Importance of Psychology in Business

Business is about creating wealth through organised delivery activity where employees delight consumers. There are 2 psychological resource markets that a business struggles with through out life.

1. Consumer & channel customers market

2. HR / Vendors market

Rest all resources are commodities and are available for money.

PART 1 - Consumer & channel customers.

Business happens when consumer needs are met. A particular product is consumed by the customer based on a perception. Perception is built on various factors - tangible and intangible. Here come consumer psychology. It has quite stabilised as a subject in the last 100 years. There are aspects of pre-purchase consonance and post-purchase dissonance.

There are consumer types. There are personality types in consumers. Each are to be handled specifically for good business to happen.

Businesses should ideally flourish not by our own efforts but by consumer advocacy. Here again we propagate on psychological derivatives. See the digital businesses.

PART 2 - Employee psychology

Business as an institution succeeds only when the above consumer psychology is handled well by employees. They are the face of the organisation. They should feel that money is not everything and I should work for a particular institution. Then there is a market differential created in Human Capital. That is the single largest sustenance factor for a business.

So there is applied psychology throughout!