Academic journal article Academy of Marketing Studies Journal

Simulation Modeling of Consumer Behavior in Decision Making about Point of Services Purchase

Academic journal article Academy of Marketing Studies Journal

Simulation Modeling of Consumer Behavior in Decision Making about Point of Services Purchase

Article excerpt

INTRODUCTION

Consumer behavior is defined by a set of taken private decisions and their consequences. The relevance of consumer behavior modeling within a market economy is due to the fact that it is extremely important to know how humans will act in different market situations, because consumer behavior and subjective reaction to economic changes is the engine of business development (Becker 2003).

Consumer behavior is the main subject of behavioral economics, which studies the impact of social, cognitive and emotional factors on the economic decision-making (Khemchotigoon, Kaenmanee 2015, Caldwell 2014, Humann, Madni 2014). The main purpose of the research is to make an attempt to create theoretical and methodological background of a simulation model of consumer behavior in making decisions at products purchase areas selection and further extrapolation of this model to the healthcare.

The development of market relations has resulted in the modernization of both the structure of the market as a whole and its separate mechanisms (Goldfarb, McDevitt, Samila, and Silverman 2015). However, Russian healthcare system is not fully able to follow the rapid transformation of the medical service market. Distortions of the emerging healthcare market in Russia, intensively developing commercialization of healthcare were among the factors that have led to a decline of medical and demographic indicators of the country. The decline of population and life expectancy, high mortality rate of working age population, high spread of socially dangerous diseases, which form a threat of personal degradation, high infant and maternal mortality, etc. are among them.

Research experience shows that in any economic situation, both in the country and in the world, the demand for basic medical institutions services decreases slightly. If we consider medical services as a commodity and a subject of market exchanges, one of the main situations that are reviewed and modeled by experts, is the situation of services (goods) point of purchase decision --making. This leads to the relevance of modeling of services point of purchase decision--making within the advertising organization of the institution with the aim of increasing its economic efficiency.

TERMS AND METHODS OF RESEARCH

The first discourse on human behavior in the economy appeared in the postulates of classical economic theory, in the works of A. Smith and D. Ricardo. Their ideas were developed by the representatives of marginalism, who were the authors of the first descriptions and explanations of consumer behavior and their decision-making. With the development of allied disciplines consumer behavior becomes one of the central subjects in marketers, economists, mathematicians, experts in the field of game theory researches. As a result of this research behavioral economics is formed. This discipline studies the impact of social, cognitive and emotional factors on the economic decisions of individuals and institutions and the consequences of this impact on market variables. Dan Ariely, a protagonist of Behavioral Economics ideas, in his book "Predictably irrational. The hidden forces that shape our decisions" proves that irrational economic behavior is quite predictable (Ariely 2008).

This leads to the possibility of introducing irrational moments to the probabilistic aspects of behavior that allows forming the basis of concept of simulation modeling for the study of consumer behavior. (Baptista, Martinho, Lima, Santos, Prendinger 2014)

SIMULATION MODEL

In the developed simulation model, the consumer makes the decision between two points of purchase of goods (services) and between two hypothetical producers of services which compete. According to the problem trade networks services and products are analyzed. Each consumer decides which point of purchase of the trade network to choose. The main factors are the availability of the store and the image of the trade network, which is built through advertising. …

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