Behavioural Economics.

This sets us apart.

We humans are irrational. Real-world Consumer behaviour is far from the implications of the Economic model, and this irrational behaviour is what makes understanding the consumer psyche so important to marketers.

Science fiction author Robert A. Heinlein states : “man is not a rational animal; he is a rationalizing animal.” Simply put, we always try to explain our behaviour. 

IMPLICATIONS OF BEHAVIOURAL ECONOMICS

1. WE AS CONSUMERS ARE MUCH LESS RATIONAL THAN WE THINK WE ARE

Decision-making is emotional & instinctive. A consumer wouldn’t really be able to answer why they prefer Brand A over Brand B. Probe them further and they start to give functional reasoning, but there is always an emotional reason behind every purchase.

2. WE CAN BE SUBCONSCIOUSLY PRIMED TO ACT

Stimuli can sometimes invoke different actions without our awareness. This is called priming. The mood, tone & visual language of a brand is a form of priming. We can create visual and verbal stimuli for the consumers to act.

3. WE USE MENTAL SHORTCUTS TO MAKE DECISIONS

Humans are instinctively lazy. 

This is where we take shelter of Heuristics. Heuristics are a problem-solving method that uses shortcuts to produce good enough results. They are a flexibility technique for quick decisions particularly when dealing with complex data. The idea is to make the calculation easy. Instead of saying 25% off, a brand could say Save INR 200. Same message, but deeper impact.