purchasing: A Literature Overview. ASA University Database. 2010. Web.
