This document discusses human behavior and its impact on business practices. It describes the author's methodology, which includes personal observations, interviews, and reviewing secondary sources like books, courses, newspapers, and websites. Several sections then analyze specific examples of how human cognitive biases and economic concepts can influence marketing strategies and business decisions. These include discussions around diminishing marginal returns, scarcity marketing, and pricing models.

1. Human Behavior
and Its Impact
on Business Practices
Akhil Mehta
2006B3A8645G
Saturday 24 April 2010

2. Structure
• Story - Chapter Hybrids
• Classical - Behavioral Seamlessness
• Natural Language
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3. Methodology
• Primary Information
• Personal Observations
• Interview
• Secondary Information
• Books
• Courses
• Newspapers
• WWW
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4. How do marketeers work around
Diminishing Marginal Returns?
• What is DMR?
• Why Not Constant?
• When to Stop?
Saturday 24 April 2010

5. • Plate System - Chunks
of Utility
• Experienced & Expected
Utility OR
• Buyer’s Quantity, Money)
(Need,
Remorse
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6. How do economic concepts explain
Chache Di Hatti Closing Early?
• History
• A Typical Day
• Customer Cross-
Section
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7. • How?
• Price Ceiling
• Why?
• Wider Demographic
• Scarcity - Queues & Brand
• Time Gain
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8. 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
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9. • Gillette - MACH III Confidence Challenge
• HP - Very Low Pricing
• Things In Common
• Refillable Commodities
• Proprietary Refill Technology
• Refill Costs Significantly Higher than Competition
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10. • 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
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11. How are Pricing Models for Windows 7
Profit Maximizing?
• Consumer’s Surplus
• Producer’s Surplus
• Differential Pricing
• Examples (Water,Vegetables,
Extortion Money)
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12. !
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13. • Upgrade Editions
• OEM Editions
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14. What is common to BITSAA
International, Cypress University Alliance,
and UPSC Chaat Bhandar?
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15. • Click/Whirr In Action
• Commitment/Consistency
• Social Proof
• Reciprocity
• Amplified By
• Too Much Information
• Uncertainty
• How It All Connects
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16. What can PVR Cinemas Learn from Air
Deccan & Investment Banks?
• What Did Air Deccan Do?
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17. • 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)
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18. • 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
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19. 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
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20. • 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
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21. • 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
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22. Why do all good things come to an end?
• Diminishing Marginal Returns
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23. Thank You!
• Questions?
Saturday 24 April 2010