Rational Customers The Market Environment - 1086 Words

Experts Keith and Gubellini argue that consumers are fickle, and that they rarely know what they want in the market environment whereas experts Bovà ©e and Thill counter that argument stating consumers are experts in the market environment. In order to be an â€Å"expert† in the market sense, one must have rationality. Rational customers are those who know what he wants and seeks to make the most of available opportunities and resources given the scarcity constraints he faces. The term, â€Å"rational† in the traditional economic sense means the customer already knows everything there is to know about his needs and desires, the products in the market, etc.; however, that definition is nonsense. For the truly rational customer, there is a trade-off between the value of additional information and the cost required to obtain it. However for those irrational or fickle in the market setting, the result is that all decisions are based on satisfaction rather than optimizing. Furthermore, there is that â€Å"rationality† not in the sense of how one determines what to buy in the market, but in terms of what one wants. This is not to say that having rationality when purchasing goods and services is bad. The truth of the matter is that most people do not actually go in a market with this mindset, and thus consumers are fickle because they base their decisions on their desires and tastes. Keith and Gubellini state that Americans â€Å"have become accustomed to the luxury of plenty and are not as easilyShow MoreRelatedProcessual Strategy1272 Words   |  6 PagesProcessual, Rational, Fuzzy, Evolutionary 1. Processual approach: Strategy is produced in an incremental fashion, as a pattern in a stream of decisions. Fuzzy approach: Companies sometimes adopt an incremental approach to change. Whats different between these two approach? The Processual approach is really talking about strategy emerging from the many different day-to-day decisions taken by the staff. 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