Question

The nature of a decision process and its rationality are empirical questions that must be addressed by primary field study, experimental tests, and other means. But whatever your view about the sophistication and rationality of decision making, your models must conform to certain basic principles.

a.         Explain the principles of modeling human behavior (700 words)

Answer 1

1. Priming

Priming means providing a key word, a sentence or an image to make the potential customers more receptive to a particular view point. The marketing experts can make use of subtle priming techniques in order to push the brand. The foot-in door technique asks customers to do small tasks in order to prepare them to do larger tasks involving financial payment. For example, signing up for free e-mail newsletter might gradually lead to buying a subscription for paid newsletter.

2. Reciprocity

There is more chance that people would make a decision to purchase or buy in return for accepting a favor. It is more likely for a person to buy a gift for someone from whom he or she had received a gift earlier. Small gifts, complements or a service without expecting something in return etc that the enterprise gives to it's customers will have a huge impact on them. The ordinary customers would feel that they are in a moral obligation to buy from them or at least be in touch with them.

3. Social Proof

It is common for people to ask others about a product before buying it. If people are not sure about a situation, they will try to imitate others. Most people would like to peep into others lives. Marketing experts can make use of positive online reviews, customer case studies, videos showcasing customers, trust seals etc to influence customer behavior. Amazon's success owes much to it's intelligent use of social proofs and customer reviews.

4. Scarcity

People would buy a thing, even if they do not want it immediately, if they hear that there is a scarcity coming. If there is supply shortage for a product, the demand for the product will normally increase. Price also can be kept at a high level. Still people would buy it. It becomes a matter of their pride. The apple products use this model to influence the behaviour of its customers. The buzz created by a lack of supply will help in the long term.

5. Anchoring

The decision making behaviour of people get unconsciously affected by the first fact or news they hear about the product. Mostly they would not try to bother about its accuracy. Anchoring is giving a best impression in the first instance itself. In case of a website, if it can convince its viewers at the first look itself that it can solve their problems or answer what they look for, they would stay and come into a business relationship.