Learnings from the Corporate Usage of Behavioural Economics - Market Research & Behaviour analytics

Learnings from the Corporate Usage of Behavioural Economics

ByHimanshu Vashishtha

Learnings from the Corporate Usage of Behavioural Economics

To an industry insider, marketing tactics may seem manipulative as they are designed with the specific aim of making consumers feel the want for a product and nudging them to buy it. Behavioural economics and neurosciences aid in this very process by helping to understand consumers more and decode their purchase decisions.

While on the outside, it may seem like the public sector would make better use of behavioural science for research methods, the truth is quite the opposite. Private or corporate sectors are more diligent about understanding their consumers better and giving them better experiences in order to avoid alienating them.

How does the corporate sector utilise behavioural economics?

The corporate sector has a more advanced and thorough approach to incorporating behavioural economics in its research methodologies

Advanced technology, resources

The public sector has limited resources and access to superior technology and funds. For example, testing with a focus group itself may be challenging. In stark contrast, the private sector has larger fund allocations for processes to be done multiple times to derive the desired results. For example, it utilises eye-tracking technology to follow an individual’s gaze. Sensory tracking, facial coding etc. help to study the real-time emotions of target audiences. Sensors to measure heart rates and brain scan tools help to measure a person’s responses and reactions to stimuli.

Differences in message delivery

While the public sector still uses prints and letters, the private sector uses advertising and other media to deliver its messages. It makes use of virtual reality, haptics etc. to enhance the experience of target audiences. Haptics enables sensory feedback from digital devices and accentuates visual and audio experiences. High-quality haptics enhances persuasion and the impact of experiences. For example, for a liquor ad, the sensation of stirring a cocktail can be digitally experienced.

Precise group definitions and segmentation

The public sector works with broad sections of people. Whereas, the private sector has more defined group segmentation for better targeting and even more precise context segregations. This way, interventions are more impactful with better results and inferences.

Faster evaluation

The requirements of the private sector are short-term like the impact of a particular marketing campaign on the sales of a product or brand. Advertisers even track how consumers how and when consumers use specific products and redesign existing sales strategies or devise new strategies as required. Whereas the public sector has more long-term questions to be answered like understanding long-term educational results.

Factoring in networks

The private sector encourages brand endorsements and sharing of experiences from celebrities and first-time users to spread the word about new products. A celebrity talking about a new product does much more to boost sales than any other advertising campaign. The public sector, however, does not utilise this technique to spread messages. They should choose people with influential and larger networks to spread messages and interventions like increasing vaccinations for children, tax compliance etc.

More research

Despite the use of all the above, technology like haptics and eye-tracking sensors, better focus groups etc. companies still feel that a lot of money is wasted on advertising without the support of adequate insights from behavioural economics. And there is more research required to utilise the potential and improve results. If this is the case with the private sector, it goes on to say that the public sector needs to do a lot more to channel and capitalise on the usage of behavioural economics for better and more effective results.

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