SCMHRD

CONSUMER BEHAVIOUR
HEDONICS

Hedonics article was an eye opener to understand that at the end of the day, what matters is weather our customers are happy or not. Customers have expectations. Understanding those expectations and delivering them is crucial for any business

JAYENDRA THANKI 2010C33

HEDONICS : ARTICLE REVIEW Hedonics article was an eye opener to understand that at the end of the day, what matters is weather our customers is happy or not. Customers have expectations. Understanding those expectations and delivering them is crucial for any business. Hedonomics does not replace economicsrather, the two approaches complement one another. Whereas economics studies how to maximize wealth with limited resources, hedonomics studies how to maximize happiness with limited wealth. We treat the concept of happiness as a psychological term that describes the positive or negative aspects of hedonic experience the nature of the relationship between the two approaches: An individuals experience with external stimuli depends on its magnitude but the difference between the absolute magnitude and some reference point. A positive difference leads to positive experience and a negative difference leads to negative experience. The negative experience or loss is felt more than a positive experience or gain for the same magnitude which is termed as Loss aversion Example : As a customer if I am looking for a tourism package , It is more important for me to have a quality (wonderful and enjoyable) experience with my spouse rather than going for quantity( number of places ) in the package. A good experience will make it memorable and a bad one will create complains and resistance to refer such package to anyone. Hedonic editing involves certain strategies to tackle loss aversion .Some rewards have to evaluated in joint evaluation .The customer chooses the product/ service which values more after comparing. Example: while booking tickets I would like buy platinum tickets on the top which gives me better comfort to watch the movie. But realization about this decision becomes stronger while watching people sitting in the front most rows, not so comfortable. Here joint evaluation was needed to appreciate the choice. Hedonic Adaption is an elevated feeling fading away after some time. Basic psychological adaptionlonger we are exposed external stimuli the less sensitive we become towards it. Example: When we bought an air conditioner and an LCD, we felt life was rolling out well as we were being appreciated by lifted standard of living. Over the months this feeling of having something different faded away as we got used to such things and they had become a part of our life like any appliance.

Another concept which this article talks about is Ordinization ; Once an affective event happens, consumers have tendency to rationalize it as an ordinary event and therefore dampen its affective impact. The role of multiple choices has a lot to do with consumer behavior. Unappealing meals chosen by others for fatty people make them less unhappy than if they would have chosen to buy them. Human psychology is more of risk transferring while taking decisions. We like others to decide for us in decisions where we are hesitant. Fewer options are better. Many of us become zapped while going to hypermarket on seeing hundreds of options. We are bombarded with thousands of advertisements every week. With such exposure of choices, people do become disturbed. Hedonics is very logical in identifying this aspect of consumer behavior . Example : This is relevant in our behavior when we were children or also when we are in college , we get mind boggled on seeing 6 or more options than answering a question with 3 options. We have tendency to avoid complexity.Complexity has too many trade offs. We do not like giving up options and at the same time we have to make a trade off. For example I have an option of buying an apple smart phone or blackberry or a Samsung galaxy ; having capacity to buy only one of them hence have to make a trade off among these lucrative options. We tend to form emotional attachments with the options while making the choices .when we are choosing one option over other; we feel a sense of loss of not choosing the other option. There is a concept of Cognitive utilities explained in the article -News utility- the anxiousness generated on hearing about to be experienced situation -Anticipation utility- the feeling generated upon anticipating the experience on how it will turn up -Memory utility relishing the experience Peoples happiness is so much related to these cognitive utilities. We must experience in our life a joy by relishing our happy childhood memories. Example: we have had happy experiences with parle G biscuits in our childhood which even relish positively eating them today.

Coming back to the focus that is to build a good wooden block project requires enough blocks. But simply adding blocks is not sufficient to increase satisfaction; the blocks must be used in pleasing combinations. Similarly, creating happiness requires sufficient desirable external outcomes, such as wealth. But simply increasing external desirable outcomes is not sufficient to increase happiness; it also depends on expectations about how the outcomes are distributed. The research we have just reviewed focuses on four sets of presentational variables, all involving the notion of reference. The rst set of variables is the location of a single reference point, an idea that has been widely studied in psychology. A second set of factors is evaluation mode and evaluability. In joint evaluation, each option serves as a reference point for the other. In single evaluation, people use their internal reference scale or external reference information to make evaluations. An outcome is evaluable if the evaluator has a clear internal reference scale or external reference information; otherwise, it is not evaluable. The third set of factors we reviewed is specic to events that extend over time. People can adapt to outcomes that remain stable after a change, treating the stable outcome as anew reference. However, for events those changes continuously over time, people react not only to their outcomes, but also to the velocity and acceleration of the outcomes. The last set of factors we reviewed concerns how outcomes are distributed over time..Maximizing desired external stimuli equals maximizing consumer happiness. To achieve happiness consumers need to accurately predict the affective consequence of their options and make their choices based on their predictions

As a complement to existing approaches to happiness, hedonomics seeks to enhance happiness by optimizing the relationship between external outcomes, choices, and experiences.Hedonomics challenges two commonly held assumptions: First, increasing desired external outcomes (such as wealth) approximates increasing happiness, and, second, the assumption that what people choose is what makes them happy. Correspondingly, it studies how external outcomes actually affect happiness and why and when decisions fail to maximize happiness. A better understanding of these topics will enable individuals to maximize their own happiness holding income and other objective material goods constant, companies to maximize their employees happiness holding payroll constant, and governments to maximize their citizens happiness holding gross national product constant.