Academic literature on the topic 'Marketing consumer goods'

It process of the Product should be reach ultimate consumer nothing but marketing. We use a large variety of goods and services in our daily life. We know that the businessman produces goods and services for our use. These are not necessarily produced at the places where they are consumed or used. While the obvious purpose of internet marketing is to sell goods, services or advertising over the internet, it’s not the only purpose a business using internet marketing may have a company may be marketing online to communicate a message about itself brand or to conduct research.

The advent of digital marketing has revolutionized the way consumers interact with electronic goods. This study investigates the impact of digital marketing on consumer behaviour of electronic goods in Coimbatore City. A survey of 300 consumers was conducted to gather data on their online shopping habits, social media influence, and digital advertising effectiveness. The results show that digital marketing significantly influences consumer purchasing decisions, with social media and online reviews being key drivers. The study also reveals that Coimbatore consumers are increasingly relying on digital channels for product research and purchasing. The findings have implications for electronic goods marketers, highlighting the need to develop effective digital marketing strategies to engage with consumers in Coimbatore City.

As an emerging marketing model, blind box marketing has been sought after by consumers and various industries. Based on the consumer purchase process of blind box, this paper takes Pop Mart, the leading blind box brand, as an example, carries out a consumer behavior analysis including motivation generation, information collection and selection, purchase process and post-purchase behavior, and discusses the principle of "blind box marketing". Consumers do not know what is the specific toy before purchase. The uncertainty of probabilistic marketing incentives, as well as the pricing method of sales channels, hit the consumers' psychology, bringing a sense of excitement for consumers, further stimulating the desire to consume, and enhancing user loyalty. Finally, this paper explores the use of "blind box marketing", and categorizes and analyzes its applicable products. Due to its price, and consumer preferences, FMCG (Fast Moving Consumer Goods) products are more suitable for the "blind box" marketing model, while products with strong functionality or luxury products are not suitable for this model.

Consumer behavior is center of modern marketing, understanding his behavior is  quite essential for efficient and effective marketing management. Customers may state their needs, wants but act otherwise. They may not be in touch with their deeper motivations. India’s consumer market is riding the crest of the country’s economic boom. Driven by a young population with access to disposable incomes and easy finance options, the consumer market has been throwing up staggering figures. Marketing problem enhancing from the consumer’s behavior has a greater degree of similarity behavioral problems relating to the consumer durables. Use of durable goods is becoming increasingly popular in recent years in India. The introduction of different types of durables has also brought out many significant  changes in the tastes and preferences of ultimate consumers in recent years.

The relevance of the research topic is determined by the prospects of Ukraine's accession to the European Green Course and the resulting need to intensify efforts to form and constantly increase demand for environmental goods and services. A significant role in this issue is given to environmental marketing, namely – the study of consumer behavior of environmental goods and services, environmental market segmentation, selection of target groups and development of marketing strategies for each of them. Much attention is paid to these issues in our work. The article also contains a theoretical analysis of different approaches to the formation of a model of consumer behavior of environmental goods and services. We focused on the peculiarities of the application in environmental marketing of economic, psychological and social approaches to the formation of behavioral patterns of different groups of consumers in relation to the environmental friendliness of goods. We also considered the features of marketing strategies to attract different groups of "green" consumers and the main tools of environmental orientation of the consumption structure. Last one include eco-labeling, eco-branding, consumer information orientation on sustainable products, editing consumer choices and nudge. We made a conclusion that consumers of ecological goods should be considered as a dynamic structure that is constantly changing based on the growing awareness of buyers and their understanding of the problems of sustainable development and requires constant monitoring. In Ukraine, "green buyers" can be an excellent target group of high-value market segment, which is not yet sufficiently developed. The use of environmental marketing tools will help direct consumer demand for sustainable products and stimulate the development of environmental entrepreneurship.

Background: Social media advertising strategies have radically changed how brands interact with consumers and cultivate brand loyalty. The study's principal objective was to identify the influence of social media marketing activities on consumer brand loyalty toward shopping goods. Methods: The study used primary data from a structured survey questionnaire with the six-point Likert scale sent to Nepalese customers. The study's sampling was convenient, and the Kathmandu-based location was chosen as the sample site. The study's population was the consumers of consumer shopping goods. People who purchase consumer shopping items were given 600 surveys, but only 395 usable questionnaires were collected. Results: Through the path analysis, the influence of the credibility of social media significantly and positively influenced brand loyalty (β = 0.165, p < 0.05). It was also found that the informativeness of social media significantly impacted brand loyalty toward consumer shopping goods (β = 0.130, p < 0.05). Likewise, it was also investigated whether social media entertainment significantly impacts brand loyalty (β = 0.426, p < 0.05) toward consumer shopping goods in the Nepalese market. Conclusion: By leveraging the power of social media venues to engage with customers, deliver pertinent content, and create personalized experiences, businesses may cultivate a strong emotional connection with their target audience, increasing brand loyalty and trust. Novelty: The study results show how future researchers and business people can look at the new conditions for market growth.

The modern stage of economic development of the domestic consumer market, its new patterns and priorities, change of regulation and saturation factors, and transformation of the paradigm of resources and goods provision stipulate the need to improve all the components of its functioning mechanism with the mandatory use of marketing instruments. Therefore, the research of the consumer market condition and development trends as an important component of the general economic system becomes increasingly important. On the one hand, the current condition of most segments offering food and non-food products is considered as unstable and demonstrating negative tendencies related to a sharp decline of previously achieved volumes of supply and sales, reduction of the material basis for production and realization of high-quality goods, and substantial noncompliance with the needs of the population. On the other hand, the paces of innovative changes regarding the methods of production and realization of consumer goods that correspond to global standards, including the use of advanced marketing strategies and Internet resources, are high. The paper aims to substantiate the nature and reasonability of the use of the marketing approach in the system of organization of domestic market provision with consumer goods. Improvement of the quality of life by verification of the safety and quality of food is determined to be the major task of the consumer market regulation. The nature of marketing activity is proven to lie in the stimulation of demand and its forming, as well as stimulation of consumer goods production and creation of conditions for their quality and competitiveness maintenance. The tasks of the marketing activity in the system of organization of domestic market provision with consumer goods are directed at the qualitative meeting of consumer needs of the population by the use of various marketing technologies and approaches. Marketing approaches to the organization of the domestic market provision with consumer goods are outlined. Marketing methods of analysis and determining of production volumes and consumers’ needs on the domestic consumer market are defined.

The luxury consumer market in my country is developing rapidly. However, due to the differences in the culture and consumer psychology of different regions in my country, the marketing status of luxury goods in my country will be different in different regions. Under the premise of analyzing consumer groups, it deeply analyzes the factors that affect the luxury consumption psychology of Chinese consumers, expounds this psychological state, and then analyzes the problems existing in my country’s luxury goods marketing. Finally, based on consumer psychology, suggestions on luxury marketing related to these issues have been put forward. In addition, quantitative research on marketing and how to psychologically open a new chapter of marketing in the luxury goods industry have always been the core themes that foreign marketing researchers will continue to explore for a long time. The logo model is an excellent analysis in this process. By introducing the principles of the logo model and applying this model to the empirical study of domestic consumers’ choice of a specific luxury brand, it is shown that the logo model can be used to analyze many problems in marketing research. More useful quantitative information is undoubtedly of great benefit to the academic research of marketing and the practice of marketing management.

This study was conducted to examine the effect of marketing mix on the consumer purchase decision of fast-moving consumer goods (FMCG) in Akwa Ibom State, Nigeria. The survey research design was used in this study. Data for the study were obtained through a structured questionnaire administered to the respondents. The population of the study comprised all the consumers of fast-moving consumer goods (FMCG) in Akwa Ibom State. The sample size of 308 respondents were selected using convenience sampling technique. Four hypotheses were formulated and tested using Spearman Correlation at 0.05 level of significance. The findings of the study revealed that there is a positive and significant relationship between marketing mix-product, price, place, promotion and consumer purchase decision of fast-moving consumer goods (FMCG) in Akwa Ibom State, with the correlation coefficient (r = 0.479), (r =0.573), (r = .0.720) and (r = 0.623) respectively at the significant value of 0.000 (p>0.05). Therefore, it is concluded that marketing mix plays an important role in influencing the consumer purchase decision of fast-moving consumer goods (FMCG).

Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, 2002.<br>Includes bibliographical references (leaves 84-87).<br>The Consumer Packaged Goods (CPG) industry has existed for decades with a high household penetration. Individual firms started out as small family owned businesses and then gradually became more "industrialized" via acquisitions. Historically, a low capital cost of entry, as well as high geographic dispersion encouraged fragmentation of competition. Overcapacity encouraged product proliferation; relatively low profitability produced little innovation, reducing the overall loyalty of consumers to CPG products today. Consumer habits changed quickly with the introduction of new offerings, further pressuring CPG manufacturers. A key CPG issue today is how to reduce cost base and overcapacity to enable investment in innovation, and branding. Cost reduction is expected from simplification (SKU's, products, lines etc), capacity consolidation, and a reduction in the fixed cost component of production. It is the belief that value creating innovation in the industry will enable the CPG industry to regain relevance and loyalty with the consumer while being more efficient (reducing costs), and enabling the investment necessary to sustain profitable growth. The annual organic growth in the CPG industry ranges between 2-6%. This thesis analyzes the effects of technology on marketing, as a value creating catalyst for profitable growth. The analysis starts with a review of the frameworks on strategy proposed by Hax, evolutions in consumer shopping behavior by Falk, as well as developments in technology based marketing by Coviello. The thesis further reviews practical technology applications currently in the CPG field. The consumer survey section in the thesis evaluates three technology device concepts (FAST LANE, PRODUCT GPS, and AUTO REORDER) that were developed using technology lead-users. The information presented and conclusions argued in this thesis suggest that the technology device concepts have a strong value creating effect in marketing and on the business; a benefit that is appropriated to the consumer, the retailer, and the CPG manufacturer. The final pillar in the survey is an interview with two major retailers in the Boston area that validate the potential and willingness to implement such mutually value creating programs.<br>by Roger V. Chacko.<br>S.M.

In the last 10 years, mobile phones have gone from being an exclusive almost unnecessary high-tech device to being an everyday item, used by billions of people around the world. The technology evolution has changed phones from a suitcase sized mobile phone imitating its stationary counterpart, to a small communication device that can perform more than twenty different tasks and is usually less than half the size of the a traditional fixed phone. With this massive adoption of mobile phones come business opportunities. One of these opportunities is to make use of its potential as a large scale marketing communication channel. Marketing via the mobile networks, presents a large target audience that can be compared to broadcast media such as television and radio, but despite this can still be a personal channel and hence compared to direct mail or one-to-one marketing. Many, both successful and failed, mobile marketing schemes have been tried, but without any definite answers and no clear action plan. Considering that much of the success of Procter &amp; Gamble can be attributed to the company’s skill in mass marketing, there is a need within the company to research the potential advantages and disadvantages of mobile marketing. This thesis explores whether or not mobile marketing is mature enough to permanently introduce it to the marketing mix of the company.<br>Under de senaste åren har mobiltelefonen gått från att vara en exklusiv nästintill onödig lyxtillbehör till att idag vara en alldaglig sak som används av miljarder människor runt om i världen. Från att ha varit stora som portföljer och mestadels försökt imitera de stationära telefonerna, har mobiltelefonen idag blivit ett mycket liten kommunikationsverktyg som kan genomföra mer än tjugo olika uppgifter och som oftast är hälften så stor som en vanlig telefon. Med denna väldiga tillväxt av mobiltelefoni kommer också affärsmöjligheter; en av dessa möjligheter är att marknadsföra storskaligt via detta nya medium. Det mobila nätet når en stor målgrupp som närmast skulle kunna jämföras med den som televisionen eller radio når. Den stora skillnaden är att med mobiltelefonen kan man göra denna kommunikation personlig som närmast skulle kunna jämföras med direkt reklam. Flera mobila reklamkampanjer har testats; både lyckade och mindre lyckade. Dessa kampanjer har dock oftast analyserats dåligt eller inte alls. Med tanke på att företaget Procter &amp; Gamble mestadels har lyckats med sin affärsidé är på grund utav sin skicklighet inom marknadsföring, finns det nu ett stort behov av att ta reda på fördelarna och nackdelarna med mobil marknadsföring. Detta examensarbete undersöker om mobil marknadsföring är mogen nog för att permanent ta en plats i företagets marknadsförings mix.<br><p>This is not identical to the version that was defended. There is one sentence deletion from the Acknowledgements section.</p>

<p> The purpose of this study was to analyze the relationships between four different theoretical viewpoints &ndash; categorization, congruence, perception-of-fit, and product involvement &ndash; and their effects on consumer evaluations of brand extensions of nondurable goods and the underlying factors of how attitudes are transferred from the parent brands to its product extensions. </p><p> By using the single-step multiple mediator model by Preacher and Hayes (2008), the findings suggested, in general, that (1) a more positive effect of congruence, perception-of-fit, and product involvement between the parent brand and the product extension, the more the positive the attitude-toward-product-extension when there was an effect of the attitude-toward-parent-brand on the four intervening variables, (2) a more positive effect of categorization, congruence, and product involvement between the parent brand and the product extension, the more the positive the attitude-towardproduct- extension as a result of the direct effects of the four intervening variables on attitude-toward-product-extensions, (3) congruence and product involvement were mediators, and the results showed that the direct effect of attitude-toward-parent-brand on attitude-toward-product-extension was statistically significantly different from zero, (4) the result on the direct effect of attitude-toward-parent-brand on attitude-toward-productextension was not statistically significant at the 0.05 level, and (5) the result on the total effect of attitude-toward-parent-brand on attitude-toward-product-extension was statistically significant at the 0.05 level. Managerial implications and recommendations were addressed and suggestions were made for future research. </p><p> </p>

The research study is on the green marketing but specifically on consumers’ attitudes and purchase intention of eco-friendly products. It has been the global concern for the purpose of the preservation of the polluting and degradation of environment. Many studies have been done on the green marketing exploring the importance of the topic and relationship to the attitude and purchasing behavior of the consumers of eco-friendly products. Through the vital information provided by the expertise, competent and experience researchers, companies have understood the importance of green marketing in order to produce eco-friendly products and these provided much rich information for the literature studies of the thesisThe objective of this research was looked into and explored the influencing of the four traditional marketing-mix elements, satisfaction and word of mouth (WOM) on attitude and purchasing intentions of consumers on eco-friendly products specifically fasting moving consumer goods (FMCG) or non-durable ones. The purpose of the study was to obtain information from consumers’ point of view. Furthermore, one perspective of the study was to look into the comparison of the Swedish and the Non-Swedish their attitudes towards eco-friendly products. A questionnaire provided to obtain the views of the Swedish and others nationalities, how they are influenced by the marketing-mix elements (4P), satisfaction and WOM concerning green attitudes and purchase intention of eco-friendly products. A quantitative approach was adopted for the study by using a questionnaire, one paper version and another online version the total sample was composed of 174 respondents, 81 were collected through internet by using Google.doc surveys and Facebook and 93 by using standard paper questionnaire form. Furthermore, convenient sample was used to collect data so the chosen boundary was Umeå University and its residents.Our findings indicated that consumers who already bought eco-friendly products and those who are satisfied by these previous purchases were willing to repeat purchases. Indeed satisfaction goes with purchase intention. Furthermore the importance of WOM and Advertising about green products the fact that consumers believe in green claim explain the variance of the purchase intention. Positive attitudes concerning willingness to pay an extra price for green products are also correlated with purchase intention. However we discovered also that positive attitudes towards green products do not always lead to action i.e. purchase of these products. Our findings demonstrated that there were differences in attitudes and purchase intention toward green products between mainly the women and men and between the Swedish and the Non-Swedish.

The issue of dimensions of quality has received very little attention in the marketing literature. This dissertation studies the impact selected individual dimensions of quality has on firm performance. The study examined the relation between product, service and image based dimensions of quality and firm performance. The performance measure utilized in this study was a firm's return on investment (ROI). Sample for the study included Strategic Business Units (SBUs) involved in the manufacture of consumer goods and industrial capital goods. A theoretical framework that details performance effects of selected variables was developed. Drawing upon previous research in Marketing, Management, Economics, and Strategic Planning, propositions and hypotheses were developed. The data required to test the hypotheses was obtained from the PIMS data base of the Strategic Planning Institute. Several GLM procedures including ANOVA, ANCOVA, and Multiple Comparison tests, such as SNK, Tukey and Bonferroni, were employed to test the various operational hypothesis. The results show that product and image based dimensions of quality impact RoT differentially for consumer goods and industrial capital goods. The extent of the difference depends on the order of market entry and the product's stage in the product life cycle. On the other hand, service based dimensions of quality did not impact ROI differentially for pioneers and non-pioneers. Similar results was found across stages of the product life cycle.

In this dissertation, I study how consumers influence each other in the adoption and engagement of digital goods. In the first essay, I study peer influence in mobile game adoption. Although peer effects are expected to influence consumer decisions, they are difficult to identify in observational studies due selection bias: Friends share common characteristics and behave in similar ways even without peer effects. I use a novel approach to estimate unobserved characteristics which endogenously drive tie formation and use the estimates to control for selection, without need for instruments. This is the first paper to use latent space to reduce bias in peer influence estimates. I find that peers account for 27% of mobile game adoptions, and that ignoring latent homophily would bias the estimates by 40%, in line with previous studies. In some samples, ignoring latent homophily can result in overestimation of social effects by over 100%. In the second essay, I examine the effect of zero rating on consumer behavior in a social net- work. I use Facebook data on millions of users to quantify direct, peer, and long-term effects of zero rating, a campaign where consumers can access digital media over mobile networks for free, on social network activities. I find that zero rating does not have the same effect on all so- cial network activities. While the direct impact of zero rating is positive on all activities, users with more friends on zero rating create less, consume more, and give more feedback on content. In addition, zero rating does not have a uniform effect across consumers. Some consumers benefit more from zero rating than others, and I show that network characteristics can help identify those consumers whose network benefits the most from zero rating.

The society has changed its habits, and public demand requires a more extensive offer of environmentally friendly goods and services on the market, including more products of plant origin. New plant-based products continuously appear on the market. As competition in the segment of plant-based beverages intensifies, brands are forced into differentiating their products by including elements of sustainable marketing in their marketing materials to induce consumers into making purchase decisions and purchases. This study aims to find out which sustainable marketing elements contribute to consumer decisions to purchase and consume plant-based beverages. The article presents the results and trends based on the 1st stage of the study – a pilot survey and structured in-depth expert interviews. The pilot survey identified the key sustainable marketing elements in consumer decisions to purchase plant-based beverages: product availability at food supermarkets; advertising at point of sale indicating price discounts; healthy product composition and raw materials; convenient in-store placement, price discounts and natural raw materials, etc. Based on the results of the pilot survey, there were changes made in the consumer questionnaire, and the 2nd stage of the study – a survey of the Latvian population to find out the complex factors affecting consumer buying decisions – was launched in February 2024.

The development of information technology and the liberalization of international trade in goods and services have facilitated business operations for companies in foreign markets. Based on market research, multinational companies' management obtains information about the characteristics and needs of local consumers, which is essential when formulating a quality marketing strategy. The aim of this research is to determine the influence of consumer ethnocentrism, cosmopolitanism, xenocentrism, as well as metacognitive and cognitive cultural intelligence on consumers' decision to purchase famous world brands. Empirical research was conducted using a survey method on a sample of 322 respondents, and their responses were analyzed using statistical software SmartPLS 4. The results showed that consumer ethnocentrism has a negative impact, while consumer cosmopolitanism, xenocentrism, and cognitive cultural intelligence have a positive impact on consumers' decision to purchase famous world brands, while the impact of metacognitive cultural intelligence is not statistically significant. The results of the research provide useful information that can help companies' management in formulating an appropriate marketing strategy in the market of the Republic of Serbia.

The article considers the role of using marketing management experience in the successful functioning of high-tech sector enterprises. When entering the market of goods produced in high-tech industries, an important factor is overcoming consumer barriers associated with the lack of information about fundamentally new products, which actualizes the problem field of research. An incorrect forecast of consumer behavior in relation to new products leads to the choice of an incorrect product promotion strategy, which leads to a lack of demand for new products. The definition of high-tech products is presented and the main characteristics of these products are listed, including a short life cycle of goods, significant R&amp;D costs, etc. The article notes that the role of marketing management experience in high-tech industries is relevant not only at the micro, but also at the macro level. The costs of research and development of the Russian Federation are analyzed, the dynamics of their development over the period from 2016 to 2020 is considered. Marketing approaches are presented within the framework of marketing management experience in high-tech industries, in particular situational, process, system and structural approaches. The main characteristics of each approach are defined.

Purpose – this article aims to analyse and integrate the limitations of consumer’s decision-making and difficulties for symbolic consumption in relation to symbolic branding. It highlights the symbolic impact to goods, which influenced by advertising and 21st century consumer’s behaviour propagates hedonistic values. Research methodology – the analysis of theoretical scientific literature, comparative study of conceptions. Findings – support the idea that consumers may modify their principles about the symbolic brand depending on both their self-brand relation as well as the effect of social (both live and virtual) influence. Research limitations – it is necessary to acknowledge that the current research is limited by broad scope consumer behaviour theories and methods (we in passing analysed empirical proves). Practical implications – authors suggest that the emergence of brand subculture on consumer behaviour gives the possibility of adjusting specific marketing strategies and presents the shortcomings of current research by pointing out the trends for future empirical studies. Originality/Value – It also highlights that the consumers’ search of symbolism and meaning in brands correlated with their consumer buying decision models, and we claim it could be related to utility theory. The main aim of this article is to analyse the field of symbols in advertising – in terms of their impact on the consumption process.

Advertising work is an integral part of the commercial and marketing activities of any trading enterprise. In the context of market development and increasing saturation of the consumer market with goods and services, advertising work takes on new significance, characterized by a number of specific features. Understanding and incorporating these features helps to activate the sales process, stimulate the sale of individual products, rationalize customer service processes through the “informational support” of all its components. The power and role of advertising have long been recognized in global business. Primarily, advertising carries information presented in a concise, artistically expressed form, emotionally resonant, and bringing to the consciousness and attention of potential buyers the most important facts and details about products and services. The most common sphere of advertising activity is trade advertising, targeting goods, trading enterprises, and services offered by these enterprises. Advertising serves as a tool to compete for market share against competitors. Simultaneously, by shaping public opinion around specific products, advertising influences the formation of consumer needs. Besides advertising, consumer demand for goods and services is also influenced by the alignment of product offerings with consumer demand, the level of disposable income, and the organization of trade.

Specific Research Objective. Develop a theory of technology adoption to analyze the role of promotional tools such as advertising, product sampling, demonstrations, money back guarantees and warranties in inducing technological change. Use this theory to develop criteria for assessing the optimal use of marketing activities in launching new agricultural input technologies. Apply the model to analyze existing patterns of marketing budget allocation among promotional tools for various agricultural input industries in the United States and Israel. Background to the Topic. Marketing tools (money-back guarantees [MBG] demonstration, free sampling and advertising) are used extensively to induce the adoption of agricultural inputs, but there is little understanding of their impacts on the diffusion of new technologies. The agricultural economic literature on technology adoption ignores marketing efforts by the private sector, which may result in misleading extension and technology transfer policies. There is a need to integrate marketing and economic approaches in analyzing technology adoption, especially in the area of agricultural inputs. Major Conclusion. Marketing tools play an important role in reducing uncertainties about product performance. They assist potential buyers to learn both about objective features, about a product, and about product fit to the buyer's need. Tools, such as MBGs and demonstration, provide different information about product fit but also require different degrees of cost for the consumer. In some situations they can be complimentary and optimal strategy combines the use of both. In other situations there will be substitution. Sampling is used to reduce the uncertainty about non-durable goods. An optimal level of informational tools declines throughout the life of a product but stays positive at a steady state. Implications. Recognizing the heterogeneity of consumers and the sources of their uncertainty about new technologies is crucial to develop a marketing strategy that will enhance the adoption of innovation. When fit uncertainty is high, allowing an MBG option, as well as a demonstration, may be an optimal strategy to enhance adoption.

Executive Summary This report describes a series of experiments carried out by PRICE Lab, a research programme at the Economic and Social Research Institute (ESRI) jointly funded by the Central Bank of Ireland, the Commission for Energy Regulation, the Competition and Consumer Protection Commission and the Commission for Communications Regulation. The experiments were conducted with samples of Irish consumers aged 18-70 years and were designed to answer the following general research question: At what point do products become too complex for consumers to choose accurately between the good ones and the bad ones? BACKGROUND AND METHODS PRICE Lab represents a departure from traditional methods employed for economic research in Ireland. It belongs to the rapidly expanding area of ‘behavioural economics’, which is the application of psychological insights to economic analysis. In recent years, behavioural economics has developed novel methods and generated many new findings, especially in relation to the choices made by consumers. These scientific advances have implications both for economics and for policy. They suggest that consumers often do not make decisions in the way that economists have traditionally assumed. The findings show that consumers have limited capacity for attending to and processing information and that they are prone to systematic biases, all of which may lead to disadvantageous choices. In short, consumers may make costly mistakes. Research has indeed documented that in several key consumer markets, including financial services, utilities and telecommunications, many consumers struggle to choose the best products for themselves. It is often argued that these markets involve ‘complex’ products. The obvious question that arises is whether consumer policy can be used to help them to make better choices when faced with complex products. Policies are more likely to be successful where they are informed by an accurate understanding of how real consumers make decisions between products. To provide evidence for consumer policy, PRICE Lab has developed a method for measuring the accuracy with which consumers make choices, using techniques adapted from the scientific study of human perception. The method allows researchers to measure how reliably consumers can distinguish a good deal from a bad one. A good deal is defined here as one where the product is more valuable than the price paid. In other words, it offers good value for money or, in the jargon of economics, offers the consumer a ‘surplus’. Conversely, a bad deal offers poor value for money, providing no (or a negative) surplus. PRICE Lab’s main experimental method, which we call the ‘Surplus Identification’ (S-ID) task, allows researchers to measure how accurately consumers can spot a surplus and whether they are prone to systematic biases. Most importantly, the S-ID task can be used to study how the accuracy of consumers’ decisions changes as the type of product changes. For the experiments we report here, samples of consumers arrived at the ESRI one at a time and spent approximately one hour doing the S-ID task with different kinds of products, which were displayed on a computer screen. They had to learn to judge the value of one or more products against prices and were then tested for accuracy. As well as people’s intrinsic motivation to do well when their performance on a task like this is tested, we provided an incentive: one in every ten consumers who attended PRICE Lab won a prize, based on their performance. Across a series of these experiments, we were able to test how the accuracy of consumers’ decisions was affected by the number and nature of the product’s characteristics, or ‘attributes’, which they had to take into account in order to distinguish good deals from bad ones. In other words, we were able to study what exactly makes for a ‘complex’ product, in the sense that consumers find it difficult to choose good deals. FINDINGS Overall, across all ten experiments described in this report, we found that consumers’ judgements of the value of products against prices were surprisingly inaccurate. Even when the product was simple, meaning that it consisted of just one clearly perceptible attribute (e.g. the product was worth more when it was larger), consumers required a surplus of around 16-26 per cent of the total price range in order to be able to judge accurately that a deal was a good one rather than a bad one. Put another way, when most people have to map a characteristic of a product onto a range of prices, they are able to distinguish at best between five and seven levels of value (e.g. five levels might be thought of as equivalent to ‘very bad’, ‘bad’, ‘average’, ‘good’, ‘very good’). Furthermore, we found that judgements of products against prices were not only imprecise, but systematically biased. Consumers generally overestimated what products at the top end of the range were worth and underestimated what products at the bottom end of the range were worth, typically by as much as 10-15 per cent and sometimes more. We then systematically increased the complexity of the products, first by adding more attributes, so that the consumers had to take into account, two, three, then four different characteristics of the product simultaneously. One product might be good on attribute A, not so good on attribute B and available at just above the xii | PRICE Lab: An Investigation of Consumers’ Capabilities with Complex Products average price; another might be very good on A, middling on B, but relatively expensive. Each time the consumer’s task was to judge whether the deal was good or bad. We would then add complexity by introducing attribute C, then attribute D, and so on. Thus, consumers had to negotiate multiple trade-offs. Performance deteriorated quite rapidly once multiple attributes were in play. Even the best performers could not integrate all of the product information efficiently – they became substantially more likely to make mistakes. Once people had to consider four product characteristics simultaneously, all of which contributed equally to the monetary value of the product, a surplus of more than half the price range was required for them to identify a good deal reliably. This was a fundamental finding of the present experiments: once consumers had to take into account more than two or three different factors simultaneously their ability to distinguish good and bad deals became strikingly imprecise. This finding therefore offered a clear answer to our primary research question: a product might be considered ‘complex’ once consumers must take into account more than two or three factors simultaneously in order to judge whether a deal is good or bad. Most of the experiments conducted after we obtained these strong initial findings were designed to test whether consumers could improve on this level of performance, perhaps for certain types of products or with sufficient practice, or whether the performance limits uncovered were likely to apply across many different types of product. An examination of individual differences revealed that some people were significantly better than others at judging good deals from bad ones. However the differences were not large in comparison to the overall effects recorded; everyone tested struggled once there were more than two or three product attributes to contend with. People with high levels of numeracy and educational attainment performed slightly better than those without, but the improvement was small. We also found that both the high level of imprecision and systematic bias were not reduced substantially by giving people substantial practice and opportunities to learn – any improvements were slow and incremental. A series of experiments was also designed to test whether consumers’ capability was different depending on the type of product attribute. In our initial experiments the characteristics of the products were all visual (e.g., size, fineness of texture, etc.). We then performed similar experiments where the relevant product information was supplied as numbers (e.g., percentages, amounts) or in categories (e.g., Type A, Rating D, Brand X), to see whether performance might improve. This question is important, as most financial and contractual information is supplied to consumers in a numeric or categorical form. The results showed clearly that the type of product information did not matter for the level of imprecision and bias in consumers’ decisions – the results were essentially the same whether the product attributes were visual, numeric or categorical. What continued to drive performance was how many characteristics the consumer had to judge simultaneously. Thus, our findings were not the result of people failing to perceive or take in information accurately. Rather, the limiting factor in consumers’ capability was how many different factors they had to weigh against each other at the same time. In most of our experiments the characteristics of the product and its monetary value were related by a one-to-one mapping; each extra unit of an attribute added the same amount of monetary value. In other words, the relationships were all linear. Because other findings in behavioural economics suggest that consumers might struggle more with non-linear relationships, we designed experiments to test them. For example, the monetary value of a product might increase more when the amount of one attribute moves from very low to low, than when it moves from high to very high. We found that this made no difference to either the imprecision or bias in consumers’ decisions provided that the relationship was monotonic (i.e. the direction of the relationship was consistent, so that more or less of the attribute always meant more or less monetary value respectively). When the relationship involved a turning point (i.e. more of the attribute meant higher monetary value but only up to a certain point, after which more of the attribute meant less value) consumers’ judgements were more imprecise still. Finally, we tested whether familiarity with the type of product improved performance. In most of the experiments we intentionally used products that were new to the experimental participants. This was done to ensure experimental control and so that we could monitor learning. In the final experiment reported here, we used two familiar products (Dublin houses and residential broadband packages) and tested whether consumers could distinguish good deals from bad deals any better among these familiar products than they could among products that they had never seen before, but which had the same number and type of attributes and price range. We found that consumers’ performance was the same for these familiar products as for unfamiliar ones. Again, what primarily determined the amount of imprecision and bias in consumers’ judgments was the number of attributes that they had to balance against each other, regardless of whether these were familiar or novel. POLICY IMPLICATIONS There is a menu of consumer polices designed to assist consumers in negotiating complex products. A review, including international examples, is given in the main body of the report. The primary aim is often to simplify the consumer’s task. Potential policies, versions of which already exist in various forms and which cover a spectrum of interventionist strength, might include: the provision and endorsement of independent, transparent price comparison websites and other choice engines (e.g. mobile applications, decision software); the provision of high quality independent consumer advice; ‘mandated simplification’, whereby regulations stipulate that providers must present product information in a simplified and standardised format specifically determined by regulation; and more strident interventions such as devising and enforcing prescriptive rules and regulations in relation to permissible product descriptions, product features or price structures. The present findings have implications for such policies. However, while the experimental findings have implications for policy, it needs to be borne in mind that the evidence supplied here is only one factor in determining whether any given intervention in markets is likely to be beneficial. The findings imply that consumers are likely to struggle to choose well in markets with products consisting of multiple important attributes that must all be factored in when making a choice. Interventions that reduce this kind of complexity for consumers may therefore be beneficial, but nothing in the present research addresses the potential costs of such interventions, or how providers are likely to respond to them. The findings are also general in nature and are intended to give insights into consumer choices across markets. There are likely to be additional factors specific to certain markets that need to be considered in any analysis of the costs and benefits of a potential policy change. Most importantly, the policy implications discussed here are not specific to Ireland or to any particular product market. Furthermore, they should not be read as criticisms of existing regulatory regimes, which already go to some lengths in assisting consumers to deal with complex products. Ireland currently has extensive regulations designed to protect consumers, both in general and in specific markets, descriptions of which can be found in Section 9.1 of the main report. Nevertheless, the experiments described here do offer relevant guidance for future policy designs. For instance, they imply that while policies that make it easier for consumers to switch providers may be necessary to encourage active consumers, they may not be sufficient, especially in markets where products are complex. In order for consumers to benefit, policies that help them to identify better deals reliably may also be required, given the scale of inaccuracy in consumers’ decisions that we record in this report when products have multiple important attributes. Where policies are designed to assist consumer decisions, the present findings imply quite severe limits in relation to the volume of information consumers can simultaneously take into account. Good impartial Executive Summary | xv consumer advice may limit the volume of information and focus on ensuring that the most important product attributes are recognised by consumers. The findings also have implications for the role of competition. While consumers may obtain substantial potential benefits from competition, their capabilities when faced with more complex products are likely to reduce such benefits. Pressure from competition requires sufficient numbers of consumers to spot and exploit better value offerings. Given our results, providers with larger market shares may face incentives to increase the complexity of products in an effort to dampen competitive pressure and generate more market power. Where marketing or pricing practices result in prices or attributes with multiple components, our findings imply that consumer choices are likely to become less accurate. Policymakers must of course be careful in determining whether such practices amount to legitimate innovations with potential consumer benefit. Yet there is a genuine danger that spurious complexity can be generated that confuses consumers and protects market power. The results described here provide backing for the promotion and/or provision by policymakers of high-quality independent choice engines, including but not limited to price comparison sites, especially in circumstances where the number of relevant product attributes is high. A longer discussion of the potential benefits and caveats associated with such policies is contained in the main body of the report. Mandated simplification policies are gaining in popularity internationally. Examples include limiting the number of tariffs a single energy company can offer or standardising health insurance products, both of which are designed to simplify the comparisons between prices and/or product attributes. The present research has some implications for what might make a good mandate. Consumer decisions are likely to be improved where a mandate brings to the consumer’s attention the most important product attributes at the point of decision. The present results offer guidance with respect to how many key attributes consumers are able simultaneously to trade off, with implications for the design of standardised disclosures. While bearing in mind the potential for imposing costs, the results also suggest benefits to compulsory ‘meta-attributes’ (such as APRs, energy ratings, total costs, etc.), which may help consumers to integrate otherwise separate sources of information. FUTURE RESEARCH The experiments described here were designed to produce findings that generalise across multiple product markets. However, in addition to the results outlined in this report, the work has resulted in new experimental methods that can be applied to more specific consumer policy issues. This is possible because the methods generate experimental measures of the accuracy of consumers’ decision-making. As such, they can be adapted to assess the quality of consumers’ decisions in relation to specific products, pricing and marketing practices. Work is underway in PRICE Lab that applies these methods to issues in specific markets, including those for personal loans, energy and mobile phones.