Marketing researcher co-authors new book on consumer psychology
July 14, 2020
New technologies are changing consumer behavior in unprecedented ways, says a Virginia Tech marketing researcher who has co-authored a new book on consumer psychology.
“Consumers nowadays receive information from multiple media sources. They have shorter attention spans and are overloaded by and easily influenced by information,” said Rajesh Bagchi, professor and head of the Department of Marketing in the Pamplin College of Business. His new book, “Becoming a Consumer Psychologist,” is co-authored with Ashwani Monga, provost and executive vice chancellor of Rutgers University-Newark.
Consumers also process information differently, Bagchi said. Thus, some basic models of information processing developed by researchers may no longer apply when consumers are interacting with smart devices or “agents,” such as Alexa and Google Home.
“For example, most conversations involve a give and take — you say a few things, and then you listen to the other party,” he said. “But if you are in this world where you are interacting with smart agents, your mindset may be different. You are paying more attention to what the agent is saying, and you may not counter argue.”
Bagchi said consumers today have more power than decades ago, when “they could choose to either buy or not buy.” Now, thanks largely to easy access to both consumer and expert reviews and information about substitute products and brand image, “it is the customer that dictates what firms should be doing — whether it is what kinds of products they should be manufacturing or what their brand image should be.”
Discussing the impact of social media, Bagchi said that younger consumers are much more open to publicly sharing their opinions, beliefs, and other aspects of their lives.
While social media posts provide marketing researchers information and insights about consumers, such posts can also readily influence other consumers. “Their belief systems are ever evolving, and they are less likely to be as loyal to firms. This means that it is really important for managers to get it right to ensure that consumers are happy with their product or service or firm.”
Businesses can be aided by the field of consumer psychology, “which seeks to understand consumers’ thoughts, feelings, and actions as they interact with products, services, and ideas in the marketplace.”
Consumer psychologists examine the “who,” “what,” “when,” “where,” and “why” of decision-making, Bagchi said. “Who is making the decision and for whom? What is the decision — is it to make a purchase, defer it, or gather more information? When is the decision being made — early on, in a planned manner, or rushed, at the very last minute? Where is the decision made — at home or inside a store? Why is the decision made?”
Indeed, “why” is perhaps the most important aspect, he said. “If we are able to understand the factors and processes underlying consumer decisions, we can know why they like or dislike the product and how we can influence their decisions and choices.”
And: “You also can predict what they might do in the future, not just tomorrow, but maybe several months from now.”
New technologies are also helping consumer psychologists. “We have more tools to assess how consumers actually behave. We are able to conduct more realistic experiments with consequential outcomes.”
Devices such as eye-trackers, for example, allow researchers to gain deeper insights on the decision process. “Age-old questions — such as does prior interest affect attention, or does attention induce interest — can now be addressed, not just in engineering, science, and business but also in medical decision-making and cybersecurity contexts.”
Bagchi, who loved math and science as a child and had earned degrees in engineering before getting his Ph.D. in marketing, said he decided he needed to gain a better understanding of consumer decision-making after previous careers in a tech startup and as an environmental engineer.
“I realized then that even the best of products would fail if consumers do not perceive a need for it. For example, one can come up with the best greywater systems in the world, but they would fail if they could not overcome the stigma consumers associated with greywater.”
Bagchi studies the psychological processes that underlie consumer and managerial decision-making. His interests range from understanding factors that affect purchase decisions (such as planning, pricing, and ambient factors) to those that influence post-purchase disposal decisions (such as trashing versus recycling). Ultimately, Bagchi’s goal is to identify factors that not only improve consumer well-being but also help firms and society make more sustainable decisions.
Understanding how consumers make decisions has important implications for consumer welfare and public policy as well, he noted. Whether they elect to use recycled water, how they plan for retirement, make choices about their health — all are shaped by information and how it is processed and interpreted.
“Trying to understand the mind of a consumer is a genuinely fascinating endeavor,” Bagchi said. “Given that each of us is a consumer of goods and services in the world, understanding the psychology of consumers is a step toward understanding oneself.”