A sale requires a free offer in exchange for a freely agreed-upon purchase price between two individuals who are competent to contract with each other, and who have mutually agreed to the deal. An actual exchange or promised exchange of money is required. Finally, the object, parcel, or title being sold must be capable of being transferred by the seller. This may seem like a lengthy definition of an everyday activity, but it is the most elaborate way to describe how trade and commerce function in the world.
Want — have a desire to possess or do (something); wish for. Need — require (something) because it is essential or very important rather than just desirable. The definitions reflect how we commonly distinguish between these terms. The distinction focuses on one quality — ‘essential’. Aspiration and necessity of a consumer have to converge for them to arrive at the conclusion to buy something. Every new piece of information and discourse on decision making helps us to become better. In hindsight, we can all solve the puzzle correctly. To make a sound decision without knowing the outcome requires the right mix of expertise and experience.
Price-performance Ratio
Let us suppose you are in the market for a new mobile phone. Processor speed, screen refresh rate, and internal memory are some of the variables which will figure in your thoughts. By what method do you decide how much is sufficient for you and what extra utility will be gained by going for the higher-spec version? In all likelihood, you will arrive at the decision based upon technical and emotional grounds. If the device is for everyday use, a lower specification model will serve the purpose and save you money. Just in case, you need the device for intensive use that has the potential to increase productivity or are aflush with money, then you may opt for the ‘pro’ model. By paying for something that you may never use is not prudent consumerism.
The human brain has in-built lethargy; it wants to be part of crowd-thinking. People carelessly arrive at the conclusion that, if so many people are doing something, it must be right. The biggest cost of a mistake is to not learn from it. Living beyond means is like igniting a fire that will cause disproportionate self-harm. No one will / should / can decide what is right for you as an individual consumer. It is your right and responsibility to arrive at a conclusion after evaluating the risk-reward ratio of your choice. In a free market economy, buyers and sellers arrive at finer details and configuration after negotiation. Any device, product or service that promises to be more than what it is actually capable of, is trying to bluff its way to profit by pickpocketing the consumer, who believe it or not, is the most essential stakeholder of the enterprise.
The Role of Advertising and Influencers
You can’t make people buy what they don’t want, but you can make people buy what they don’t need. The promise, of a stainless whiter shirt, by a detergent brand or a certain furniture product that will elevate your standard, is the simplest example of how advertising professionals pull the emotional chords. The most rational person falls for such gimmicks and within no time, their actions take the form of habits.
It takes ethics and morals from a celebrity to say ‘no’ when the offer to endorse a harmful product is on the table. Some products and services adversely affect the mental and physical well-being, while others have the potential to ruin the finances of the consumer. Products and services will be sold and bought in the market anyways. When a person of repute chooses to associate themselves with a harmful product or service, they are being shamelessly irresponsible.
Power of money has made sure that virtually anyone can be persuaded to review their stance about which brands to endorse. Some well known individuals, with sparkling conscience, still exercise discretion. Don’t fall for the pitch from a celebrity. They got paid (pretty well) and you are consuming something they will never recommend to their loved ones.
Perception and Pricing
Do you wait for a product to be made available at a discount or does the discount prompt you to buy a something that never figured in your thoughts? I know, you must be thinking that, no one needs to know such minute details about your decision making. Wait a minute! I have no inclination to trespass your privacy, but as an observer of consumer behaviour, I have some information to share. If it was a necessary product or service, you would have nevertheless bought it. Just because something is available at a discount, and finds a place in your cart, you will probably regret this purchase. Living without a nonessential item is easier than living with guilt.
Now, after a mobile, you are in the market for a laptop. Let us suppose that you will be paying for the laptop and it is intended for everyday use. The device which fulfils your requirement is available for ₹40,000 ($530). Subsequently, while browsing the internet, you come across a deal where a higher spec laptop previously available for ₹60,000 ($795) is now listed for ₹50,000 ($663)
Suddenly, you feel it is an unmissable deal and buy the laptop that you don’t need by paying ₹10,000 ($132) over and above your budget. Who do you think gained from the discount offer? Is it the retailer or you? Now, this is the part where personal choice comes in to the picture. As a neutral person, I have two observations. You stretched your budget for a device that has more power than you need, while the retailer sold a higher priced product.
Time to Circle Back
Is it still difficult to decipher who came on top at the end? Those of you who received a laptop from the employer are doing the same thing, but at an institutional level. The price tag or logo of the product does not define you. Products are tools to get the job done; nothing less and nothing more. If possible, own the equity shares of the brands you use. Atleast this way you can participate in the growth of the company financially. And, the next time you see a product or service being offered at a discount, stop behaving like you have won a lottery.