A01 chaf6542 06 se fm indd

satisficing behav-

iour

. The term ‘satisfice’ was coined by Herbert Simon in 1957 when he said that people 

are only ‘rational enough’ and that they suspend or relax their rationality if they feel it is 

no longer required. This is called ‘bounded rationality’ by cognitive psychologists. In other 

words, although consumers may seek to minimise some variable (such as price) when mak-

ing a product or supplier selection, most may not try too hard. Online, this is supported 

by research by Johnson et al. (2004) who showed that by analysing panel data from over 

10,000 Internet households and three  commodity-  like products (books, CDs and air travel 

services) the amount of online search is actually quite limited. On average, households visit 

Price variable

The element of the 

marketing mix that 

involves defining product 

prices and pricing 

models.

Pricing models

Describe the form of 

payment such as outright 

purchase, auction, rental, 

volume purchase and 

credit terms.