BEHAVIOURAL ECONOMICS IN MODERN MARKETING: UNDERSTANDING THE CONSUMER MINDSET

Abstract

This paper analyses the increasing importance of behavioural economics in the realm of present-day marketing with a stress on the consumer mindset of the Gulf Cooperation Council (GCC) market. The study uses both primary and secondary data to analyse key concepts in behavioural economics. The data was collected using surveys, interviews and focus groups of GCC consumers as well as published reports and secondary databases. Concepts analysed include cognitive errors, heuristics, the impact of loss aversion, social proof, and more.  Aspects such as price sensitivity, digital adoption, and spend on luxury indicate certain trends among GCC consumers. This highlights how marketers can use behavioural economics to tailor promotional strategies. The study illustrates how biases affect consumer decisions. We make recommendations to marketers to effectively communicate with GCC consumers. This research also points out areas that are lacking and suggests future research opportunities.