Are you a business owner having challenges marketing your products and looking for a solution? Or maybe you want a new marketing strategy to take your business to the next level? Whichever the case, you should consider integrating behavioural economics into your branding and product marketing. Below are some ways through which behavioural economics can improve the marketing of your products.
What Is Behavioral Economics?
Behavioural economics is essentially a study of psychological and economic elements to understand what makes people behave the way they do and how they do it.
According to Richard Thaler, a distinguished professor at the University of Chicago, several factors guide the making of economic decisions among individuals. He argued that people are less willing to give up on heavily invested projects because of emotionally driven choices. Understanding how behavioural economics works could be the first step in taking your business to the next level.
How Behavioral Economics Can Affect Product Marketing
As human beings, it is in our nature to have preferences, and this applies to the kind of products we buy at the market. Consumer preference is the tendency of people to purchase products they most prefer.
Businesses at times apply the concept of behavioural economics unknowingly; for example, the idea of buy two get one free is a common thing in most retail shops. In Behavioral economics, this incentive in businesses is referred to as the “power of free,” where people prefer what is supposedly free over the equivalent discounted price.
Ways In Which Behavioral Economics Is Used In Product Marketing
In product marketing, you must persuade a consumer to purchase your brand and product instead of saving the money for another use. Influencing a customer’s purchasing decision is an art that most businesses ought to master to make more people buy what they sell. Below is a summary of a few ways behavioural economics stages can be used in product marketing.
- Reducing The Purchasing Pain Endured By A consumer
When consumers are allowed to pay for the products later, there is a high chance of sales going up. You should be able to risk enabling buyers to accept your products on credit to increase sales. The consumers’ willingness to buy your products on delayed payment could potentially increase the sales as a result of more people going for this option.
- The Default Option
If the option of reducing the pain of purchasing does not work effectively, you may have to go for the default option, which you get if you are confused about the decisions you ought to make. When people are overwhelmed with choices, their thinking becomes irrational. For a business, this is when you instil a perception of product ownership in people even before the purchase.
- Reducing The Burden Of Consumer Choice
This option follows when the power default of the default option diminishes. If the buyer gets overwhelmed by choices, this reduces the number of sales. By decreasing the choice overload of consumers, they can make purchase decisions faster.
- Carefully Position Your Preferred Option
Once you have exhausted the above options, the last thing you should do is offer an inferior option. If all efforts to increase sales have failed, you may have to make an unpopular move, such as increasing the price of products with a long-term goal of bringing in better outcomes. While the sale of current products may not necessarily increase, it may lead to the sale of better and higher quality products that the store initially wanted to move.
In any business, it is necessary to have a business plan that addresses all parameters, from how the product is sourced to the point of sale. You should ensure that you clearly understand the consumers you are dealing with to guarantee sales.
In addition to striving to compete fairly, your business must study its consumers’ behaviour and consumption patterns to reap maximum benefits from increased sales. You should be able to assess the tastes and preferences of your consumers for the business’s gain.
The different stages of behavioural economics paint a picture of how business sales can skyrocket with just just a few small changes. As a business, make sure you have harnessed the power to influence the product choice of your customers.
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