This holiday season turned many consumers into bargain sleuths, trying to figure out the best deals, the best time to buy.... more decisions to make than ever before. But researchers say, it’s becoming clear that there’s also more to a great deal than price alone.
Rajesh Bagchi is assistant professor of marketing at Virginia Tech, who studies judgment and decision making by consumers.
“There’s a long history of research in this area, where initially, back in the day, people thought human beings are rational individuals. You know, every decision that we made, we’ve thought through, we’ve maximized all our options and we are always getting the best deal and so on.”
But Bagchi points out, rationality itself, is subjective.
“So for one person the objective may be to get the best deal possible. For another person it may be to feel happy. So I don’t want to spend the days before Christmas every day just shopping from morning ‘til night to get the best deal. I may just want to find a deal that I’m happy with and I say, ‘you know what,’ this is where I stop my search and I’m pretty satisfied and that is good enough for me.”
And Bagchi points out, the same thing is true for retailers he says. It’s not always about their getting the best price for an item.
“At the end of the day, we are in a world where it’s not about profit maximization any more. When I teach my students I tell them, if you’re a manager someday your objective is to maximize satisfaction because that is the only way you can be successful in the long term.”
So if making consumers happy is also an important factor in the art of the deal. But it’s also quite rational says Bagchi, because in the digital economy consumers have a collective voice. If one person can’t always tell if something is a bad deal, often a group of consumers communicating with each other can.