Consumer Psychology
The use of psychology and emotions for enticing consumers,
keeping them satisfied is something you would come across every day.
Few things you have noticed daily would be
1.
Flash sale at heavy discount by Amazon or
flipkart etc
2.
Free free free – take one get two free!
3.
Limited edition available – booking started
4.
Natural ingredients from flower to neem in soap!
The above all involve application of consumer
psychology principles.
The base psychological principle is
“ Pricing is based on value to the customer
” .
Flash sale and heavy discounts (Psychological
principle used is Anchoring)
The favourite mobile with MRP 70,000 being
available to you at 30,000 for one hour and 40,000 for next one hour. Here, the
customer mind gets anchored at 70,000 irrespective of its merit. Now when
he/she sees the “offer”, the mind drags customer to get the offer. The thought
process revolves around the anchor set by initial pricing. The customer will
start discussion on how he got big offer in the portal because he was on time.
Thus, a rat race is set up where turnover increases and sales raises.
Free Free Free
The diwali and other festival times are
filled with offers of “free free free”. The branded shirt near your store would
be putting, buy one shirt get one free.
The customer feels that he should not “miss”
the opportunity as offer is short as festival days. Customers expectation and
calculation revolves around the bundling. The customer is prompted to think of “what
he gets and not think about any negatives – quality or model etc”.
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| source: wikimedia |
Limited edition
The need to be unique, different, able or
esteem is underlying principle behind the limited edition. By just adding a
sticker or an accessories, the seller is able to increase the price of all
products. The most important addition in limited edition is limited.
Natural
Currently you can see visualization of
neem, rose, jasmine and hell lot of things going into products from shampoo to
soap to bathroom cleaner. The advertisement create a visualization (which is
written in smallest possible font at bottom of advertisement) to imbibe the
feeling of closeness to nature. All the emotions, moods, feelings of humans are
developed from the nature. The easiest emotional connect it is able to make in
countries where nature is close to heart is to show that wonders of nature are
in the product they buy. Next time you wonder how much quantity of “real
natural products” are added, please check the contents of the bottle. The perception
of humans is utilized heavily in marketing of many health, cosmetic and lot of
other products. See tv for a few hours, find some cool examples to quote for
consumer behavior in case question comes in UPSC exams.
Bundling of Products
Have you seen two mobile phones with
exactly same configuration? Have you seen mobile plans with exact same
configuration?
Eg: Telecom ARTL plan : 330 sms free +
Roaming free+ 1.7 GB per day free
Telecom RLNC : 700 sms free + roaming free + 1.5 GB per day free
It is not difficult for RLNC to match brand
RLNC plan, but the difference ensures that the two do to fight to compete to
lowest value for their product. Also it appears to loyal customers that one is
doing better than other in giving them value (offers). The “fight” creates
enthusiasm among followers of a plan. It would be designed in a way that at the
end you feel “yeh sahi hai” even if it may or may not be.
The technique is to couple many things of
multiple value and then it becomes difficult to calculate individual value. The
personal preferences of sending msgs or downloading would affect the plan
customer, but overall value and pricing is difficult to compare with the
bundling. It creates competitive equilibrium.
Asymmetric dominance (customer finds the
price ) –
The popular “healthy” muesli would be
having many flavours. The company at the same time would add nuts&raisins
or apples&oranges or fruit kick or chocolate or anything in world to the
healthy drink. Now there will be plain muesli which might be rock bottom priced
and many with additional components (nuts&raisins or apples&oranges or
fruit kick or chocolate or blah blah) . Here the price can be hiked sky high
with additives as it possible to create a feeling that value is created through
presence of additives. The value also comes from time saving factor, where the
customer would have tedious job of adding the ‘tutti frutti’ to make it rich in
apples , grape etc. Here, the customers value of product is set by the base
price and then mind builds value to the next range of products. Also, in a
customer centric world, it may become fashion to buy the healthy muesli
combined with tutti frutti than ‘just plain’ since it is cheap and may come in
not so attractive packet.
There are endless principles of psychology
related to consumer behavior. I will write about more in later articles.
