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What do search, the customer decision process, and NYC taxi cabs have in common?

One would think that searching online, how customers select products to purchase, and NY taxi cabs have very little in common. Or, that it’s the start of a joke. Actually both statements are wrong—a quick look at NY taxi cabs reveals a lot about customer behavior.

As Duncan Simester—NTU Chair in Management Science and Professor of Marketing at MIT Sloan School of Management—pointed out in his MIT Sloan Executive Education webinar, “Understanding the Customer Decision Process: Why Good Products Fail,” “Customers exhibit some basic behaviors when they make purchasing decisions: they search for information, they make inferences, and when they can’t search, they use observable information. But this process invariably means tradeoffs.” Continue reading