Client Name

L'Oréal

Faculty Advisor

Mr. Syed Atif Murtaza Qaiser

SBS Thought Leadership Areas

Behavioural Studies

SBS Thought Leadership Area Justification

This ELP is covered in the IBA SBS Thought Leadership Area of Thought Behavioral Studies because this paper discusses the emotional and thinking components in consumer decision-making within the beauty industry. The study does not take the view that consumers are purely rational but acknowledges the presence of emotions, social and psychological motivators particularly during the buying of personal care goods. It examines the way consumers are pricing things, their trade-offs and emotional response towards inflation. Value perception was significantly influenced by techniques such as charm pricing (PKR 999 vs. PKR 1000), anchoring or discount framing. The price changes were small, and yet corresponding behavioral changes were very sharp, at times of high economic stress, consistent with the concept of loss aversion in behavioral economics. Qualitative results (focus groups) showed a moral tension when using money on beauty when the person is on financial difficulties. Terms such as guilt, indulgence and reward were emotionally based decisions and not utility based. This is in line with prospect theory assessments in that decision is made based on the aspired outcome as well as the emotional context of the outcome. There was also the paradox of choice where due to a saturated market, lower-income consumers were overwhelmed with too many options available to them. This proved to be confusing and stressful, and the communication of the brand should be clearer. These were also to examine substitution effects. Consumers resorted to low priced substitutes or less usage; rather than dropping the category completely under duress. Such an action represents bounded rationality in which individuals make satisfactory judgments due to constraints in emotions and information. To conclude, the study can be useful to behavioral science since it demonstrates the influence of emotion, perception and social economic factors in financial behavior. It provided information to the marketer, economist, and to policymakers interested in the prospect of making recommendations within the context of a more complex and real world environment.

Aligned SDGs

GOAL 8: Decent Work and Economic Growth

Aligned SDGs Justification

SDG 8 aims to promote inclusive and sustainable economic growth, full and productive employment, and decent work for all. The beauty industry in Pakistan is a significant employer, particularly in urban areas where salons, retail outlets, and logistics chains depend on stable consumer demand. Through this project, we examine how macroeconomic instability (such as inflation and declining GDP) affects consumer spending and, by extension, employment and industry growth. By equipping L’Oréal Pakistan with data-driven pricing strategies and economic forecasting models, this research ensures that the company can remain adaptive during downturns, helping to preserve jobs and stimulate sectoral resilience. The project's outcomes allow for continued growth, even in low-consumption periods, by understanding and meeting evolving consumer priorities.

NDA

No

Abstract

SDG 8 aims to promote inclusive and sustainable economic growth, full and productive employment, and decent work for all. The beauty industry in Pakistan is a significant employer, particularly in urban areas where salons, retail outlets, and logistics chains depend on stable consumer demand. Through this project, we examine how macroeconomic instability (such as inflation and declining GDP) affects consumer spending and, by extension, employment and industry growth. By equipping L’Oréal Pakistan with data-driven pricing strategies and economic forecasting models, this research ensures that the company can remain adaptive during downturns, helping to preserve jobs and stimulate sectoral resilience. The project's outcomes allow for continued growth, even in low-consumption periods, by understanding and meeting evolving consumer priorities.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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