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Economics Assignment | Economics Theories

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Added on  2020-05-08

Economics Assignment | Economics Theories

   Added on 2020-05-08

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Economics Assignment | Economics Theories_1
LITERATURE REVIEWIntroductionThis chapter contains the empirical review, theoretical review as well as the conceptualframework. The empirical review gives detailed information on the study, which includes,assessing the relationship between socio-demographic data and the means of travelling to work,evaluate the difference in travel behavior between young adults and senior adult, and examinehow level of access to transport mode influence mode share.The theories covered in the theoretical review include theTransaction Cost Theory,Concept ofconsumer behavior and the service quality theory, while the conceptual framework gives adescription of the relationship between travel behavior and customer service delivery. Theoretical FrameworkTransaction Cost Theory This theory was propagated by Hicks and Niehans in 1983 The theory states that the existence ofcompanies has been thriving since they can only administer transactions of a market place withinthemselves in an affordable way than they can with any other company externally. Transactioncost occurs when working with parties from the outside of the company. These costs includeinformation cost, decision cost, outsourcing costs and enforcement cost. Information cost hasbeen greatly reduced by emergence of new information technology which has enabled managersto pursue and carry out transactions in a resourceful way. Transaction cost can be classified intoseveral categories namely; tangible and intangible costs, monetary cost, intellectual and labourcosts which occur indirectly, hence they are termed as indirect costs. A firm will incur labourcosts when they get someone to do something on their behalf (Williamson, 1989). A companystructure and systems is a mojor concern in control over transaction cost and the managementshould make all transactions internal to avoid non production costs, risks and drawbacks.
Economics Assignment | Economics Theories_2
Transaction overheads have a valuable influence on customer service transmittal. The goal of thestudy is to check in thoroughly how customer service delivery can be made better using socialmedia marketing. Social media as a platform will achieve this in lowering transactions costs.Concept of consumer behaviorConsumer behavior research is the scientific study of how human beings will seek a study ofhow they use goods that satisfy their human wants. Consumer behaviors include the actions anddecisions that lead to a customer's purchase of a good or services. It is studied by marketers,businesses and researchers to understand what influences an individual’s preference and choiceof a product of service. There are various factors that affect consumer behavior they include;beliefs and social values, age, education, culture, economic status and personality, The findingson consumer behavior are used to come up with strategies and products that will improve acompany’s performance and profits. Today’s research on consumer behavior is increasingly vitalfor businesses because consumers are now more knowledgeable and powerful (Faison, 1977).Characteristics of consumers will comprise four key factors where the factors are responsible forthe different sorts of behaviors portrayed by the consumers. These factors include:Cultural: Different people will have differing cultures where they are affected throughsocialization processes with family and other key organizations.Social: consumer behavior will also be affected by the kin of friends and age mate as well as thesocial class that one has.Personal: people have differing preferences and this will trigger their customer satisfaction.Group influence: the group in which a consumer associates with will be responsible for theconsumer preference, perception and attitude towards a product or service.The purchasing power: consumers evaluate their ability to purchase before deciding to buy theproduct or service. Economic condition: the prevailing economic situation in the market plays a vital role ininfluencing consumer behavior and their choice of products.Advertisements; this helps to create awareness and remind the consumers about a product. Thisgreatly influences the consumer decisions and behavior (Sirgy, 1982).
Economics Assignment | Economics Theories_3

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