Psychology as a key to business decisions:
Understanding the consumer and improving marketing
DOI:
https://doi.org/10.51896/rilcods.v5i48.321Keywords:
Decisions, Psychology, Strategy, Marketing, Behavior, Finance, ConductAbstract
The impact of psychology on business decisions occurs in various aspects, such as consumer behavior, marketing strategies, organizational behavior, and purchases. In this article, we provide an overview of how psychology shapes business decisions by highlighting the importance of integrating psychological insights into business operations; we also emphasize the need for more research to improve our understanding of the intricate relationship between psychology and business. In recent years, two fields of study have gained popularity: marketing and applied psychology. Marketing focuses on delivering value to customers and explores how human psychology influences business decision-making. These fields complement each other and can be used to understand and influence consumer behavior efficiently. Research has found that people's trading decisions are not always rational and are often influenced by cognitive biases such as loss aversion, framing effects, and overconfidence. As a result, people make suboptimal decisions, such as overpaying for insurance, making risky investments, and making unnecessary or risky purchases. Psychological insights can be used to understand and predict how marketable are perceived, valued, and used by consumers, which can help companies design effective marketing strategies.
References
Aaker, D. A. (2019). Building strong brands (11th ed.). New York, NY: Simon & Schuster.
Aaker, D. A., & Keller, K. L. (2016). Consumer behavior (12th ed.). New York, NY: McGraw-Hill Education.
Aaker, D. A., & Keller, K. L. (2016). Strategic brand management: Building, measuring, and managing brand equity (10th ed.). Pearson Education.
Aguinis, H., & Pierce, J. L. (2017). The psychology of motivation in the workplace. Sage Publications.
Alberti, M., & Garrido, M. (2017). The role of psychology in business: A review of the literature. Frontiers in Psychology, 8, 1610. https://doi.org/10.3389/fpsyg.2017.01610
Amir, E. (2009). Integrating psychology into business operations: Challenges and opportunities. The Psychologist-Manager Journal, 12(1), 3-19. doi:10.1037/a0015295
Ariely, D. (2008). Predictably irrational: The hidden forces that shape our decisions. New York, NY: HarperCollins.
Bazerman, M. H., & Neale, M. A. (2013). The negotiation paradox: Why we agree to less than we deserve and how to get what we want. New York, NY: Simon & Schuster.
Cialdini, R. B. (2009). Influence: The psychology of persuasion. New York, NY: HarperCollins.
Dolan, P. (2002). Upside: The hidden logic of financial decisions. Boston, MA: Harvard Business School Press.
Duhigg, C. (2012). The power of habit: Why we do what we do in life and business. New York, NY: Random House.
Henderson, M. D. (2019). The psychology of business: How psychology influences business decisions and behavior. New York, NY: Routledge.
Kahneman, D. (2011). Thinking, fast and slow. New York, NY: Farrar, Straus, and Giroux.
Kaplan, R. S. (2018). Short-term orientation: The problem and the solution. Harvard Business Review, 96(10), 52-62.
Keller, K. L. (2013). Strategic brand management: Building, measuring, and managing brand equity. Upper Saddle River, NJ: Prentice Hall.
Kihlstrom, J. F., & Klein, S. B. (2014). Psychology and business: Past, present, and future. Annual Review of Psychology, 65, 541-568.
Maheshwari, A., Seth, A., & Gupta, S. (2016). An empirical approach to consumer buying behavior in the Indian automobile sector. Journal of Business Research, 69(10), 4407-4412.
Pink, D. H. (2011). Drive: The surprising truth about what motivates us. New York, NY: Riverhead Books.
Shiller, R. J. (2015). Irrational exuberance (3rd ed.). Princeton University Press.
Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. New Haven, CT: Yale University Press.
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Usted es libre de:
- Compartir — copiar y redistribuir el material en cualquier medio o formato
- Adaptar — remezclar, transformar y construir a partir del material
Bajo los siguientes términos:
- Atribución — Usted debe dar crédito de manera adecuada, brindar un enlace a la licencia, e indicar si se han realizado cambios. Puede hacerlo en cualquier forma razonable, pero no de forma tal que sugiera que usted o su uso tienen el apoyo de la licenciante.
- NoComercial — Usted no puede hacer uso del material con propósitos comerciales.
