The marketing application of behavioral economics can mean more accurate insights and more satisfied customers
Behavioral economics and marketing have had a natural connection for decades. Marketing has a heritage of understanding consumer decision-making behavior and its departures from purely rational choice. For example, brands are believed to “shift the demand curve” that relates price to volume.
In recent years there has been increasing interest in behavioral economics applications in marketing that can improve business performance. While many elements of behavioral economics have great benefits for marketers, more attention is focusing on the development of capabilities to deliver the value to the organization.
The potential to use insights from research to create change in future behavior is quite different from other research traditions that support strategy development based on insight about consumer needs, attitudes and preferences. Traditional approaches provide implications for action, but don’t specify how to realize change.