How Consumer Behavioural Economics is helping to promote “Lose Weight” Products and Programs

One of my childhood friends, who have always been obese, had his awakening call 2 years back. He started with a simple diet plan, then started going to programs promising to reduce 4-6 inches in 1 week, later started taking tabs, tonics, powders, and other supplements to reduce weight. His Moto was rather simple he actually wanted to reduce weight with very little or no physical exercise.

Though he understood the fact that Exercise is the best and cheaper way to reduce weight his argument was “When a product is available in the market to reduce weight without exercise why not take it?” It strike me… we buy many things in life just as a supplement to reduce our human effort; any machine is made - invented is to reduce human effort as bottom line. In that context why not buy a product which would reduce your weight without sweating a drop.

Now the question is whether there is a product truly made (Applicable to Everyone) to reduce weight without involving the traditional method that is Exercise?  The Answer is as much as I know and have seen there is none. If my statement is true then how come this industry survives…? When it cannot do what it supposed to do for a major chunk of their customer base if not all. In a recent article in New York Times I read Weight Lose market has a $ 3 Billion whooping US dollars market turnover in US alone… Imagine other countries in Asia where Obesity population levels are growing every day.

In order to understand better I had an honest discussion with my friend about his failures attending various programs to lose weight. Initially he commented saying all the programs he attended either did not suit him or did not worked as expected… so I asked why continue doing the same error, Initially he did not have answer later on I realised it was his guilt of quitting made all the difference, Someone trying to quit smoking is no different than my friend who is afraid to quit going to people promising to reduce his weight.

Corporates in weight lose industry, who produce and sell Powders, Tablets, Diet Plans, Books etc… know for a matter of fact that there consumer market will never reduce and it will only multiply though they produce no results. They confidently open shops investing only on marketing. Where they market not their products, but creating a Maya that FAT PEOPLE ARE UGLY.

Mostly the trend I see in the corporations is this, they struggle so much only to make a prospective customer to a customer, they do very little to retain them, as chances of a customer quitting using their product is very high (which they are completely aware off), or the payment plan is in such way that mostly they make their profit in the first transaction itself. They see only two kinds of customers, first one is the kind who know it’s not working but the guilt of quitting makes them stay and pay.  Second One is the one who boldly calls a quit but eventually lands up in another program and ends up paying….It’s a cycle.

Corporates follow simple game theory as there marketing strategy, once a person enters there office only 2 options are given to him/her and they are forced to choose one. Either choose a program and get stuck there or call it quit and join another program. As you see both the options are designed by the corporates and you have left with no choice either u spend and stay with this corporates and be happy in heart thinking you are at least trying or live with the feeling you are FAT and UGLY.

Free Trade is Expensive…

Free trade is an economic system where all the taxes, tariffs, quotas and regulations on the import and export of goods & services are removed. A country following free trade policy will allow exporters to trade as in domestic trading.


It’s a common theory that free trade benefits everyone involved as it brings producers (service/product) for a healthy competition. Providers can win only when making better and cheaper products. The conclusion of this competition will give an edge to a country that has advantages in making them cheap and better than other countries. This way both countries can save money, receive better products and focus their resources on their own comparative advantages.

Though the concept sounds very interesting and promising for upbringing financially backward countries, this system has got some serious unanswered questions within it, which I have put forth here.

1. What happens when a country has got NO comparative advantage or the financial strength to compete with a developed nation’s product/service?

a. Discussing this question we will come to understand that Free trade will lead to monopoly of services and products.

b. Free trade will also enable best of quality & price initially but towards the future when a product gets saturated there won’t be any room for improvement for a competitive product to evolve for replacement.



2. What kind of contribution can Free Trade give in abolishing corruption and improving the lifestyle of working class?

a. Improving lifestyle is directly proportionate to annual income of households. Free trade will open up luxury items usually accessible only to rich, to middle and the poor class (this is achieved because of economies of scale). But there is a big question whether goods like medicine will be available at a cheaper cost as economists foresee monopoly.

b. Free trade will create an industry revolution through which wages will get hiked, commodity prices will reduce which will directly increase the wealth (whose wealth of course “Rich will get Richer” and poor wont realize what kind of trouble they are going to get in for a while).

c. Free trade will openly give way to more corruption as far as I have understood, as bigger organizations will be forced to produce commodities at a cheaper price they have to eradicate smaller players by buying them out or imposing troubles through government which will anyway give way to corruption on a bigger level.



3. Though European Union and United States talk about Free Trade is it really happening in reality?

a. In reality, there is no true free trade regime that exists or has ever existed. The closest that has ever been achieved to a free labor market is inside the European Union, where citizens of the member-states are permitted to move and seek work within the Union's borders at will.

b. All states within EU even those trading within the terms of "free trade treaty," continue to employ some trade restrictions or impositions on imported products. There are a variety of items that are barred from export, such as IP or patented technologies.

c. As a matter of fact free trade is an issue of relative degree rather than absolute qualification.

4. Can Free Trade be applied as explained in theory?

a. Free Trade policy critics have pointed out that free trade economics, in all countries advocating free trade regimes, have trade barriers in place to protect their industries. In fact, nearly all examples of successful industrialization and economic development employ a mixture of focusing on comparative advantages while using trade protections.



Economist and Political Philosopher Alexander Hamilton was a protectionist, seeking to nurture the early industrial potential of the Northeast and Mid-Atlantic from British competition.

Economic philosopher Adam Smith suggested that the countries planning to adapt free Trade policy should focus on their comparative advantage in agriculture which is the best way to avoid disaster from Free Trade.

Ref: https://mises.org/etexts/freetrade.pdf

Does Price always follow demand & supply?

Does Price always follow demand & supply?


When demand of product X increases and supply stays the same – price increases.

When demand of X continues to increase and supply stays the same constantly – price increases to a level where consumers cannot afford to buy the product X.

This is where innovation comes into play. “Necessity is mother of all inventions”

This invention can be an alternative product or just supplements of product X (for discussion purpose we will call alternative product as Y), in both the cases the main motto of this invention is to satisfy the demand and companies see this as an opportunity window to gain profit by selling Y at a cheaper price.

In this situation, both the consumer and producer of product X has to suffer, because the consumer has to forgo the product X due to his monetary inability to buy and the producer of X because he is unable to fully utilize the profitability scale of his product.

Saturation and duplicity are coming too fast for successful products like X because of open market. At times, producers are not able to attain Profit Expected or attain Break Even because of severe global competition.

This situation scares the small scale companies to innovate new products, as there would be lot of replicas produced on a large scale (alternatives) by companies earning profits through economy of scale. It gives only two options for small scale companies i.e. either to scrap their production for avoiding losses incurred by heavy competition or to agree for royalty with bigger organizations and sell their copyrights.

According to me, the only solution to this problem for these organizations to survive is by addressing the low income consumer market and to produce innovative products which would better their lifestyle. By doing this, not only is there an increase in consumer base which would reduce the time scale of the opportunity window created, but also increase in the time to realize break-even and gain profits at the same time.

By addressing low income consumers, producers would price their products low, which would eliminate competition to a certain level. The drawback however would be building brand awareness and to eliminate fakes. But ultimately even for smaller organizations (who cannot achieve economies of scale), if they want to sustain in the market, they have to adapt to CK Prahalad’s Bottom of the Pyramid.

Bottom of the Pyramid concept not only helps the organizations which can earn profits through economy of scale but even the small scale companies. They can adapt this concept, sustain in the market and bring a change to the lower middle class and middle class people.