Dear Md Mostafizur Rahman

Businesses can use behavioral economics to enhance customer loyalty and retention by leveraging principles such as loss aversion, social proof, and the endowment effect. By creating loyalty programs that offer immediate rewards and exclusive benefits, companies can tap into customers' fear of missing out (loss aversion) and make them feel special (endowment effect). Social proof, such as displaying testimonials and reviews, can reassure customers about the value of staying loyal. Additionally, framing communications to highlight potential losses from leaving rather than just gains from staying can make customers more inclined to remain with the brand. These strategies could create a more emotionally engaging and psychologically compelling customer experience, encouraging long-term loyalty.

I hope this helps.

A key issue in behavioral economics is to first examine what role emotions play in terms of decision-making by both consumers operating in markets for fast-moving, popular, basic products and services and investors operating in financial markets, including capital markets. Consumers are motivated to make purchases through marketing communications, advertising campaigns and promotional campaigns organized by retailers, outlets and shopping centers and/or manufacturers of product and/or service offerings with their own channels for selling manufactured goods. On the other hand, in the segment of investors operating in financial markets, including investors entering into transactions for the purchase and/or sale of specific assets, such as securities on stock markets, it is emotion that is an important factor in decision-making in the environment of small investors holding small stakes in stocks, bonds and/or other securities, who observe each other and, for lack of time and knowledge, do not conduct full, multi-faceted fundamental analyses, including economic-financial, indicator analyses of companies of securities issuers. On the other hand, they usually make limited use of technical analysis, rely on ready-made reports and expert opinions published by brokerage firms, investment banks, investment funds, rating agencies, trust published data without being fully aware of the asymmetry of information, in which they participate and often make investment decisions under the influence of emotion, generate herd effect, offensive momentum, fashionable trends and, consequently, also play a key role in the occurrence in these markets of situations of extreme overvaluation of listed assets and their periodic undervaluation. When valuations are high and there is media coverage of this they continue to buy instead of selling, and when the market crashes, seemingly abruptly the stock market crash of a bull market turns into a bear market, the euphoria of buying turns into panic selling. Both in the buying phase during the upward wave of the stock market trend and during the downward wave of the trend, emotions play a key role, emotions of satisfaction with the increasing valuation of the assets held or fear of financial losses. Fear of losses tends to be the stronger emotion and works more painfully which often leads to irrational investment decisions based on the fact that when securities or other assets are priced low, are undervalued then inexperienced small investors who do not conduct fundamental analysis instead of buying they sell accepting losses. On the other hand, consumers in the markets for basic products, fast-moving products, necessities, etc. also often act under the influence of emotions by paying attention to advertisements and promotional campaigns organized by stores and shopping centers. However, consumers of such products, trying to behave rationally, usually buy products that are cheap or are portrayed in advertising campaigns as cheap, which have been periodically reduced in price, which can be bought more under promotional offers of occasionally reduced prices, etc. However, even in this situation, asymmetry of information plays an important role, since most consumers do not have full knowledge of the economic valuation of the products they buy, the cost of production, the quality of the products and/or services offered in promotional offers, they do not have the opportunity to check whether the description of the composition of the raw materials from which the product was made, the description of the technology that was used during production, the statement that the product is ecological and healthy for consumption is consistent with the facts. Despite the fact that consumers do not have the opportunity to carry out analyses on this issue on their own in order to obtain reliable and complete knowledge of how and from what a specific product was made, what was the level of greenhouse gas emissions emitted into the atmosphere and environmental pollution during the production process, whether the manufacturer actually uses energy from renewable and emission-free energy sources in the production process, whether it actually uses raw materials that are harmless to human health, whether it really pursues sustainable development goals as it declares in advertising campaigns, public relations presentations, whether it really pursues the mission of a sustainable, green company, whether it really is a business entity applying the principles of business ethics, corporate social responsibility, pro-climate and pro-environmental responsibility, whether it really realizes what it publishes in the framework of extended, non-financial ESG reporting, etc. Most consumers don't have the ability to check this, don't have the ability to answer these questions fully objectively, don't have the knowledge and/or time to conduct research and analysis on their own to verify the aforementioned issues. On the other hand, most consumers trust messages, messages, theses, content, slogans coming from advertisements, which are designed and implemented as part of advertising campaigns to act on emotions. Thus, consumers pay attention to whether advertising slogans rhyme, whether a play on words is used in their construction, whether their favorite music is used in the course of their broadcast in the advertising film, whether a situational scene evoking certain pleasant associations is used, which is supposed to substitute for providing consumers with full, reliable, factual information about the production technology used, data characterizing the raw material composition of the manufactured product, and so on. In this way, more or less consciously, consumers allow themselves to be drawn into a kind of game of influencing and exploiting the irrationality of emotions evoked by advertising spots and videos in the minds of consumers. Marketers do this by deliberately designing and executing advertising campaigns to influence the emotions of potential consumers in this way. Advertising campaigns carried out in this way contribute to consumers making excessive purchases, making unnecessary purchases under the influence of emotions, which then results in an increased scale of throwing recently purchased products into the trash, results in overproduction, overuse of raw materials, resources, energy, increases greenhouse gas emissions and the scale of environmental pollution. On the other hand, in terms of maintaining the loyalty of consumers as well as stock market investors, an important role is played by the level of reliability in terms of data information provided by producers of product and/or service offerings or issuers of securities during advertising campaigns, public relations presentations, media conferences, reports published on the Internet, including popular online social media. In maintaining the loyalty of recipients of offers, a key role is also played by the level of compliance given through various channels of marketing communication of the company's mission, its production activities and possibly also its pro-social, pro-environmental, pro-climate, charitable activities, support of important social campaigns, application of principles of good management, ethical treatment of employees, application of principles of business ethics, implementation of sustainable development goals, etc. On the other hand, from the marketing point of view, the key role is for marketing companies to maintain, thanks to their advertising campaigns, full correspondence between the content of advertisements, quality and price, etc. of products and services offered, high reputation of the company, high and positive recognition of the company's brand and logo, knowledge of the company's mission that is fully acceptable to consumers, a unique business philosophy that distinguishes it from the competition of other business entities, etc. Full compliance and reliability in this regard ensures the loyalty of customers of certain offerings.

I invite you to join me in scientific cooperation on this issue,

Kind regards

Dariusz Prokopowicz

The above text is entirely my own work written by me on the basis of my research.

In writing this text I did not use other sources or automatic text generation systems.

Copyright by Dariusz Prokopowicz