CONSUMER THEORY & FRAMING

Classical consumer theory and the concept of framing

Classical consumer theory and the concept of framing

Introduction

In this study, a firm makes use of rational consumer theory and designs two campaigns to attract customers towards its product. This firm produces insulation systems for different settings. Recently, it has increased the price of its product. Increased product price always has a negative impact on consumers. Therefore, the firm needs to design its campaigns in such a manner that they are effective and appeal to the consumers. The firm makes use of classical consumer theory, rationale consumer theory and the concept of framing to design two effective marketing campaigns for the insulation product.

Discussion

As a company designs its policies, it makes efforts to have an impact on the way in which people purchase products. The company is required to take into consideration the rationale behaviour of consumers, consumer theory and the concept of framing to design its different camapigns in order to attract consumers towards the product. The company needs to consider the manner in which people make decisions and choices regarding purchasing products. These are the concepts that are taken into consideration by the insulation firm as it designs two campaigns for promoting its product.

Analysis of campaigns of Insulation Firm

In the example of this study, a firm that produces insulation systems has increased the price of its product and is considering the launch of two alternative advertising campaigns.

Campaign A: If you insulate, you will save 200 per year.

Campaign B: If you do not insulate, you will lose 200 per year.

The two campaigns that are mentioned above convey the same information regarding saving energy. However, they are framed in a different manner from each other. Campaign A lays focus on the benefits of installing insulation whereas the focus of campaign B is mainly on the costs. Additionally, the concept of consumer theory and rationale consumer behaviour are also considered by those who have designed these camapigns.

Before analysing which campaign would be the most effective, it is necessary to have the basic knowledge of the concept of rationale consumer behaviour, consumer theory and framing (Olshavsky & Granbois, 1979, p. 95). The sales and marketing goals is to understand these impacts of human factors and enable consumers to have options available to them in accordance with their biases. Rationale consumer behaviour includes the psychological processes which consumers go through as they recognize their needs, determine ways to solve those needs, and make decisions regarding purchasing goods.

According to consumer theory, a consumer maximizes his well being typically in terms of a utility function that is subject to a budgetary constraint (Friedman, 2005, 1970, p. 15). The classical consumer theory has its foundation based on the idea that the satisfaction from consuming a good derives only from its intrinsic utility. Consumer preferences determine the pleasure and satisfaction that consumers receive from the services and goods that they consume. Consumers face different types of limits or constraints on their ...