We, human beings, are not entirely rational. And it’s difficult to explain why we are not! Our decisions are influenced and motivated by personal biases and “wishful thinking” (formation of beliefs and making decisions according to what pleases you the most!).Hence, it seems easy to take up this irrational characteristic to build up money empires.
1. SALE AND DISCOUNT: Two words which can make any shopper’s day bright. Low price products are sold in high quantities. Also, to ensure the price is comparable to similar product in the market, this strategy is used. And needless to say, it works effectively on us!
2. FAVOURS IN DISGUISE: Remember the cash back schemes flashing when you order online using some app; the trick is even though you receive a cash back, you have to make purchase from that site first (promotion+profit on other transactions!)
3. CHOICE BLINDNESS: Sometimes we make choices that later we cannot justify. This is same as the situation when you go to a shop and buy some random things; unaware of why you bought it in the first place. Inattentional blindness affects our tactile choices, preferences, moral judgements, online consumer choices!
4. PSYCHOLOGICAL PRICING: A concept that all of us are aware of. A product that costs INR 100 is showcased for INR 99. Believe it or not, the reduction of a rupee affects our minds in buying, psychologically manipulating us!
5. BUYING FOOD: As consumers we are prone to overspending when we can smell, touch or see up a food product close. But, we are more likely to be rigid as customers while purchasing online, owing the distance and ease to withdraw the purchase. But, who buys food online anyway? (exception of online grocery stores)
6. DISGUISED DEALS: Discounting stores where everything is always on sale play this game very efficiently. Often the so-called original prices are just reference points, so that the seller can grab the attention of customers with his/her tempting discounts. A seller never really expects to sell the item at that artificial “anchored” list price.
7. PRICING DECOYS: Decoys are products, services or price points that a business does not want you to take, but rather use as a reference to make another product look better! For example, a company launching a product for Rs. 20,000 just to make another product costing Rs. 15,000 look like a better deal. And it does work!
8.FEAR MARKETING: Often marketers play up fears like – not looking good among peers (think Fairness creams), lagging behind in studies (think printers which get you good grades because now, you can print your homework!), being looked down by neighbours, missing out on the latest amazing entertainment experiences etc. Also, society seems to play along these superficial and entirely unfounded fears.
Economy prevails because of consumer spending. We, as consumers, have to be aware of our choices and preferences.