Making choices, but not decisions Every time the consumers buy a brand, they exercise a choice, but do they necessarily make a brand decision? Marketing prides itself on the mastery of theories and strategies to persuade consumers to choose their brands. Marketers conjure up visions of consumers engaged in huge mental tussles of decisions about which brand … Continue reading Self-driving consumers – making choices, not decisions
Economists do not buy luxury goods, behavioral economists do! For economists, qualities of luxury goods are SIFs (supposedly irrational factors). Why would a “homo economicus” pay more for a product just because it makes one look good among peers, gives a feeling of achievement, or has been made by an overpaid craftsman in some small … Continue reading China’s luxury market – as seen through a behavioral economics lens
Chinese social media is abuzz with the Shanghai Victoria Secret fashion show and in particular about the Chinese supermodel Xi Mengyao. Xi Mengyao, sporting silver colored lingerie with wings, took a tumble while traversing the catwalk. After the fall, Xi quickly took control of herself, got up and continued her walk. One would expect that … Continue reading The Endearing Imperfection of Xi Mengyao
To a rational consumer, there should be no difference between the attractiveness of a product which is priced at RMB 90 vs. one which shows the original price of RMB 100 but is discounted to RMB 90. However, when did you last meet a rational consumer? When the product is discounted down to RMB 90 … Continue reading The Joy of Price-off
Marketers often wonder at the size of the luxury goods market in China and the extraordinary ardor and passion with which the Chinese consumers have embraced this product category. While many factors contribute to China’s status as the largest luxury consumer in the world, the “anchoring effect” from behavioral economics also provides an important explanation. … Continue reading Anchored to luxury
Wang Fuman, an 8-year-old boy from Ludian county in Yunnan province, walks a little over four kilometers to his school every day. On a cold winter morning, when he reached the Zhuanshanbao school he presented an unusual sight – the two hours walk through the frosty air had covered his hair and eyebrows with snow, … Continue reading Wang Fuman and the identifiable victim effect
