Opportunism in Consumer Behavior

Barbara Hayes-Roth, The Rand Corporation
ABSTRACT - Consumers decide where to shop and what to buy. A complex, highly opportunistic cognitive process produces these simple behavioral actions. This paper presents a case study in product choice to illustrate consumer opportunism. It discusses the problem characteristics that demand opportunism and several manifestations of opportunism in consumer behavior.
[ to cite ]:
Barbara Hayes-Roth (1982) ,"Opportunism in Consumer Behavior", in NA - Advances in Consumer Research Volume 09, eds. Andrew Mitchell, Ann Abor, MI : Association for Consumer Research, Pages: 132-135.

Advances in Consumer Research Volume 9, 1982      Pages 132-135

OPPORTUNISM IN CONSUMER BEHAVIOR

Barbara Hayes-Roth, The Rand Corporation

ABSTRACT -

Consumers decide where to shop and what to buy. A complex, highly opportunistic cognitive process produces these simple behavioral actions. This paper presents a case study in product choice to illustrate consumer opportunism. It discusses the problem characteristics that demand opportunism and several manifestations of opportunism in consumer behavior.

INTRODUCTION

Consumers make several general categories of decisions, including where to shop, what categories of products to buy, and which particular products to buy within each category. Many of these decisions appear deceptively simple. For example, a consumer might decide to shop at Robinson's Department Store, to buy a new set of dishes, or to buy a service for ten in the pattern Imari Bouquet. Although each decision describes a simple behavioral action, the underlying cognitive process is a complex, sometimes chaotic interaction among many competing mental actions. I refer to this characterization of the decisionmaking process as the "opportunistic model." Several colleagues and I have formalized the model and investigated its implications for the first two categories of consumer decisions (Hayes-Roth, 1980a; 1980b; Hayes-Roth and Hayes-Roth, 1979; Hayes-Roth, Hayes-Roth, Rosenschein, and Cammarata, 1979; Hayes-Roth and Thorndyke, 1980). In the present paper, I apply the basic principles of the opportunistic model to the third category of decisions, product choice.

BUYING DISHES: A CASE STUDY IN OPPORTUNISM

I will use a recent experience to make several points about the process of choosing among alternative products. While a single anecdote is not in any sense a proof of these points, I hope it will be a perspicuous and intuitively persuasive illustration. The process described below breaks down into a series of episodes, each comprising receipt or generation of relevant information, analysis of the problem in light of the information, and generation of either a product choice or a Plan for choosing a product.

Episode 1

Information. During the third week in September, I decided to have a dinner party for ten people on October 17. Because people in Los Angeles plan their social calendars in advance, I immediately called and invited all of the guests. I knew at the time that I had to deal with one small preliminary problem: I did not have enough dishes to serve ten people dinner. In fact I had two "sets" of dishes, Wedgewood stoneware and Lenox china. However, over the last ten years, twenty assorted pieces of my stoneware had broken and my china had grown to only seven place settings. In addition, I was operating under budget restrictions.

Analysis. I'll have to buy some new dishes. I frequently wish to use my stoneware for parties of varying sizes, but rarely wish to use my china, especially for large parties. Also, the stoneware is less expensive than the china. So, it makes more sense to replace the missing stoneware than to buy more china.

Plan 1. Replace the missing stoneware.

Episode 2

Information. On Friday, October 2, I began to execute Plan l. Calling several department stores, I discovered that none had my stoneware pattern in stock, that my pattern was available only on an import basis (taking two to six months), and that Wedgewood would probably discontinue the pattern soon.

Analysis. I really love my Wedgewood stoneware. It is a distinctive pattern that attracts many compliments. It has sentimental value since I bought it eleven years ago while on my honeymoon in Europe. Also, if I ever want to complete the set, I should do it before Wedgewood discontinues the pattern. I can probably borrow dishes for the party.

Plan 2. Order the stoneware and borrow dishes for the party.

Episode 3

Information. On Friday afternoon, October 2, I reviewed Plan 2 with my husband. He pointed out that British products are very expensive right now and that the new pieces of Wedgewood stoneware might cost as much as a whole new set of dishes from some other company or even as much as three new place settings of my china. He did not feel sentimental and preferred to complete the china. He also reminded me that much of our existing stoneware is chipped or scratched. Finally, he argued that a two to six month wait is also a considerable cost. I replied that several of the department stores had sent out sale announcements recently and that, if dishes were among the sale items, new stoneware or additional china place settings might well be a better bargain.

Analysis. I should be willing to pay as much, or a little more, to have a whole new set of dishes than simply to replace my broken stoneware. I should be willing to pay an additional premium to complete my china set.

Plan 3. If the china costs less than $200 more than the stoneware replacements, buy the china. Otherwise, if new stoneware costs less than $100 more than the replacements, buy new stoneware. Otherwise, replace the Wedgewood stoneware pieces.

Episode 4

Information. I immediately began to execute Plan 3, calling department stores to find out about the sales. I discovered that the sales covered all dishes in stock and provided a 25% discount. I also learned that on Wednesday, October 7, one of the stores would be selling forty-five piece sets (service for eight plus serving dishes) of Chinese porcelain for $100. The saleswoman on the telephone said the porcelain is very beautiful.

Analysis. The Chinese porcelain is extremely inexpensive. I could probably buy two sets (service for sixteen) of that for less than the cost of any alternative. It probably has an Oriental pattern, which I would like. With the sales, I could also probably do better buying either new stoneware or additional china than by replacing my Wedgewood stoneware pieces.

Plan 4. If the Chinese porcelain is nice, get that. Otherwise. revert to Plan 3.

Episode 5

Information. On Saturday morning, my mother-in-law called and I reviewed the problem with her and asked her advice. She said to forget the Chinese porcelain because it is too thin and fragile. She said bone china is much stronger and I should either get that or some kind of stoneware. She also told me that my sister-in-law had recently mentioned something to her about a Mikasa factory outlet that had a large inventory and exceptional prices, but she couldn't remember where it is. She said my sister-in-law was out of town, but would return sometime on Monday, October 5.

Analysis. It's silly to get fragile dishes for frequent use, so the Chinese porcelain is inappropriate. Mikasa makes both china and stoneware. Also, they probably have dishes with an Oriental pattern--which is what I am looking for. By shopping at the Mikasa outlet, I could probably get a good price on stoneware and maybe even afford their china.

Plan 5. Return to Plan 3, with special consideration for the Mikasa outlet.

Episode 6

Information. On Saturday afternoon, I began executing Plan 5 and visited several department stores. I discovered that replacing the Wedgewood stoneware pieces would cost several hundred dollars--close to the criterion for preferring the other alternatives. I was informed that an import order could take six to twelve, rather than two to six, months to fill and that the British might not even have my pattern in stock. It was suggested that I might find it in some of the Canadian stores and that a friend in Canada might be able to find it and send it. I also discussed the relative merits of porcelain, bone china, and stoneware with the saleswoman. She informed me that porcelain and bone china are equally strong and that both are stronger than stoneware. I observed that both porcelain and bone china, even on sale, were outside of my budget. I saw a Mikasa stoneware pattern that I liked (Imari Bouquet) and the sale price was within budget.

Analysis. I don't have a close friend in Canada and regret not having bought the Wedgewood stoneware when I was in Vancouver last month. The Chinese porcelain may be OK after all. Mikasa's Imari Bouquet would also be acceptable. I could probably get it for a better price at the Mikasa outlet, but taking the time to investigate this possibility might mean that the department stores run through their existing stock. It's also possible that the outlet won't have Imari Bouquet in stock. Nonetheless, I might save a considerable amount of money by buying it there if I can.

Plan 6. Find out about the Mikasa outlet on Tuesday: Do they have Imari Bouquet? Do they sell it at a lower price than the sale price in the department stores? Is the difference large enough to warrant the hour and a half round-trip drive to the warehouse? Investigate the Chinese porcelain on Wednesday. Use the information gained to decide among: Imari Bouquet from the Mikasa outlet, Imari Bouquet from the department store, Chinese porcelain.

Episode 7

Information. On Tuesday morning, I began executing Plan 6. I got the telephone number of the Mikasa outlet from my sister-in-law and called. I learned that the outlet did not have Imari Bouquet on the floor or even in the warehouse. It would take two months to order it from Japan. However, they did have a large inventory of other patterns. They could not give me prices over the telephone, but assured me that people come considerable distances to buy dishes at the outlet.

Analysis. Going to the Mikasa outlet offers a considerable advantage (a very low price), but considerable uncertainty. It is also a long drive and I cannot go until the weekend. By then the department stores will probably run out of Imari Bouquet and I may not find anything I like at the Mikasa outlet. However, if they really do have a large inventory, there is a good chance they'll have something else I like.

Plan 7. Investigate the Chinese porcelain on Wednesday. If it is nice, buy it. Otherwise, go to the Mikasa outlet this weekend and buy something.

Episode 8

Information. On Wednesday morning, I went to see the Chinese porcelain. Although it was very pretty, it came only in delicate flower patterns, which I did not want.

Analysis. I should go to the Mikasa outlet right away just in case they don't have anything. That way, I can still go back to the department store sales if necessary.

Plan. Go to the Mikasa outlet. If they do not have something satisfactory, go back to the department stores.

Episode 9

Information. I immediately went to the Mikasa outlet. They had a large variety of dishes at excellent prices--much less than the sale prices in the department stores. I still could not afford the china, but there were many stoneware patterns from which to choose. Unfortunately, none of them was very Oriental. They were all delicate flower patterns, which I didn't want. I decided to call the department stores to see if they still had Imari Bouquet on sale--they did, but they didn't have ten place settings. I had nearly resigned myself to getting one of the flower patterns at the Mikasa outlet, but decided first to ask the saleswoman again about Imari Bouquet. She said that although it wasn't on the floor, it was in the warehouse and she could sell it to me for a 25% discount for Pick-up in seven to ten days.

Analysis. I am happy to have found a complete set of Imari Bouquet at an acceptable price. I am only concerned about getting it in time for my dinner party--exactly ten days away. I'll take the chance.

Plan. Order the Imari Bouquet. Call next week and arrange to pick up the dishes before Saturday, October 17.

Postscript

The Mikasa outlet had such a variety of things at such excellent prices that I decided to do some of my Christmas shopping early. I bought gifts for eight of the people on my list at prices 50% lower than what I had budgeted. I also took advantage of a special sale they were having to buy crystal wine and champagne glasses at a remarkable savings. And, I picked up my dishes on Friday, October 16, in plenty of time for my dinner party, which was a great success.

FUNCTIONS OF CONSUMER OPPORTUNISM

The most obvious characteristic of the process described above and, I believe, of consumer behavior in general, is its pervasive opportunism. In fact, the problems facing the consumer, where to shop and what to buy, virtually demand an opportunistic approach. Thus, what may appear to be a haphazard and disorderly problem-solving method is actually a functional and highly adaptive method. Consider the following problem characteristics and the consumer's response.

1. Goal Definition

Problem Characteristic. The problems facing consumers usually do not specify an operational goal. For example, in the case study presented above, the initial goal was to acquire enough dishes to serve dinner to ten people. This goal did not specify whether the dishes should be stoneware or china, what brand or pattern the dishes should be, or which particular pieces (dinner plate, soup bowl, etc.) were needed.

Consumer Response. The consumer operationalizes the goal. Because of the vagueness of the initial goal, the consumer can and frequently does operationalize it in alternative ways. The operationalization may include many informal component goals and constraints, some compatible and some conflicting. Some goals are formulated at the start of problem-solving activity; others develop along the way. For example, at various times in the process described above, I had the following component goals: get enough dishes to serve ten people dinner; stay within budget; keep the current dishes; complete the china.

2. Problem-Solving Method

Problem Characteristic. There is no operational space of alternative steps for solving the problem. The consumer has no hard and fast rules for discriminating among goals or resolving conflicts among them. For example, there was no sequence of steps that would enable me to systematically explore alternative dish-buying opportunities while guaranteeing a satisfactory final result.

Consumer Response. The consumer generates heuristics for achieving formulated goals. Just as goals may conflict, some of the associated heuristics may also conflict. Similarly, the consumer generates some heuristics at the start of problem-solving activity, but may generate others along the way. For example, in buying my dishes, I used heuristics such as: spend a little more money for three place settings of china than for a new set of stoneware; consider ordering stoneware replacements from Wedgewood in England; risk losing the Imari Bouquet stoneware for the chance to get a better price at the Mikasa outlet; buy sturdy dishes for frequent use; prefer dishes that are attractive and distinctive and have an Oriental look

3. Control Regime

Problem Characteristic. Like most problem-solving tasks, the consumer's task presents itself as a goal to be achieved (e.g., obtain dishes to serve dinner for ten).

However, because consumer behavior is so constrained by economic and other constraints (e.g., stay within budget, get attractive dishes), it is not feasible to follow well-defined, goal-driven problem-solving strategies such as divide-and-conquer or successive-refinement.

Consumer Response. The consumer responds with a combination of goal-driven and data-driven problem-solving activities. For example, in pursuit of the goal to replace my missing stoneware, I called and visited several department stores, calculated costs, etc. On the other hand, information about the cost of replacing the stoneware and the time required to get it lead me to revise my goal

4. Information Flow

Problem Characteristic. All of the information useful in choosing among goals and heuristics may not be available at the start of problem-solving activity. Instead, information arrives over time, sometimes throughout the course of the problem-solving activity. For example, the case study described above shows useful new information arriving in each episode, extending over a period of several days.

Consumer Response. The consumer responds to the flow of information either by ignoring it or by incorporating it in the decisionmaking process as it arrives. For example, in buying my dishes, I might have simply pursued my original goal, replacing the stoneware and disregarding information about the relative cost or availability of other kinds of dishes. Instead, I was extremely opportunistic, responding to each new piece of information as it arrived. Further, the information collection process itself may be opportunistic. For example, early in the dish-buying process, I ruled out porcelain for fragility. Later, when I was discussing Wedgewood stoneware with a saleswoman, I took advantage of the opportunity to solicit her opinion about porcelain. The new information lead me to revise my plan.

5. Opportunity Flow

Problem Characteristic. Just as relevant information arrives over time, various opportunities for solving the problem arrive over time. They also disappear over time. For example, the opportunity to buy dishes at one of the department store sales disappeared midway in my decisionmaking process when the stores exhausted their supplies of Imari Bouquet. Conversely, the opportunity to buy Chinese porcelain became available only after I had already engaged in a fair amount of problem-solving activity.

Consumer Response. Again as in the case of information flow, the consumer responds to the flow of opportunities either by ignoring them or by accommodating the decisionmaking process to attractive opportunities. My dish-buying behavior showed an extreme accommodation to interesting new opportunities.

CONCLUSIONS

I would like to anticipate possible reservations about the case study "method" used in this paper. As discussed above, I intend it primarily as a pedagogical device. However, the example may appear to some to be exaggerated r otherwise unrealistic. In response, I point out that the case study is an accurate account of my experience and behavior and that Episodes 1-7 occurred before I even conceived the approach I would take in this paper. (In fact, my design for this paper was an opportunistic response to the need to write it and the salience of an obviously relevant on-going experience.) Episodes 8-9 did occur during the writing of the paper, but I certainly did not deliberately contrive the problematic events in those episodes and I wish I could contrive more of the fortunate ones!

Doubters aside, the extremity of my opportunism in choosing and buying dishes raises an interesting question: What determines the degree of opportunism in a consumer's behavior? I think there are two factors: individual differences and specific task demands. Some of my previous research on planning shopping trips revealed substantial individual differences in planning style. Subjects were given a list of desirable items, some contextual information about why each item was needed, and a map showing the locations of stores, parking lots, etc. Because of time constraints, subjects had to decide which items to buy as well as where to buy them and how to travel between successive stores. Some subjects attended to only a small number of immediately obvious factors and quickly generated a plan. Other subjects attended to a greater variety of factors, sometimes noticing and incorporating new factors after the planning process was well underway. Although these subjects expended more time and cognitive effort than the former subjects, they also produced better (more efficient, more sensitive to time constraints, more realistic, and more comprehensive) plans (Goldin and Hayes-Roth, 1980). Specific task demands are also important. In the case study, I was trying to make a decision involving a substantial amount of money, while honoring a tight budget. In this kind of situation, it makes sense to spend tire and energy in order to buy a satisfactory product at an acceptable price. There are also probably interactions among these two factors; some people are more sensitive to certain kinds of task demands than others.

I have tried to illustrate the prevalence and functionality of opportunism in one type of consumer behavior, product choice. As mentioned above, some of my other research has shown that opportunism is similarly important in other types of consumer behavior, such as deciding which categories of products to buy (dishes, a car, a suit, etc.), or deciding where to shop. That research, as well as the case study presented above, also revealed interactions among these different types of decision processes. For example, in trying to decide which dishes to buy, I discovered the existence of the Mikasa outlet and opportunistically decided to shop there. Later, while choosing among alternative dishes at the Mikasa outlet, I discovered that the outlet also sold several other categories of products at good prices and opportunistically decided to buy some of them. These observations suggest that, cognitive opportunism may characterize the larger constellation of consumer behaviors.

REFERENCES

Goldin, S., and Hayes-Roth, 8 (1980), Individual Differences in Planning Processes, N-1488-ONR.

Hayes-Roth, B. (1980), Estimation of Time Requirements During Planning: Interactions Between Motivation and Cognition, N-L581-ONR.

Hayes-Roth, B., (1980), Flexibility in Executive Processes. N-1170-ONR.

Hayes-Roth, B., and Hayes-Roth, F. (1979), "A Cognitive Model of Planning," Cognitive Science, 3, pp. 275-310.

Hayes-Roth, B., Rosenschein, S. and Cammarata, S. (1979), "Modeling Planning as an Interactive, Opportunistic Process. In Proceedings of the 6th International Joint Conference on Artificial Intelligence (Tokyo).

Thorndyke, P. W., and Hayes-Roth, B. (1980), Decision-Making During the Planning Process, N-1213-ONR.

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