Behavioural Economics and the Shaping of Consumer Perception of Brand Value

I have always believed in the science of marketing. This is because it is systematic, logical, and can be replicated. This is why marketing professionals thrive in different industries. They have mastered the art and science of marketing. The social science of human behaviour and how it affects people's economic decisions is one of these sciences; it is known as the behavioural sciences. One of the things I like about it is that it takes a “Rare Breed” approach to traditional economics by going beyond the rationality of human decision-making based on cost and utility. It sees decision-making as influenced by emotions, biases, and habits. The concept reinforces the importance of understanding consumer trends and behavioural patterns and how they influence brand perception. This is because people buy based on perception. Ever wonder why a person will choose one brand over another even when they obviously offer the same value and are at the same price point? In this article, I will discuss how behavioural economics influences the perceived value of a brand.

Behavioral economics has had a significant impact on the evolution of marketing and branding. We saw it even in Marty Neumeier’s book, "Brand Gap," where brand building moved from product features to creating an identity and humanizing the concept of branding. This is because marketers have begun to understand that decision-making is not only based on rationality and utility but also on the biases and emotional triggers of the consumer. In addition, Raja Rajamannar, Mastercard's Chief Marketing and Communications Officer, highlighted in his book Quantum Marketing: Mastering the New Marketing Mindset for Tomorrow's Consumers the need for businesses to change their marketing strategies to be more customer-centric. He noted that consumer values and technological adoption are changing. It has birthed a new type of customer. Hence, the need to develop new strategies to cater to these changing values. I couldn’t agree more with this, as we will see how implicit and explicit biases have influenced consumer decisions and their ability to connect with brands. 

Today, consumers define value. According to Google’s 2022 search report, consumers are bothered about the future and are constantly looking for items and experiences that provide “good value." This begs the question: what exactly is "good value"? The report further highlights that value is beyond price points, as consumers are looking for trustworthiness, popularity, and sustainability. This means that authenticity and social proof will be major determinants of value for a consumer. It further proves the rationality behind Maslow's hierarchy of needs, which influenced the Map & Fire elements of value framework. Brands should then position themselves as genuine in order to gain consumer trust. They should also increase their influence on the minds of consumers. They should also show that they care about the planet and express that across their marketing mix.

Furthermore, contrary to the assumed individualistic nature of new consumers, the Google report shows that humans are gravitating towards their social nature through communities, with a 40% increase in global community search. Therefore, brands are advised to create or harness existing communities in order to fully benefit from the cluster of like-minded individuals.

In conclusion, the brand-consumer landscape is changing. Companies can develop brand strategies that appeal to consumer emotions and biases by considering the psychological, emotional, and social factors that affect decision-making. As a result, customers are more likely to base decisions on perceived value than actual cost, and businesses can influence consumers' perceptions of value to be less dependent on price. A switch in the determinant of value puts more power in the hands of the consumer. It further reinforces my statement about everything revolving around the consumer. They should be the alpha and omega of your strategies in order to win.