Tuesday, 13 November 2012

Consumer behaviour

Some of the following questions regarding consumer behaviour were drawn from several sources including Robert Frank's book "The Economic Naturalist" and Tutor2u Business blog

Consumer Behaviour
1. What determines how much people tip? Who should get tips and who should not?
2. Usually found in convenience stores, why are some ATMs paid-for cash machines and others are free to use?
3. Theatres, cinemas and sports stadiums rarely charge to use public toilets but many of the larger railway stations in cities do – why?
4. When a printer can be bought relatively cheaply, why is the ink so expensive?
5. Explain this "Was £7.99, now £3.99." Why is this a common pricing tactic?
6. Why do many computer manufacturers offer free software whose market value exceeds the price of the computer itself?
7. Why do many photo processing stores give you a second set of prints for free?
8. Why does Transport for London charge way more for a tube or bus journey if you buy a paper ticket than it does if you use an Oyster card?
9. WiFi use is often free in budget hotels but charged at a high price in luxury hotels – why?
10. Why do most UK cinemas choose open seating whereas theatres and sports stadia usually use reserved seating?
11. Why do women’s clothes usually button from the left while men’s clothes button from the right?
12. Why does a light come on when you open the refrigerator but not when you open the freezer compartment?

Looking forward to your opinions.


  1. 1. From tip jars at our local cinema, to the well known medical industry, makes it confusing to know when to reach for our wallet and how much should we tip.
    Many people in hospitality industries like servers, guides, drivers, concierges and others who help improve our dining and traveling experiences aren't paid even minimum wage by their employers. They depend on the gratuities that their customers give them for good service and friendly help.
    My rule is: "I tip when I want and if I want".
    Tip shouldn't be more a reason of guilt than a reason of gratitude (tips are expected and if we don't tip, we stand the chance of angering the doctor or the nurse, for example).
    I do not think there has to be a rule. If I go to my hairdresser and I feel great about her work and I want to keep her happy as well, I feel like tipping her once in a while.
    Tip is confusing sometimes, especially if you travel and it varies not only from country to country, but from city to city as well. No wonder, nowadays, pocket tipping charts and android phones tipping calculators for tips come in so handy! :)
    Like general rules I would to mention: 10%-20%- waitpersons, 10%- bars, coffee shops, tip jars in cinemas- 1-2 lei, beauty salons- 5-20 lei...
    Many restaurants now include the tipping service in the bill.

    2. Generally cash machines that charge are in areas of low footfall.
    At free-to-use cash machines the customer's bank will pay a fee to the ATM operator for every transaction. Banks have this so called interchange fee.

    3. I don't think is fair to have to pay to use a public toilet when you have already paid for a ticket to travel. Probably to prevent vandalism and homeless people that might sleep in there. Also, the money can be used for the maintenance of the public area.

    4. This one is so common :).
    It doesn't go one without the other. You have no choice. It's a financial and commercial way of keeping the business profitable and alive.

    5. It's part of the pricing strategy& pricing tactics to be used for your product.
    For one, it does not ends with “.00” so it seems smaller wiht ".99" (called charm pricing).
    And it's an obvious 50% off! In the eyes of the customer, this is what is also important:
    7.99= the relative value of the product
    3.99= the expectations for the value

    6. It's a business tactic, called market share. Why let a competitor be the default operating system on your computer?

    7. This doesn't happen in Romania. I have never been in this situation.
    I suppose one of the reasons is that people are not that committed anymore to film processing and maybe because the technical equipment permits it, without bringing high costs for the business.

  2. 8. The Oyster card is a very healthy, intelligent and efficient travelling method implemented, from the Londoners to foreigners (we can also buy online an Oyster card before we arrive to London).
    Oyster cards can be used to save money on attractions in London, like museums and restaurants. Londoners avoid long queues, congestion and the usage of cash. Free travel or various discounts are available for children under 18, students, the elderly, veterans, receivers of certain benefits.
    Transport for London wants people to use an Oyster card and to encourage this, besides the great benefits that it has, they have also made the fares much cheaper compared to cash.

    9. In most of the European countries and not only, the usage of WI-FI is not free of charge.
    At a luxury hotel, people are paying for a lot more, so maybe it would be fare for them to receive more freebies, like the Internet WI-FI, which indeed, many lower priced hotels offer it for free. But who can live without it? So, we pay.

    10. It is well known that the English are famous for loving and going frequent to theaters and football. Their sports stadium have the seating very much like the one in a theater hall and they are proud fans of football.
    The majority of them have season tickets and subscriptions for the entire year, so it is pretty normal to use the reserved seating method. It is also a very good way to avoid incidents or overcrowding.

    11. This is a question in which history seems to matter. When buttons first appeared, in the 17th century, they were seen only on garments of the wealthy. At that time it was the custom for rich men to dress themselves and for women to be dressed by servants! So, having the buttons from the left, made things easier for the mostly right-handed servants who dressed them.

    12. Putting a light globe in the freezer will generate too much heat, but I am sure that a good lightening system has already been invented!
    And since most people open the refrigerator far more often than the freezer, the benefit of having a light in the refrigerator is considerably larger.

  3. 5. "Was £7.99, now £3.99": At food this tactic is used by traders often for products that have only a few days until it expires. Even if they get less profit is better than throwing products.

  4. 1.I think the people gives tip because are obligated in some situations, for example in hospitals, in the public institutions for solving acts and for some work posts,at least in Rumania. In my opinion, nobody should do it and nobody should accept it.
    2.For payments using the card at stores, gas stations and other suppliers of products and services, including online shopping, banks do not charge fees, which is, in fact, the policy imposed by organizations of cards (Visa and MasterCard).
    3.I think that happens because in the railway stations is free entrance so everybody can use the toilet even if is not traveling , but at the theaters, cinema or sports stadiums is included in the price and not everybody can get in to use it, only if they pay the entrance.
    4.Because once purchased the printer you are forced to buy the ink.
    5.Are only selling techniques, but the real price is still lower.They do this to make the price more attractive.
    6.Maybe because the companies are obliged to buy original programs and they will have a technical support in the future. If a program failure and affects negatively their business ,with the license can seek compensation.
    7.Because is included in the offert. Nowadays we do not print the pictures , we keep them in the computer. So is a way of selling.
    8.If you plan to travel on public transport in London, has two types of ticket: the Travelcard-credited printed or Oyster-smart card. Both options are cheaper and simpler than the purchase of a single ticket and the two give complete freedom to get on and off public transport while in the capital.Why?Possible because that encourages visiting, traveling and is more environmentally.
    9.Maybe because the luxury hotels need to raise the standard of luxury and if they have free wi-fi,network will be too busy and could not provide this service in excellent conditions.
    10.I think that happens because the inglish people are crazy about football, and maybe theater, and is very important where are they sitting when they go to see a match.
    11.Around 2000 BCE appeared decorative buttons but were not used as fasteners, only later in the sixteenth century. Most men were right-handed and generally dressed themselves so they considered that it is on hand to finish from the right side buttons.
    Instead wealthy women were dressed by maids who was easier to conclude clothes of their masters starting from the left. Naturally as fashion buttons on the left side past then among women with low social status and over time became unwritten law, came to us and never changed.
    12.The lack of a light is mainly due to the fact that the extreme difference in temperature between the freezing glass of the bulb and the heated filament would cause the bulb to shatter. However, some modern freezers have begun installing LEDs to prevent this problem.

  5. 1.The people tip is influenced mostly by the society, more specifically, by the standard of living. For example, in Romania it made lots of reportages at TV and appeared lots of discussions about this problem. Some people started to ask if this is bribery. I think people tip in the underdeveloped countries because if somebody goes to a restaurant can be treated well if he tips. This comes because the waiter has weak wage. Also, in some countries to tip is a tradition and I don’t see this with good eyes.
    2.I think this is all about the policy of ATM’s banks. For example, I have a card at a bank and if I go in a store and I want to buy something, the store’s ATM perceives me commission if its ATM isn’t doesn’t belong to same bank with my card. This is a contest between banks.
    3.Railway stations charge to use toilets because these must be maintained from public money. But if you go to a theater, cinema and sport stadiums you shouldn’t pay anything if you buy a bill to get in.
    4.This is a very good question. Most of the time you better change your printer than the ink because as I know, a printer is cheaper than the ink and there is a huge difference.
    5.In this way the seller manipulates the customers and even if they realize that this is a trick, it’s very hard for them to resist. It can’t be possible as a seller to give up his gain in favor of the customers.
    6.Even if we buy a computer with software, we will buy the software itself. The manufactures think in this way: the customer doesn’t pay only the software because he doesn’t want to give lots of money on a CD but he’ll give these money on it if we included also the computer’s price in it.
    7.The photo processing stores give us a second set of prints for free because they try to gain customers. If you received a gift from a store, you will really go there the second time.
    8.Like others, fidelity or customer’s cards, Oyster card offers lots of benefits and encourage visiting and travelling in London.
    9.This is the most intelligent thing that I ever heard. If you have money for luxury hotels you sure have pennies to pay Wi-Fi. I think, in this way the balance can be equilibrated.
    10.I think this doesn’t happen only in UK. Cinemas choose open seating because there aren’t so many people as at the theater and sport stadiums where the people must reserve their places, if not, there could be disorder.
    11.I don’t know why women’s clothes button is on the left and men’s clothes buttons is on the right. For me, the only explanation is that in this way the women’s clothes can be differentiated by the men’s clothes.
    12.This is another good questions. I really don’t know why the freezer compartment isn’t lightened. But if you buy only a freezer, there you have light. Now, I ask, what is the real explanation?

  6. 1. The people who work in services- hair-cut, cosmetics, reparations, tourism should get tips because they help us to solve our problems, to feel good, to look well. The people who have jobs which need vocation - teachers, doctors, nurses should not get tips.
    3. The first mentioned domains are cultural, frequented of not so many people, who pay tickets to see the shows and should have facilities to the cultural act. The railway stations belong to the public are, to institutions or private firms, for which the returns, the profit is more important.
    4. The ink is a consumable article and as long as the row material is expensive, the costs of manufacturing an distributing are high, its price will be high, too.
    5.The trade tactic is with of view to attracting more and more customers. At the first sight the impact on people is great. Many people can be easily influenced visual and mental.
    6.It is also a trade tactic in order to obtain a major impact on the market, to eliminate the rivalry, to be successful.
    7.A trade tactic again, I think. It is a way of making advertising, of attracting more and more customers.
    8. This practice is an usual one in other countries, too. The firms stimulate the people to save more many and time by using cards and so they have more faithful customers and a higher constant profit.
    9. The luxury hotels are totally private, have high standards, high level of services and a different position regarding their customs, who also proceed from the rich, social classes.
    10. I am not sure why, but I think that there is a big competition between the cinemas and by offering open seats, the authorities want to attract more customers from all the social classes. 11.I think that this is so, because it must be a way to distinguish which clothes are for women and which for men.
    12.I think that the freezer compartment has no bulb.

  7. 1. I think people give you a little extra tip, when you look happy, you smile at them, and you are confident. In some situations you may feel obligated to give tip or a present like coffee and similar items, but I think nice people, who really help you (for example a public servant who actually does some extra work for you should get your tip)
    2. Free to use ATM-machines are usually owned and run by your own bank(for example BRD,BCR,Transilvania etc) and you don’t need to pay extra fees to withdraw money. On the other hand ATM’s that charge you are operated by private companies, which make money by every transaction.
    3. Like one of my other colleague said, they might want to prevent vandalism, and make some extra cash for maintenance purposes.
    4. Laser printer toners and even inkjet printer cartridges are unimaginably expensive, because the printer has no use without it, if you want to keep printing, you have no choice, you have to buy ink. In contrast matrix printers are very expensive, but the ink roll is very cheap, and in the end it’s the same thing. Printing is quite a luxury...
    5. I agree with Kinga Bota. In the eye of the costumer it’s half the price, and 3.99 seems a pound less than 4.00 .
    6. This strategy is common in the most part of the world. It’s seen on iOS, Mac or Windows laptops/desktops. You use the software for a year or two, than you have to buy another license in order to be able to use it in the future.
    7. I think if you go to a particular place (ex. Coffeehouse, Restaurant and so on) a number of times you get used to it, and you don’t want to go elsewhere, because you already know what to expect. By giving you a second set of prints freely you have the false impression it’s actually free, but probably the first printing concluded the price.
    8. It’s because people living in London wish to avoid long rows, they are not tourists and don’t have the time to wait in the line, to get a ticket so they created the oyster card system. It’s better for them, because instead of say 100 persons waiting to get a ticket, there will be just 10 or 20 waiting in the line, so they will get theirs much faster.
    9. I think WiFi in expensive hotels is not free, because if you afford to pay from 200 to thousands of Euros for a night, an euro or two won’t count. And the other thing it’s the quality. I think the Wifi signal strength is these hotels are much more acceptable.
    10. Because it’s not important where you seat in a cinema, the screen is viewable 100% from every single seat, but in a theater or football stadium it does matter, and for the best places you will have to pay extra fees.
    11. It’s because designers are used to it. In the 17century women were dressed by servants, who were usually right-handed, so it was easier for them to dress these ladies
    12. If you put a light bulb in the freezer it would condense water vapour wich in term would freeze, and when you open the door it would break because of the heat generated inside of the bulb. Glassware breaks when you pour hot liquids in it too fast.

    1. You have an interesting comment at point 11 - I didn't know about it!