From Logic to Longing: The Dance of Irrationality in Consumer Mind

Few weeks ago, I went to a super shop called Daily Shopping, with my wife to buy a special imported shampoo and went out with more than 10 different items. Most the items were unplanned purchase and had consumer offers. I know its not only my wife’s issue, its common almost for all. We can’t predict or rationalize customers mind and their buying behaviors.

In the realm of competitive world of Fast Moving Consumer Goods (FMCG), consumer behavior understanding is very much pivotal. It is often perceived that consumers mind is very much rational & logical. But fact is that, consumers mind is such a complex landscape where cognitive biases, emotions also plays very important roles on purchase decisions. But at the end of the day most of the marketers and strategist don’t come out from the logical aspects. Behavioral Economics which merges insights from Psychology and Economies, challenges the traditional assumption of consumer rationality on purchase decisions. Behavioral Economics has lighten up the multifaceted landscape. It has confronted the traditional economic models which assume perfectly rational decision making.

In this article, I will embark on a journey of consumer mind which will explore the logic, theories and real world examples that demonstrate the fascinating interplay between psychology and economics.

The Irrational Mind at a Glance:

As I earlier indicated, classical economics posits that consumers make decisions based on rational calculations, weighing costs & benefits to maximize utility. In contrast, Behavioral Economics recognizes that human decision-making is fraught with emotions, biases, & cognitive errors.

Daniel Kahneman, psychologist & economist, and one of the key figures in this field,  This Nobel prize winner Daniel Kahneman dedicated his life to researching how people think and ultimately make decisions.  According to his dual process theory of thinking, there are two distinct modes of thinking:  fast, automatic thinking (intuitive System-1), and slow, deliberate thinking (deliberate System-2). Here I will be describing some theories or models and real life examples with rational of irrational minds of consumers:

1.The Allure of Discounts:

One of the predominant aspect of the irrational consumer mind is the allure of discounts. Consumers often exhibit a strong preference for discounted products, even when the economic benefit may be marginal. Let’s consider the scenario of a consumer faced with two similar products—Product-A at the regular price and the other one product-B offering a modest discount. Studies have shown that consumers are more likely to choose the discounted option, driven by the psychological satisfaction of feeling like they've secured a deal.

Example: Buy One, Get One Free (BOGO) Promotions. FMCG brands frequently leverage BOGO promotions to tap into consumers' love for discounts. Even when the actual savings may not be significant, the perception of getting something for free triggers a positive response, and ultimately influencing purchasing decisions of consumers. Let’s take a scenario of discounts. Say, Lifebuoy 170 ml liquid handwash refill pack’s per price is 75 taka and Dettol 170 ml liquid handwash refill pack’s per price is also 75 taka. If there is any offer that buy 3 Dettol 170 ml liquid handwash refill pack and get it at 215 taka, instead of 225 taka. There are huge chances that consumers may pick Dettol.

2. Anchoring Bias in Pricing:

One of the pervasive cognitive biases affecting consumer choice is the anchoring bias. This anchoring bias is obvious when individuals place excessive reliance on the initial piece of information they encounter while making decisions. In the context of FMCG, pricing strategies provide an excellent illustration of anchoring bias.

Example: Let’s consider Colgate toothpaste brand that introduces a new premium variant Colgate Max-Fresh  which priced significantly higher than its existing Colgate toothpaste. Despite the original product's unchanged quality, consumers may perceive the existing options as more affordable in comparison, leading to increased sales of the standard variants due to the anchoring effect.

3. Loss Aversion & Brand Loyalty:

Many consumers continue to purchase premium brands even when discounted alternatives offer identical benefits, driven by the fear of losing the perceived quality and efficacy associated with the familiar brand.

Example: Let’s consider the classic scenario of a consumer standing in the aisle of a superstore Agora (Local superstore chain), faced with a choice between two similar brands of aerosol, one is ACI aerosl and HIT aerosol. ACI 800 ml aerosol, the usual choice, is priced slightly higher than the equally effective Brand HIT aerosol, which is on sale (ACI aerosol-620 taka, HIT aerosol- 590 taka). Despite the minimal price difference, the fear of losing the perceived benefits associated with Brand ACI often leads consumers to stick with the familiar, showcasing the powerful influence of loss aversion on brand loyalty.

4. Emotional Branding:

As a consumer I can think rationally but act most of the times emotionally. Brands that successfully tap into the emotional aspect of consumer decision-making often enjoy greater loyalty. Emotional connections can transcend rational considerations, making consumers more forgiving of price premiums. It’s more likely to choose a familiar brand over a less-known alternative.

Example: we all must be mindful about Coca-Cola's Share a Coke Campaign. The Iconic campaign Coca-Cola's "Share a Coke" campaign personalized their product by featuring it’s individual names on the packaging. This simple yet emotionally resonant strategy led consumers to feel a personal connection with the brand Coca-Cola. Influenced consumer’s choice despite the availability of other cola brands.

5. Packaging Psychology:

The irrational consumer mind is highly susceptible to the influence of product’s packaging. Bright & vibrant colors, appealing visuals, and strategic placement on the shelf can significantly impact on consumer’s product choice. Consumers may be drawn to aesthetically pleasing packaging, even if the actual product inside is comparable to alternatives.

Example: If you see packaging of Pringles and Kazi tea, you will find those very creative and premium. Some brands like- Coca-Cola, Mr.Noodles, Ispahani tea, those brands have very vibrant and attractive colored of packaging. Actually, premium Packaging and Perceived Quality. Premium packaging often creates a perception of higher quality. FMCG brands may invest in sophisticated packaging to elevate the perceived value of their products, encouraging consumers to choose them over competitors based on aesthetics rather than objective product attributes

6. Limited-Time Offers & Scarcity:

There is a term called “Fear Of Missing Out” (FOMO) which is a powerful driver of consumer behavior. What happens here? Limited-time offers & scarcity tactics capitalize on this irrational fear, compelling consumers to make impulsive purchasing decisions to avoid the perceived loss of a valuable opportunity.

Example: Seasonal & Limited-Edition Products. If you notice, you will find lot of such offers, like- year end sales of Aarong, winter offer of Transcom Electronics, Daily Shopping’s weekend offer, Bata’s back to school. FMCG brands often release seasonal or limited-edition products, creating a sense of urgency and exclusivity. Actually consumers, fearing they might miss out on a unique experience, are more likely to make unplanned purchases during these periods.

7. Social Proof & Influencer Marketing:

I noticed that consumers frequently make choices based on social influences, seeking validation from peers and influencers. Reality is that, the power of social proof in FMCG is evident in the rise of influencer marketing, where individuals make purchasing decisions based on the recommendations of influencers rather than rational assessments of product attributes in details.

Example: In the year 2022, Dove broadened its network of influencers, aiming to promote the brand's commitment to inclusivity and body confidence. The personal care company achieved recognition with a Shorty Award in the micro-influencer strategy category, acknowledging its success in various campaigns such as #PassTheCrown, #DetoxYourFeed, #ReusableIsBeautiful, and Baby Dove #OneRealPressure. Literally, influencers promoting FMCG products on social media platforms can significantly impact consumer behavior, as individuals trust the recommendations of people they perceive as relatable and trustworthy.

8. Default Choices & Convenience:

I found this default choices issue very interesting. The default option often plays a crucial role in FMCG decision-making, especially when it comes to convenience products. Consumers may stick to default choices simply because they require minimal effort or cognitive load in decision-making.

Real Example: one question for you. When was the last time you changed the newspaper at home?  Probably its long back! This symptom showcase the power of default choices. It is simplifying the consumer decision-making process.

I tried to show some logics and examples above regarding the irrational minds of consumers decision making. The FMCG sector provides a fertile ground for observing the quirks and intricacies of the irrational consumer mind. In fact, from brand loyalty driven by loss aversion to the impact of packaging, and allure of discounts, on emotional triggers, real-world examples within the FMCG industry illustrate that consumer decisions are often far from rational. I want to mention, recognizing and adapting to the nuances of the irrational consumer mind is not merely a marketing strategy; it's a fundamental understanding that empowers brands to connect with consumers on a deeper, and emotional level.

Most important thing is that influence consumer behavior in a landscape where the rational choice is just one factor among many. I would strongly tell that as the FMCG industry continues to evolve, embracing the irrationality of consumer choices becomes a key factor in driving successful marketing strategies.

A.K.M. Moinul Islam (Moin)

A Passionate Marketer and Corporate Leader

(Executive Director, PRAN-RFL Group)

Above article published on Bangladesh Brand Forum's magazine. link below-

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