Give, and Ye Shall Receive

Gift giving appears to be a crucial part of modern society, with every holiday, Saint's day and celebration becoming a reason to get together and give presents. And almost always preceded by a frantic run around every shop in town that the receiver might approve of. Is this an indication of a society more in touch with each other's wants and needs? Or an extension of the mounting evidence of a society based on consumerism, material wealth and an over-reliance on using possessions as an indication of who we are are and how happy we are? Gift giving is a involved decision because it reflects what the buyer thinks of the receiver and their relationship- which is something to be got right. An issue arises when the impression the giver and the receiver have of their relationship differs. But just how involved is this buyer decision.

This is a sliding scale of the level of interest going from "inertia to passion". A lack of interest may be a habitual purchase. This does not mean the consumer has not thought about which chocolate bar to choose in her lunch break, it's just that she started buying a packet of Minstrels in her lunch a year ago, and has made the same purchase every lunch break since then. But, after that, she went into town to buy a new pair of heels- which is definitely on the obsession side of the scale. 

According to Laurent and Kapferer (1985) the level in of involvement in a purchase decision is mainly down to 4 different components:

1. Importance and Risk (FTPEPS)

2. Probability of making a bad purchase

3. Pleasure value of the product category (enjoyment in transaction)

4. Status Value of the Product.

Finance

Time

Performance

Ego

Physical

Social

I discussed the importance and risk associated with buying certain products/services with my mum, Jess, her boyfriend, Calum, who are both in their 40s, my sister Nicky, 16 and myself, 19. I though that this would be a nice range of ages to contrast. The purchases that we discussed were buying a holiday, investing money/pensions schemes and buying jewellery for a partner.

I thought that buying a holiday would have been much higher risk for Calum as he has two small children, and they were in certain aspects. The Financial risk of buying a holiday is much higher, as he must purchase for three people, not just himself, despite that I may spend all my money on a holiday, having to save to raise the funds for flights, hotel and spending money. Also he would be trying to make sure that they were staying somewhere safe, healthy and fun for they kids, with plenty to do. If I were going on holiday with some girls, I would probably be looking for the cheapest flights, not the most convenient flights, and the cheapest rooms.

The amount of Time that I would put into looking for a holiday may be reasonably high, trying to find good deals and offers, but not a huge amount. Calum would probably be looking at brochures, talking to other people about where to go, calling the hotel/travel agent to make sure he would be getting the right holiday for him and his girls, and there for would take more time over booking it, not just doing a last minute deal.

With a holiday there is always quite a high risk that it's Performance doesn't reach expectations, as you can't just go and visit it first. Again, this would be a higher risk for Calum as he has responsibility for his girls. If the holiday didn't have all the facilities it said in the brochure the kids would be disappointed, it would be harder to keep them occupied for the duration, maybe the hotel isn't as good as it was supposed to be. For me it wouldn't matter so much- I would expect less as I had paid less- as long as it is near some shops and bars!

Ego was much harder to decipher. If I organised a holiday and it went off really well, that would make me feel really satisfied, a real ego boost. It would be similar for Calum, but not so much. He's booked holidays before so it wouldn't be such a big deal for his ego.

The Physical risks of going on holiday are generally quite low. The risk would most likely be higher for me going on holiday, getting myself into all sorts of trouble. Whereas Calum would be looking out for his children, trying to keep out of trouble as much as possible. 

After you come back from a holiday you always tell anyone who'll listen about how great it was, so I think that the Social risk is quite high for a holiday, but more so for a younger person bragging to all their friends. From this I feel that a holiday would be riskier for a younger person, it may be harder for me to raise the money to go on holiday, it would be riskier socially and personally. The risk for Calum was all to do with having the kids with him.

As the hot topic of the moment is the economy and how people are losing money from their pension schemes we decided that talking about pensions and investments would be quite interesting. The main theme running through the conversation was that had we been talking about this four or five years ago the conversation would have been completely different and mum and Calum may have been telling me that getting a pension plan is pointless. But now that there may not be enough money to support them, and that they are slightly nearer needing to use it their opinion has changed completely.

At the moment all investments and pensions are Financially risk for everybody. I was trying to find something that was comparable to this in my life, and could only really come up with was a student back account, or that if I were to make an investment at the moment I would only invest a very, very small amount that I could afford to loose. So in this respect it would be a financially low risk to me.

The Time that people put into researching and choosing investments is phenomenal. There is no way of knowing what will happen to investments in the future, but people try and make as informed a decision as they can. If I were to make an investment I would probably choose a random company. In a book by psychologist Professor Richard Wiseman, Quirkology, an experiment is carried out to try and predict the stock market. They find a woman who believes that she can use astrology to predict the stock market, a banker who has been in stocks and investments for 20 years and a four-year-old girl. They are each asked to pick four companies who will do well (the four-year-old gets her mum to hold a pile of papers, each with the name of a company on, and throw them over the stairs so that she can catch four pieces of paper). The results were that after a week the little girl has made the most money, followed by the astrologist, and then the banker. After a year the girl had made far more than either the banker, who was in second place, and the astrologist.

The most important aspect, and therefore the most risky, is the Performance of the investment. Any investment may seem "safe", but never is. As with anything, a good investment would boost your Ego, and a bad investment would leave you feeling quite let down. Watching your investment accumulate, or decline, over the years would have a big impact on your ego. Many people are currently being left with very battered egos due to the what their hard saved pensions are worth at the moment.

There is not much Physical risk in investing money, unless you use and loose all your money or savings. The Social aspect of pensions may be that, as Calum so eloquently put it, when you retire you may have to buy Tesco Value beer when your friends can still afford to go to the pub and carry on drinking premium brand beers. The investment into a pension is a much higher risk is a higher risk to a 40something than to me simply because it is more relevent to them, but the conclusion of the conversation is that I should start putting a little away every month now.

The final item discussed was buying jewellery for a partner. It was concluded that buying jewellery would be fairly similar of any age, apart from a few difference. Buying an item of expensive jewellery would be quite a higher Financial risk, and one of the catagories where it would be riskier for a 20-year-old with less money to spend. I think that the Time taken to choose the piece of jewellery would quite high, wanting to find the right piece that the receipiant would like the most. One of the biggest risks is the Performance. Does the recipiant like it? Did it fullfil the need to make you feel good about getting the gift? Another high risk catagory would be Ego. Did you enjoy buying the present and is it well recieved? There aren't really many Physical risks to buying jewellery, especially not expensive jewellery. How other people see the gift is often quite risky with jewellery as it is a public display, so the Social aspect is, also, high risk.

So a low involvement product would be something routine like milk or bread that you buy every week with your food shopping, and you would think about it, buy it then have an emotion response about it afterwards, think-do-feel. With an impulse buy, such as picking up some chewing gum or a chocolate bar when paying for the rest of your shopping at the till, you feel-do-think. You see the chocolate, feel like having a Cadbury's Caramel, buy the chocolate with the rest of my shopping, then think how yummy that chocolate was. Buying clothes because they are fashionable is a behavioural influence buy, do-think-feel. A high involvement product is an irregular purchase with high risk, such as the risks explored above. This includes buying a house, a car, a holiday or buying a gift for someone that is important to you, think-feel-do. I would think about what the recipient would like and how I would feel buying it and giving it to them, and then I would make the purchase.

Gift giving is the chance to access two different markets at the same time. A child buying her mother a Mother's Day present would have be looking for completely different things than if she were buying for herself, and completely different things than if the mother were buying for herself. The gift would emotionally connect the giver an the recipient. The gift always conveys a message about the recipient and the relationship between the giver and the recipient. Problems will occur when the gift conveys a difference between how the giver percieves their relationship and how the recipient percieves the relationship. 

"It takes a tough man to make a tender gift"

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