Egonomics Assignment Example | Topics and Well Written Essays - 1000 words

Egonomics - Assignment Example The nature and pattern of human consumption has evolved significantly over the years with a significant move away from goods produced under mass production (initiated by the car maker Henry Ford) towards specialized production and finally customized production. It is not surprising that the focus of many companies today is no longer just the provision of an exceptional quality product or service but one which caters to niches and has the capability of being adapted as per individual requirements of the customer. In other words, personalization and the creation of unique customer experiences has become the new source of gaining competitive advantage in the midst of largely undifferentiated products and services. To set themselves apart from the crowd, consumers are increasingly flocking towards products that others do not have. This is because, as humans, our behavior is more often â€Å"irrational† than rational and that various purchases cannot be explained in the light of ae sthetics, utility of performance. In other words, the fact that most of engage in building and sustaining our self-esteem and self-confidence means that we often pay a price much higher than the actual worth of the product just for the sake of its exclusivity or limited availability. One such example is that of the recent launch of limited number of exclusive Apple iPhone 24 carat gold handsets that cost a fortune ($2853) to consumers (Trivedi).The pricing reflects the exclusivity of the product which, most consumers may find as a cushion to their self-image. Similarly, the LeBron James Limited Edition watch by Audemars Pigue is designed to cater to enthusiasts who would like to own this $51,500 watch (Adams) as a status symbol and to set them apart from the crowd. The high price reflects the (monetary) worth of the owner/consumer which is consistent with psychology that suggests that human beings are prone to engaging in impression management or casting favorable impressions of one self in the society. Furthermore, considering that humans have imperfect knowledge about themselves, they constantly strive for feedback from others (through praise of appreciation) to boost their perception of themselves. An example is of a customer who is praised by his friend for wearing a $51,500 watch and who receives increased attention from others by virtue of this valuable possession. This can be referred to as â€Å"personal branding† or differentiating yourself from other brands or individuals. In other cases, the same may be considered as a â€Å"requirement† as per social benchmarks (Benabou and Tirole). For instance, an individual attending high profile dinner of delegates may consider it as a disgrace to his self-worth to wear anything less than a custom-made designer outfit or designer shoes. Keeping these trends in view, it is no wonder that companies are looking towards the personalization of their service offerings as well. This is commonly known as o ne-on-one marketing or micro-targeting whereby promotional tools such as the e-mail, internet, direct mail, special events and others are used to target customers with specific psychographic profiles or lifestyles. For instance, HSBC posted banner ads on its websites that were highly personalized meaning that the bank offered special â€Å"offers† depending on the account balance of the customer and the content