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Lionel Robbins in his book, “An Essay on the Nature and Significance of Economic Science” has given a definition for economics through the lens of scarcity. The definition is given by him is imperative even now. He defined,

“Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”.

                                                                                                                             – Lionel Robbins

Scarcity of any commodity creates demand for it and that demand leads to higher price ( based on demand curve).

Robert Cialdini in his famous book “Influence: The Psychology of Persuasion” has mentioned “Scarcity principle” can be used in persuasion. His article titled “The Science of Persuasion”  he explains how scarcity can influence people and how marketers use it influence consumers. This article explores about the use of scarcity in marketing context to persuade consumers. Before getting into the literature, let’s have a look at an example of scarcity effect in marketing.

Online platforms like Amazon, Ebay, Flipkart and many other websites mostly creates this scarcity effect to influence consumers to buy product. Take a look at the picture given below to get a good grasp of practical use of scarcity appeal.

Scarcity Appeal.jpg

Image source: Amazon.co.uk

While browsing Amazon.co.uk to buy a printer I found a product listed with only 7 units left in stock. Probably this may not induce me. However, if there is only one unit left in stock. This will trigger my unconscious, emotional part of the brain. When the emotional part of the brain is triggered, fundamental rational evaluation of a product gets defied.  I will end up in buying the product assuming I will lose it, if I don’t buy now. Scarcity appeal is effectively utilized by Udemy (an online learning platform) to sell most of the courses offered by them.

Researchers have found why scarcity triggers to take decision. Robert Cialdini (2004) has explained scarcity does not only create demand it also makes any information persuasive. Amram Knishinsky, a student of Robert Cialdini studied the influence of scarcity messages and found that the order for wholesale beef buyers increased by 600% when they were told “about shortage of the product” by a phone call.

In another study by Rajneesh Suri et al focused on how consumers process price information and how it is influenced by perceived scarcity. This study revealed perceived scarcity of motivated consumers influence price processing only when they buy product that are of high value, branded, superior image oriented with accpetable price ranges.  In case if marketer wish to promote low priced product to motivate consumers they need to use differential advantage of the product. Scarcity appeal for less motivated consumers low price with scarcity appeal works well . An article by Michael Lynn(1991) conveyed, scarcity create a “least available products are most valuable” image  in consumers mind and are influenced to take a decision.

Scarcity Appeal 1

Image source: http://cdn.business2community.com

Looking at these studies, it is clear that scarcity certainly influence consumers. Their decision-making varied based on the perceived scarcity and their motivation levels. Hence, a marketer to trigger consumer buying behaviour they can use taglines/ promotion messages like “Limited Edition”, “Offer till October 20”, “Offer until stocks last”, “Early bird promotion”, “Limited seats only”, “Filling up fast” and so many similar to this. However, a care is need when they encounter customers who are highly motivated and less motivated.

 

 

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Bangor University – Serendipity Fair


On 24th September, 2017 Bangor University Serendipity fair welcomed the entire student community across the globe. Over 100 societies, 50 clubs for sports, and around 30 different volunteering projects – the entire PJ hall and parking space at the back and front the main arts building were jam-packed. Just imagine a society – get into serendipity fair and you will certainly find it, if not start one on your own. Wow, that is how students are empowered at Bangor University.

Serendipity Fair - Bangor University

Bangor University – Serendipity Fair

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Psychology department at Bangor University


Consumer behavior is a fascinating subject. I have always wondered why am I crazy about “free” stuffs – even though I don’t require the product, if it is offered for free I used to get and stock it up unused. That’s really meaningless and defy fundamental laws of economics and psychology. When in need we will buy and use it, when it is offered for free we don’t really question our needs as such and we forecast ourselves that we will use it in future. Fundamentally, we break our cognitive thoughts and take most of decisions emotionally. I hope you will feel the same. Looking at these bewildered behaviors, I thought I should study further more. When I looked up, I found UK is consistently exploring behavioral changes and it is the first country to establish its own nudging unit. I started to scout for colleges in UK that combines economics, psychology and neuroscience in the curriculum that can suit my palate. “BANGOR UNIVERSITY” stood apart from the entire crowd.

Bangor university amused me with its psychology department. The department is filled up with witty and nerdy professors. It also offers unique degrees to cater the specific needs of students around the globe. I would certainly second what the university says “Think Psychology, Think Bangor”.

On September 20th, 2017, all the postgraduates had to gather up in the Lecture hall 5 & 6 of Wheldon Building for the induction. This blog focuses on the induction program.

Dr.Paloma Mari-Beffa, Director of Graduate Studies begun the session with her tales of two students. One student being Miguel and another being Gema. The two students are extremely opposite and found to be same on one character called “resilience”. Dr.Paloma talked on the power of resilience and how it can help in the future.

Dr.Paloma

Dr. Paloma Mari-Beffa on the power of resilience

Next session was handled by Dr.Lloyd Tracey (Director of Student Engagement), an amazing and witty professor I would say. She introduced about the department society, student society, psychsoc and on student activities. She made the crowd to smile with her witty comments. She is humorous 🙂 View full article »

Bangor University – Welcome Week Experience


Ten year dream to pursue studies abroad came true on 13th September 2017 after I landed up in Manchester airport. Bustling airport witnessed something different at the arrival and immigration. Students from different parts of the globe queued up at the immigration section with their CAS (Confirmation of Acceptance of Studies) and I was one among them. A bunch of international ambassadors from Bangor University gathered up near the end of the arrival section to greet and take us up to the university.

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Powish hall – Day 1 started with free breakfast

The very first day after arrival student ambassadors of Bangor university took new students around the Bangor and made us feel at home. Students ambassadors primarily focused on where to go for shopping, showed up landmarks, told us what to buy and what not to buy and many more. Ambassadors are informative, energetic, enthusiastic in tell stories about their studies at Bangor university. View full article »

Why you shouldn’t believe in Modi’s survey results


Demonetization of higher value notes has caused havoc in India. Modi’s government promised that the situation will ease off in 50 days time. People are looking forward eagerly to get back to their normal life. In between, Modi wanted to know what people feel about the action taken on black money. To get feedback about the new move, he used Narendra Modi app to gather information . The app needs personal data including your voter ID (complete information about the app is discussed here). The app gathered feedback on the new move. Around 5 lakh people have responded to the survey within 24 hours. The results were published by Shri.Narendra Modi via different social media network. Details about the survey are given here.

survey

But the results shared cannot be generalized to the population. Why it cannot be generalized?. Because it doesn’t follow any statistical principles. Let’s get ahead with one question and some discussion on the survey results. Then you will find, why the survey results are not right.

  1. Does the survey include everyone who represents India? Like rural, urban, literate, illiterate, different geographic location, income based classification, and other parameters. The sample has to be drawn in such a manner that the sample represents the entire population not only a particular set of people.
  2. 5 lakhs out of 1.25 billion is just 0.04 percent of the entire population. 0.04 percent of the population, who don’t really represent all the sectors of India can’t give a bigger picture.
  3. Total smartphone users in India is 292 million people. Only 1.7 percent, out of it have responded to the survey. Only people, who are affordable to avail internet services has responded to the survey.

People who are standing in the queue will never find time to respond to the survey. Hence the results can’t be generalized to the entire population. Results published is a summation of opinions of hardcore loyal fans of Modi government.

 

The Psychology of Price – Book review


Leigh Caldwell is an expert in pricing and behavioral economics. He wrote an engaging book titled  “The Psychology of Price” . Book only talks about how to set price for a product and how to manage it. The book has 19 chapters in it and right from the first chapter, the author explains various aspects of pricing using a story of “Chocolate tea-cup” product made by Maggie. Even though the story is fictional the lessons are real.

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Source: Amazon.in

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Learning R Programming Faster


R programming is an open source software programming available for data analyst and researchers. 23 years back it was developed by John Chambers and it was called as S Programming. Later this was developed by Ross Ihaka and Robert Gentleman and was named as R Programming. By the year 2000, a stable version of R got released. It is now developed by R development core team.

This language makes the job of data scientist easier compared to any other software available in the market. It is growing at a faster pace compared to other languages like Python, SCALA,SAS, SPSS and so on.

r1

Growth of R programming – Source: https://onlinecourses.science.psu.edu

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Why Professors abroad inspire me


By 2010, I sent an email to Prof. Parasuraman and Prof. Valarie A Zeithamal to discuss about my MBA project work. I used SERVQUAL model to assess the after sales service quality of Shankar Energy Private Limited, Chennai. I knew that the model can be used for analyzing service quality of any company, I doubted whether the same questionnaire can be used for analyzing after sales service quality.

Since it is a research project you must validate your questionnaire. It is not fair to adopt any questionnaire simply without any literature back up. I mailed Prof. Parasuraman and Prof. Zeithamal. I was surprised, I got a reply back from them just in a day. I have sent mails to some Indian professors too, they never replied me back. Does that reply worth appreciating?. Yes, why not?. They are prompt and they acknowledge you, they value your question. This is not the end, there are many common things that really inspire me to stay in the same profession. View full article »

Decisions in real life


For the last two years, I have spent part of my time in reading about how humans make decisions. I have bought books like Predictably Irrational by Dan Ariely, Thinking Fast and Slow by Daniel Kahneman, The Art of Thinking Clearly by Rolf Dobelli, Nudge by Richard Thaler and Cass Sunstien, Misbehaving by Richard Thaler and Decisive by Chip and Dan Heath. I’m yet to read Misbehaving and Decisive. I just thought to share what I have learned from the books.

Humans are thinking that they are taking rational decision in their life. Rationality is actually questioned by the books that I have mentioned above. Given a choice (imagine you are dieting), would you like to consume chocolate cake (your favorite one) or raw vegetables. You can pick only one out that. What will you choose? Both are available at free of cost. Will you pick up veggies or will you prefer chocolate cake?. Think about it. I don’t really know what you are going to pick up. Yet this is what you really face everyday, you want to work hard and reduce your weight and get fit. View full article »


இறுதி சுற்று படம் பற்றிய விமர்சனத்தை நான் இங்கு எழுத முயற்சிக்கவில்லை. ஆகையால் நீங்க அதை தேடி இந்த பக்கத்திற்கு வந்து இருந்தால் என்னை மன்னிக்கவும். ஒரு படத்திற்கு எதற்கு தடை விதிக்க வேண்டும் என்ற கேள்வி பலரில் உள்ளது. நான் கல்லூரியில் நுகர்வோர் மனநிலையும் அவர்களுடைய குணம் பற்றி பாடம் எடுக்கின்றேன், அந்த வகுப்பில் நான் கலாச்சாரம் அதை ஒட்டிய வணிகம் என்ற தலைப்பை பற்றி பேசும் பொழுது, திரைப்படம் ஒரு பங்கு வகிக்கின்றது. என்ன அது? . ஒரு ஊரின் கலாச்சாரத்தை அறிந்து கொள்ள வேண்டும் எனில், அந்த ஊரில் இருக்கும் மக்களை நன்கு அறிந்துகொள்ள வேண்டும். அதே நேரத்தில் அவர்கள் பார்க்கும் ஊடகங்களை நன்கு ஆராய்ச்சிக்கு உட்படுத்த வேண்டும். அந்த ஊடகம் நிச்சயமாக மக்களின் கலாச்சாரத்தை வெளிபடுத்தும் என்பது தான் அந்த பாடத்தின் முடிவு. ஆக ஒரு படம், கலாச்சார சீர்கேட்டை பதிக்கும் ஆயின் பிற்காலத்தில் அவை தான் தமிழ் நாட்டின் கலாச்சாரம் என்ற முடிவுக்கு வந்துவிடுவார்கள் நம் சந்ததியினர்.

சரி, இப்பொழுது படத்தை பற்றி. படம் பார்த்த பிறகு என்னுள் சில சிந்தனை ஓட்டம், ஒரு ஆசிரியனை (பயிற்சியாளரை) சுதா அவர்கள் சித்தரித்த விதம் எனக்கு பிடித்து இருந்தது. என்னவெல்லாம் பிடித்திருந்தது என்று பார்ப்போம்.

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