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Behavioral Economics & Impact on Business Practices
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Behavioral Economics & Impact on Business Practices

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Study Oriented Project at Birla Institute of Technology & Science

Study Oriented Project at Birla Institute of Technology & Science

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Behavioral Economics & Impact on Business Practices Behavioral Economics & Impact on Business Practices Presentation Transcript

  • Human Behavior and Its Impact on Business Practices Akhil Mehta 2006B3A8645G Saturday 24 April 2010
  • Structure • Story - Chapter Hybrids • Classical - Behavioral Seamlessness • Natural Language Saturday 24 April 2010
  • Methodology • Primary Information • Personal Observations • Interview • Secondary Information • Books • Courses • Newspapers • WWW Saturday 24 April 2010
  • How do marketeers work around Diminishing Marginal Returns? • What is DMR? • Why Not Constant? • When to Stop? Saturday 24 April 2010
  • • Plate System - Chunks of Utility • Experienced & Expected Utility OR • Buyer’s Quantity, Money) (Need, Remorse Saturday 24 April 2010
  • How do economic concepts explain Chache Di Hatti Closing Early? • History • A Typical Day • Customer Cross- Section Saturday 24 April 2010
  • • How? • Price Ceiling • Why? • Wider Demographic • Scarcity - Queues & Brand • Time Gain Saturday 24 April 2010
  • HP/Gillette Marketing Strategy of Lowering/Eliminating Prices • Click-Whirr Responses • Too Much/Too Less Information • Non Intuitive Information • Uncertainity • Examples • Scarcity • Reciprocity • Commitment/Consistancy • Social Proof Saturday 24 April 2010
  • • Gillette - MACH III Confidence Challenge • HP - Very Low Pricing • Things In Common • Refillable Commodities • Proprietary Refill Technology • Refill Costs Significantly Higher than Competition Saturday 24 April 2010
  • • How Does it Work? • Click/Whirr Triggers • Reciprocity • Commitment/Consistancy • Increase in Number of Printers/Razors in Target Demographic’s Hands • Rightward Shift in Complementary Good’s Demand Curve Saturday 24 April 2010
  • How are Pricing Models for Windows 7 Profit Maximizing? • Consumer’s Surplus • Producer’s Surplus • Differential Pricing • Examples (Water,Vegetables, Extortion Money) Saturday 24 April 2010
  • ! Saturday 24 April 2010
  • • Upgrade Editions • OEM Editions Saturday 24 April 2010
  • What is common to BITSAA International, Cypress University Alliance, and UPSC Chaat Bhandar? Saturday 24 April 2010
  • • Click/Whirr In Action • Commitment/Consistency • Social Proof • Reciprocity • Amplified By • Too Much Information • Uncertainty • How It All Connects Saturday 24 April 2010
  • What can PVR Cinemas Learn from Air Deccan & Investment Banks? • What Did Air Deccan Do? Saturday 24 April 2010
  • • Why with Cinema Halls? • High Fixed Costs, Low Variable Costs • Similar Target Demographic • Differential Pricing already exists, Profits Leaking • Recommendation • Use Model A/B Depending on Situation • Make Tickets Non-Transferrable • Implications • Comparatively Greater Profits, Hit or Flop! (Tickets & More) Saturday 24 April 2010
  • • Cinema Hall Issue - Sell A Show • Hall Owner and Prospective Customers Negotiate a Price for the show • Issue Purchaser decides Price, Uses Ticket Window + Own Network for Distribution & Mitigates Risk for Hall Owner • Extra Revenues are his/her to keep • Has Precedent In Airlines Industry Saturday 24 April 2010
  • Object Oriented Management (Intro) • Computer Programming & Management • Solution Development Approaches • Similar Paradigms may work in both • Translating selective concepts from OOP and finding managerial equivalents Saturday 24 April 2010
  • • Abstraction • Breaking down Big Problems into Mutually Exclusive-Collectively Exhaustive Sub-Problems • eg. Arranging a Guest Party has Making Tea as a Sub-Task • Making Tea too has sub-tasks, and Arranging a Guest Party may be part of an even bigger piece of work • In Programming, Implemented Using Functions - eg. Multiplication Table Program uses * function Saturday 24 April 2010
  • • Encapsulation • Hiding specific details of functions from the function which sends messages to it • Especially Useful in Delegation and Outsourcing • Frees up Resources, both Human (in Management) and Computer • eg. Household Help who makes Tea In the Guest Party Saturday 24 April 2010
  • Why do all good things come to an end? • Diminishing Marginal Returns Saturday 24 April 2010
  • Thank You! • Questions? Saturday 24 April 2010