Consumer Behaviour - Exam project

Consumer Behaviour Essay Purchase of a pair of Sennheiser headphones

By: Peter Packroff (Mother tongue not English)

Module: Module leader:

Due March 21st 2005

Introduction to Conusmer Behaviour 2005 Anne Warren

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Contents

Introduction

p. 3

The decision making process

p.4-6

The involvement

p.7-9

Conclusion

p.10

Bibliography - Books

p.11

Bibliography – Online reports

p. 12

List of appendences

p.13

Diary

p.14-18

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Introduction

This Essay will cover two theories of the buying process of a pair of Sennheiser Headphones. The purpose with this essay is to turn theory into practice. The essay is therefore based on the attached diary, which has been written over 3 weeks of the buying process, to the final purchase.

The two theories this essay will cover, are the individual decision making process and the consumer involvement.

The decision making process will not only cover the choice of brand, but also choice of purchase situation/ market place, which in this case is Ebay.

Ebay uses different tools that make the consumer become more involved with Ebay. The author looks closer into how Ebay increases this level of involvement in practice. Also how this deep involvement can lead to up-sale and impulse purchases.

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The decision making process

Solomon, 2002 outlines 4 general steps that apply to most decision making processes.

The first step is problem recognition, second is information search, the third is evaluating of alternatives and fourth is the final product choice.

As is the case in the diary, this is also applied to the purchase of the headphones.

However, in this case, the final decision had actually taken place, but was interrupted in the very last second of another product, because the consumer was not truly convinced in his evaluation process.

What is it that makes a problem occur? Marketers try to create consumer needs, which Solomon calls primary demand. If there is a new technological developing on the market, marketers first focus on the new technology, and then the brand. E.g. BT broadband is now showing a commercial with a man who gets tired of watching his computer downloading, so he eventually crashes the whole office. In this commercial, markers create a need of a faster internet connection, and only as a second priority put focus on BT as provider. A secondary demand is, when a consumer knows about the type of product but now have to choose among the alternatives.

In this case, the need is not directly created by marketers. However, from a Frankfurt School’s perspective it could be argued though, that the consumer is a victim of the popular consumer culture, and is finding himself in a never satisfied position and is in a constant need to reach the ideal state (in this case, to become a famous musician), which is shown in figure 8,3 (Solomon).

The problem is ongoing, and will not be stopped, just by purchasing these headphones.

Next is the microphone, then maybe a mixer, and from there, new expenses will emerge.

The level of searching differs from each product, and most costumers have, according to Solomon, a unique set of routines when purchasing each different kind of item. The perceived risks will also affect the involvement in above procedure. Solomon points out five overall risks: Monetary, Functional, Physical, Social and psychological risk.

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The studio headphones have no visual importance. They are not to be worn in the street, and the costumer does not need any recognition from other producers from the environment, so there is no social risk applied to this purchase.

A physical risk can be damaging to the ear and causes tinnitus. Bad components and a wrong balance of frequencies can lead to damaging of the hearing. The only direct risk is the monetary risk. The costumer believed that there would be a point where quality cannot get much better, and a normal person would not know the difference. Therefore the consumer has made a price roof, not only depending on current money situation, but on a fixed maximum for this kind of product.

Many marketers and PR’s still use the Freadinian theory, which consists of: ID, Super ego and Ego. The ID is the level of the brain that tries to please the need, in order to not feeling unhappy. It is the “party side”, as Solomon calls it.

The superego is the unconscious level and the logical part. On this level, the brain remembers the cultural codes, which has been thought. It is this part of the brain, which will eventually be the factor that decides what to grab for on the shelve in a supermarket.

The Ego is the level in between the two parts. It wants to please the ID, but is in conflict with the Superego. This is why the diary is interesting. It shows actually on which level a marketer in this case would have to concentrate about, in order win this consumer.

Ebay pleases this conflict with telling the costumer that the item is “won”, and not purchased. Sennheiser should not pay attention to my ID, as the need is already created, and all they have to do is to please it. What they have to do, is carrying about the Ego. Tell me it is worth the money, and convince me that this is exactly what I need, so I will not feel as sad, when I receive a fine for overdraw from the bank.

Some purchases, argues Solomon, require the consumer to seek information from internal sources, before external. This consumer had no internal sources to seek information from, as the consumer is the only person in the family and among his friends who is producing music. Therefore he had to seek external first. However, the consumer used forums and comments from other users online, as replacement for internal search.

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In table 8,3 (Solomon), are some of the common market beliefs displayed. The diary shows that this consumer does not share many of the common market believes: He chose not to seek information in a specialised shop, as he had too many bad experiences with sales assistants. He did not want to buy electrical goods in e.g. PC World, as he did not like the “no name” brands sold there, and he was not willing to pay extra for unnecessary wages for unusable personal.

The costumer did not believe that what is sold most of necessarily is the best product.

However, the costumer did take the choice of the professionals, who often prefer Sennheiser, into consideration.

An interesting point that applies to this case is the product signal. Online, it is very limited what impressions a marketer can create. The costumer cannot take up the item, or turn the packaging.

The packaging, as seen on front is plain and unattractive. It might well be the product description “pro” that signalised the purpose. It is worth paying attention to the font size of “professional”. The purpose has probable been not to over do the professional message, as they could loose ethos and credibility. If they are for professional, it should not be necessary to address the private consumer with big capital letters. Instead, the colour blue has been used, which is often associated with business matters.

Professional has very strong connotations, and the consumer expectancies to the product are therefore very high. The professional outlook of the product will, in this case, ironically have to be boring, to send the right signal (see appendix 1).

There was not much information to find on the Sennheiser headphones. Perhaps, Sennheiser wants to create a product signal through photos and smart descriptions. All headphones on Sennheiser’s homesite were praising every headphone, which confused the consumer, and they were very close to loose this consumer, because of a bad product description.

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Consumer Involvement

Sheths (1999) outlines that consumer researchers have distinguished between two types of involvement: purchase decision involvement and enduring involvement. Solomon distinguishes between Inertia to passion.

Purchase-decision involvement is the degree of concern and caring that customers bring to bear on the purchase decision. I.e. the costumer run through above mentioned decision process in the actual purchase situation. Enduring involvement is referred to as deep involvement in a spectacular product or product area.

In this case, the consumer is not deeply involved with headphones, but in the area of music making and electronics in general.

Interactive communication has been proved very important in order to increase the consumer involvement.

Some companies use celebrities as ideal state. Some shops play loud “MTV music”, perhaps to create this need of reaching the ideal state, as the idols in the music videos, and to create connotations to a night out, where this ideal state was temporary reached under influence of alcohol.

Sainbury’s offers club cards, on which the consumer can actively collect Nectar points.

Most companies provide product information-emails and newsletters to the costumers, as soon as they get the costumer’s information.

Sennheiser is specialised in a very limited range of products, and to risen the involvement would be difficult. However, most companies selling electronic goods will prompt the consumer to register the product online to receive information on the consumer, and also sending product updates etc.

When shopping at Ebay, the consumer can choose exactly what information he/she wants to receive, and when, so can unselect unwanted services.

The consumer can find almost everything on Ebay, and the consumer can get carried away, searching from one product to another. The diary proves this “Ikea” effect: The consumer always end up buying a lot more than intended.

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In contrast to Amazon, Ebay sellers provide their own product information. This means that when the consumer does not find the information needed, he/she can go to next similar product. When the costumer does this, it is impossible not to check out the price of the item. Already then, the consumer is comparison prices, and soon to be involved with a new auction.

When the auction has started, the consumer has to visit the site again, to see if he has won, or been over bid. A new visit, and a new chance to search for new products.

When a consumer has been outbid, the irritation can be so big, that he/she eventually ends up spending more than the actual intended bidding.

The opening screen on the users’ profile shows on how many items the costumer has been outbid, and how many auctions that are won. A costumer can bid a small amount on a product, to gain satisfaction from being a bit involved in a purchase, without actually buying the product. But the irritation of have being outbid can lead to an unintended determination that the costumer needs this item. This can be argued to lead to an addiction for bidding.

When one has bought an item, the message the consumer gets from Ebay, is not that he/she has bought an item, but “won” - no matter if it is an action or fixed price. This eases the monetary risk, mentioned in above section. And with all credit card information already stored on Ebay, the road to another purchase is not far.

By looking at the author’s last “won” items, it is clear that this addiction, and deep involvement, has led to a lot of impulse purchases (see appendix2).

The consumer refers in his diary to the pleasure of being part of a virtual society. Ebay has succeeded in mixing leisure and culture with shopping. Just as when children are visiting McDonnald’s and use it’s playground for pleasure, and making McDonnald’s an important part of the social life.

There have been done many attempts to measure involvement, as this involvement has been proved so important.

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Table 4.1 (Solomon) made by Judith Lynne Zaichkowsky measures the involvement on a scale 10-70.

But when the author was measuring his involvement with the headphones, he surprisingly found that the involvement was only 48 points. (See appendix3) The author realised that the head phones was more a luxury item to bring him closer to his ideal state, than an actual need. If the money was not there, and the dream still remained, he would probably have found another solution, or used the headphones he had. When evaluating the author’s needs, the Superego, which is also the rational level, realised the need was not that big. So even if the involvement counted no more than 48 points, the dream was still so important to the author that he could not do without them.

In contrast Ebay, which also can be considered as a product, scored 63 points in the author’s involvement evaluation. (See appendix 4)

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Conclusion

The author has with this project discovered another side of marketing communication: The subject Marketing Fundamentals covered market segmentation, and Consumer Behaviour concentrated on different levels within marketing communication.

An amateur producer with huge plans for the future can be difficult to find in segmentation, as he/ she could basically belong to all demographic and global geographic spheres. Instead, could be focused on using the traditional Freudian theory: To have appealed more to the author, Sennheiser should e.g. have had a product placement in a music video, as they sometimes show clips from the recording process in the studio. The author could have needed to have seen the Sennheiser headphone for use in a studio, to appeal to his Superego.

The consumer’s Ego needed more information on Sennheiser’s web page, in order to eliminate the rational thinking that could have threatened the choice of Sennheiser.

The author learned not only about the need of product descriptions on headphones, but of the need in general. We are now moving into an internet age, where new marketing theories on online shopping have just seen the very first light.

Retailers are now realising the big threat from online shopping, and to prepare to meet the future, it is important to realise the need of creating a bound between seller and buyer. As Ebay; mixing shopping with leisure and information search.

Companies’ attempts to power up the consumer involving can also have a very negative effect. If the emails come too regularly, it can be regarded as spam of the costumer, and have a negative effect in the future. Celebrities can also have negative effect, as a consumer might dislike the celebrity. Loud music can have the negative effect that it excludes costumers who find the music to be noise, and maybe have had a stressed working day.

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Bibliography - Books

Title: Author: Publisher: Year:

Consumer Behaviour - A European Perspective Solomon, Michael Prentice Hall Inc. printing 4th edition1999

Title: Author: Publisher: Year:

Customer Behaviour – Consumer Behaviour and Beyond Sheth, Jagdish N. The Dryden Press 1st edition 1999

Title: Author: Publisher: Year:

Consumer involvement - Concepts and Research Laaksonen, Prijo Routledge 1st edition 1994

Title: Author: Publisher: Year:

Electronic marketing and the consumer Robert A. Peterson Sage Publication 1st edition 1997

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Bibliography - Online reports

(Source: Google Scholar – www.scholar.google.com)

Title: Author: Publisher: Year:

Impact of website information design factors on consumer ratings of webbased auction sites.

Byung, Kwon O. Taylor and Francis Group Behaviour and Information Technology 2002 vol. 21 no. 6 387-402

Title: Author: Publisher: Year:

A case study of an on-line auction for the World Wide Web Tjoestheim, Ingvar Norwegian Computing Center (NR) N/A (accessed 07.03.2005)

Title: Author: Publisher: Year:

Characteristics and internet marketing strategies of online auction sellers Becherer, Richard C. Inderscience Enterprises Ltd. Int. J. Internet Marketing and Advertising, Vol. 1 No. 1 2004

Title: Author: Publisher: Year:

Giving Internet-shopping “a sense of place” Stoe, Eivind SIFO (National Insitute for Consumer Research) 2004 (Paper presented at the Third ETE-workshop)

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Appendences Appendix 1: Description:

Picture of packaging Shows the packaging of the Sennheiser HD 280. Colour is blue and grey.

Appendix 2: Description:

Item’s won This list shows the consumer’s addiction to Ebay. By looking at the different unnecessary purchases it is clear that the author does a lot of unintended bidding, and by things, such as a Gucci key ring, which is a non-rational purchase.

Appendix 3: Description:

Involvement with the Sennheiser headphones.

Shows one of the attempts to measure involvement. The author has rated him self in order to find his involvement score.

Appendix 4: Description:

Involvement with Ebay Shows one of the attempts to measure involvement. The author has rated him self in order to find his involvement score on Ebay.

Appendix 5: Description:

Koss on Amazon Good product description on this headphone, and great user ratings, but not found on Ebay, and buyer would not pay that much for a brand he was not too familiar with.

Appendix 6: Description:

AKG on Ebay One of the very few alternatives to the Sennheiser. Too short a description, and very few auctions on this item.

Appendix 7: Description:

Bose on Ebay The greatest alternative to Sennheiser, but too expensive, and marketing aimed at businessmen and not professional producers.

Appendix 8: Description:

Author’s feedback Shows all 24 positive feedbacks left for the author. Pay attention to all the positive words that are part of making the author deeply involved with Ebay.

Appendix 9: Description:

Sennheiser on Amazon Amazon was part of the search process the author went through. The price is here higher than on Ebay, but good product description.

Appendix 10: Description:

Order confirmation This appendix shows the actual purchase on Ebay, from when the author committed himself to buy, to the final transaction on PayPal.

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Diary The purchase of Sennheiser Headphones Week 1 When I was younger, I used to produce music on my computer, using my synthesiser, and a very simple setup. However, it did not take long before I realised the limitations of my equipment. I had already spent nearly £2000 on equipment, and it seemed like an never ending deep hole you could just drop money into.

New equipment was too expensive and I did not have the required technical knowledge.

Today, years later, most music can be produced using just a computer and most of the expensive hardware now come as software, which can be cracked (pirate copied) which makes it possible even for not-well off students, to get hold on professional producing equipment.

In the years that have passed, I have started singing in private, and this has opened new horizons. Though I have never played in a band or given any gigs, I still deep inside, dream about gaining success and attention. Becoming famous, being someone, and impress people with my talent.

When I was accepted on the course BA Communication and Mass Media, I chose to invest £1500 on a high end computer, in order to become a good communicator. But this computer could do more than just edit films and produce home sites. It also enabled me to get back on track, and start to producing music!

But, to produce music, you need a sound card, a microphone and some monitors that play the recorded sound. As I live in a flat, a pair of headphones would be preferred. And when recording, you need a pair of closed headphones that do not let out any external sound. Otherwise the background music would be recorded twice, and result in an echo.

I have already bought the soundcard, which I bought used for £100, and next I need these heard phones. I do also need a microphone. But I cannot use a microphone without the headphones, so in order to ever get on with my music project; I need a pair of headphones. Beside of that, they can also be used when listening to music, films etc.

I need to keep the hope alive, that I one day can become famous. Also, expressing yourself in music can give you a satisfaction that all musicians can relate to. It gives an inspiration that affects all aspects of your career and life. But, my need end up in a need of self actualisation.

Is this purchase rational? Well, in order to produce music these headphones are needed.

But I already have four pair. One for my computer with a build in microphone, one pair for sport, and two other cheap pairs, that came with my MP3 player and Mini Disc. However, these cannot monitor the sound accurately, and working with these headphones will result in sore ears.

Overall, these headphones do have many other practical functions. When I play games on the computer, my flat mates will not get annoyed, and they also monitor a perfect sound when watching a film. I live on my own anyway, and most often I listen to music and watch films alone.

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I know I have now money. But that is no news. For as long as I have been studying, I have had no money. It would make no sense to start saving up money. So I have sometimes experienced that if I just buy the things I find important, it will get sorted, in the end of the day. So I purchase what I find most important, and following pay the bill.

I have just had a letter from the bank, which fined me £70 for two rejected payments from Ebay, because I paid with the wrong credit card by a mistake, when I pressed the wrong button. This is £70 less for the month. But even if I should think rationally, and should realise I cannot afford them, this action made me so angry that I also realise the importance of becoming some body. Becoming good at what I am doing, so that I one day can tell the press “never use that bank”. Actually this action has made me much more determined that I need this pair of headphones. I got angry and depressed, and need these headphones to cheer me up. Then I can walk into my dream world, and leave out all the hassle - Maybe a need for not being a part of this world?

When I had the message that I needed to do a purchase for use in a case study, I knew I had to buy these headphones. And even my mother’s voice inside my head, which warn me from spending money, would understand that this is just a part of my education.

Beside of being of same importance as a school book, I need these headphones in order to pass my module. I have no longer any second thoughts. I must own a pair of professional monitoring headphones!

Earlier, I have had a pair of Sennheiser wireless headphones. They were not of the best quality, and I have now found out, that you need wired headphones, as there will be so much data sent that wireless will not be able to do to monitor a linear sound.

But I still remember the headphones as okay when listening to music, and had a very comfortable fit.

I also knew that Sennheiser was producing the components for Bang and Olufsen, and was known as producing good music equipment.

Even though I know a bit about frequencies, and about what is good and bad, my knowledge on headphones is extremely limited.

But though my knowledge is limited, I know already now, that I would never go for e.g.

Sony or Phillips. They do too much marketing in all kind of media, and you also see many low range products from them. They are too much of an every man’s belonging, and I want something more than that. I want something professional, and a product from a company that will not have to spend that much money on advertising to gain recognition.

I visited www.sennheiser.com to gather information on their products. I found that the box of “DJ and Studio” equipment would be what I was looking for, but I also found the “High End” interesting. Though I do not have much money to spend (or actually no money at all), I want the best of the best. Otherwise, I will never be able to produce quality music.

The information given on their home site was very limited, so I decided I would write to their costumer service, and get their advice on what to choose.

They told me about the exceptional linear sound of the HD 680. But this is an open headphone, and can not be used for recording vocals. The other alternative was HD 280, which is a closed headphone, but not as good a quality and to reproducing the sound.

On their home site there was no price information. They have decided only to sell through authorised sellers, who probably would be able to give all specific information.

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I searched for the price on www.google.com. I found that the HD 680 was a quite more expensive than the HD 280. The search also gave me some links to some forums. I read the comments. Though the HD 280 was praised to the skies, it also had some issues that costumers addressed, which made me become a bit sceptical.

The price given from authorised retail dealers was about £150. And most of the negative comments I found in the forums, were when costumers were contrasting these £150 headphones to headphones of maybe £200 or more. I did not find any headphones in same price range as the HD 280.

Then I went to a Danish site (I am Danish), to see if the price was any different. I found out that the price was very much standardised, but still, the vat was lower in UK, and the headphones in general were just expensive!

Week 2 As I have used Ebay before for purchasing electronics, and have previously experienced, that they have been cheaper, so I decided also to try them out this time.

I went on Ebay, and had following results: I also visited www.amazone.com. Here was shown, below the search result “other items buyers have shown interest in”. I saw another pair called Sonic. A brand, I have never heard of. But I am the kind of consumer, who does not like to pay extra, just for the brand.

Often those bigger brands spend so much money on marketing, and often the big size of the company and brand, does not necessarily mean good quality. I also found a pair of Koss (see appendix 5), and AKG (see appendix 6).

Here, I also found a pair of Bose (see appendix 7). I know the speakers from Bose that are of really good quality, but I did not know they were producing headphones as well.

Immediately I became interested in knowing more. I read through the user comments on Amazon. The headphones were closed, just what I needed. On every forum I found, the critics were only positive.

I found the Sonic to be too expensive on Amazon, but could not found them on Ebay.

However, I did find the Bose. But the sells price was almost the double of the Sennheiser, and I wondered, if I could hear the £100 difference. It took a lot of consideration, but I concluded that it was better to spend the last £100 on a better microphone.

Beside of that, the Bose headphones were pictures with a typical business man in a cheer, enjoying the music. But I believe businessmen often just buy expensive brands, as they believe they are better. And businessmen would of my opinion be the last persons on earth to have the knowledge on audio quality. That is a job for enthusiasts! All pictures were addressing same kind of figure, and that was not at all appealing to me.

When I signed up for my Ebay account, about a half a year ago, I had only heard a little about it. Incidentally when I searched for prices on an item online, I had a link to Ebay, where I found it cheapest.

In the beginning, I found Ebay to be quite confusing to sign up to, as there was quite a lot of security control connected to the service. However, when I took time to look closer into how it worked, it was easy enough though.

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So far, I have a 100% positive feed back and 20 Ebay points (see appendix 8). You get a point every time you deal with a new buyer or seller. I feel highly motivated when sellers leave me positive feedback for fast payment, and I want to get more positive feedbacks.

Every time, when I get another positive feedback, I feel like I have made a friend. I have tried earlier to return to a seller with a question. They have all replied, and all in a very friendly and informal manner. I really feel home there.

When I asked people about information on these headphones, and read other buyers comments I realised, that these headphones must be really good. One seller told me, he even used this pair him self for same purpose. It was now clear to me it had to be this pair of Sennheiser (see appendix 9).

First I started bidding on different auctions on www.ebay.co.uk. After having bid on the headphones for a week, I experienced that the headphones usually went for around £80.

More than I could pay. The British dealers on Ebay were authorised, and therefore, they had to stick within the recommended retail price from Sennheiser. However, on www.ebay.com (the American site) I found an unauthorised dealer selling same headphones. However, there is still two years global warranty.

I found a pair for £43 “Buy it now”, in Dollar. When you get shipped from USA, you do not pay VAT, and the Dollar is low in value at present. This could safe me a lot of money. And even the shipping is same price as shipping from the UK. I then started bidding on Ebay.com. Unfortuneatly I lost an auction, as I forgot to check the price before the auction had ended. A pair went for the price of just £35. I new then, it was possible to get them cheaper, but I decided to get this pair for £43, as I could not wait any longer.

But just hours before I should do the purchase, I had an email with answer from a seller.

He even recommended me a pair of Sony professional headphones instead. He was not selling the headphones, and risked eventually to looser a costumer, just to provide a fair and honest advice. I did not know Sony were producing headphones of this range. I looked them up on the internet, and I like the design. The design was just as boring as the Sennheiser headphones. Just what I was looking for; a pair of headphones, that were not made for looking good, but to give a better performance. Even the specs looked better than the Sennheiser’s, and I got very confused.

When I searched for the Sony headphones I learned that only two sellers on Ebay, world wide, were selling these headphones, and they went for the price of £180. Too expensive, and they must have been new on the market, since there was no competition on the price on Ebay. It was close, but I decided to buy the Sennheiser anyway (see appendix 10) Week 3 (still not arrived) Week 4.

It took a whole week for the headphones to arrive. It was expected it would take some time, and it is a pleasure waiting for the package. Everyday I come home, I hope it is there. It felt almost like the day before Christmas.

But when I finally had the slip from the post office, they have added £10 to the price. This is the first time I have ever experienced that the package had been opened and added a

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British VAT. Usually sellers over Ebay send the packages as gifts, and do not put order confirmation with sending, so it will be harder for the tax system to put the local VAT on the item. So he the seller did this time, but obviously they must have had him suspected.

It was a shame, but still the headphones were cheaper than the sales price from England.

I connected the head phones. What a sound. Oh what a sound! These headphones are worth every penny! A clear linear sound. A perfect monitoring of the sound.

Now, I had to leave feedback to the seller. Before the purchase I asked seller a question.

Often I have experienced that a private seller, or a an online seller has more knowledge and is more enthusiastic than personal in a hi-fi shop, so that you get much better service, and more clear answers.

Therefore it also gives me a satisfaction, when I politely give my positive feedback. In return, I also get some positive words. It gives some kind of satisfaction that you have made a kind of bound between the seller and you. It works as a friendly community, and next time you have a question, or seek advice, you have this network to rely on for questions on your next purchase, even if it is on a product, the seller does not sell.

The seller on Ebay will usually stick to the same account for years. It takes years to build up a very good reputation. And the account will be used both for selling and buying. In contrast, a personal in a hi-fi shop might only be employed there for a half a year, and will never again worry about you as costumer, when the employee has left the shop.

If a costumer becomes unsatisfied, it is a personal matter. The buyer might have the seller’s private address from where the package has been sent, and it is not just a matter between seller and the shop, but a matter between the buyer, and the personal that assisted you. Therefore there is this bound being made between buyer and seller, which makes Ebay this small community which I will return to next time.

I have just received another letter, from another bank, complaining about overdraft. I realised, I have been being a lot more than was actually my intention. (see attachment).

I have not yet really used the headphones as the time has not been on my side, and I wonder if it would have been smartest to wait to buy these, as I did not actually need them before next month, where my money situation was better. But with a Visa, not even on the hand, but as a button on the screen, is hard to control.

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