Psychology of Consumers During Consumption of Products or Services

Personally I am no student of Psychology, however have always found this subject and its associated reads quite fascinating (I have similar fascination for two other subjects – Law and History – although those are also not my main area of expertise).

Last week I read an interesting article on what kind of psychology drives the consumption amongst we human beings. The article titled “Conceptual Consumption” by Dan Ariely and Michael I. Norton was a fascinating read on this subject in which they break the psychology of consumption into two distinct parts – the Conceptual Consumption followed by the actual Physical Consumption. They argue that it is the Conceptual Consumption which typically drives the consumer towards the Physical Consumption, especially in the modern times.

The notion of how human beings finally consume anything physically is increasingly getting driven how they consume the same thing conceptually first. Increasingly what we buy and consume is simply not the actual thing, but also the idea which is embodied in that thing. The way we relate to this idea – either positively or negatively – finally results in the consumption i.e. the physical consumption. As an example – I have to believe that Consumers are buying ‘green‘ cars like Honda Prius for more varied reasons than just that it gives a better mileage i.e. there is a strong Conceptual Consumption which is driving the final consumption of these cars.

For me this article provided lots of interesting learnings which I am trying to summarize in brief below  –

  • Advertisements or Marketing do set up Consumer’s Expectations with the product. These expectations can finally influence or supersede the actual physical consumption of the product or the service – both positively or negatively. People tend to seek confirmation for their beliefs – and any mismatch in the expectations and actual behavior of the product or the services – can potentially be disastrous to the product or the service.
  • Our concepts about a product or a service also drives the consumption experience too. If we think about the product favorably, our experience of the consumption is also going to be favorable only. For the same product, if our initial perception of the product has a negative bias – the experience also can be unfavorable.
  • The placebo effects in consumer behavior: Human beings – for reasons unknown – demonstrate this peculiar behavior where they tend to derive a better consumption experience because of totally unrelated associated factors. The study of students who bought the energy drinks at discounts performing worse than the students who bought the drink at full price seems to be very interesting.
  • Goal and momentum seems to have a positive impact on the physical consumption. As pointed by the paper, researchers have shown that just to consume a goal and with a push of initial momentum, consumers when faced with goal-evoking marketing promotions have increasingly shown to vary their consumption behavior in a positive manner. The authors point to the research where consumers responded more favorably to loyalty cards requiring ten purchases (and having two already purchased) than to the loyalty cards which required just eight purchases.
  • Equally true is an interesting corollary of the above point. Desire to consume a completed goal seems to have reduced consumer’s typical physical consumption. What does this mean? As an hypothetical example – consider that for the consumers whose typical average spend is about $4, receive a coupon of a dollar off for a purchase of $2. Authors point out that in such cases, consumers seem to have purchased much below the typical average spend. If the consumer had a goal of $4 worth of purchase while the loyalty card goal was much below than that, it looked like the consumers did not have felt the push for the goal and hence the consumption seems to have been affected in a negative way. In such cases, the goal-evoking marketing promotions typically tend to affect adversely.
  • Consuming Fluency: The easier it is for the consumer to consume it conceptually, better is the value which a consumer estimates on a product or a service and equally better is the final physical consumption. As an example, the author quotes the study where consumer investors seem to have valued and consumed stocks with fluent (or pronounceable) ticker names more than the ones which were not.
  • Non-fluency: Once again, as a corollary to the above point, as the fluency of consumption conceptually reduces, the physical consumption also reduces. Consumers seem to defer making choices on the consumption in order to avoid conflicts or regrets arising because of the decision.
  • Consumers have shown tendencies to sacrifice or be dissatisfied with their physical consumption to an extent when exposed to wider range of varieties initially. Even then studies have shown that consumers will increasingly seek variety possibly because of social pressures. This is an example where the consumers are willing to indulge in conceptual consumption more even if their experiences with physical consumption of the same product has been not to the mark. Same is true when the product or service itself has many features.
  • Forgoing Physical Consumption: If the consumers have truly enjoyed the consumption of a product or a service, there is a very good chance they would forgo another chance of consumption of the same service in order to safe-guard the memories and the possible fear that the future experiences may not be as good as the previous one.
  • Any thoughts or memories of contamination affects the physical consumption of the product or the service in a negative manner even if there is no actual contamination of the product or the service. The authors give an example that even a tightly bottled drinks briefly in contact with a sterilized cockroach can affect the final consumption of the drink.
  • There are several scenarios where consumers have preferred to choose negative physical consumption for the sake of getting a positive conceptual consumption experience. Mountaineering, bungee jumping, etc. are some examples of such scenarios.

As part of current job, I have to think a lot about various kinds of products and services which could potentially catch the eyes of new sets of customers and hopefully get consumed too. With that in context, study of this paper has been fascinating exercise for me to understand how best to serve different types of end-user preferences. If we were to think about it, almost all of us in our profession are producing something which is going to get consumed by someone else. If we can all understand the philosophy behind consumption, there is a very good chance that we all can deliver our services/work in a much better manner.

Thoughts and comments are most welcome.

[Update, October 5, 2009] If you like the above article, check out another interesting article on similar thought process titled “Advertising on the Brain” by Greg Satell. It talks about how advertising works neurologically on human beings.

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One Response to “Psychology of Consumers During Consumption of Products or Services”

  1. Software Services Organizations calling Mother Earth – “Houston, We have a Problem!” « Manish Rathi's Blog Says:

    […] are inherently conflicting offerings. (Anyone who has read my previous blog post – “Psychology of Consumers During Consumption of Products or Services” and the associated article would probably agree with my view […]

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