Authors: Deborah Cohen
Which would you choose?
Compared to when the boxes were labeled with the Salem font, three times as many people chose a box of chocolates with the Signet font, with no difference based upon the name. Signet appeared to be an appropriate font to link with a high-class chocolate candy, whereas Salem was not—showing that it’s all about the wrapping.
It isn’t just the design or superficial characteristics of a product that influence us; the context in which the product is presented can also
convert us from lookers to buyers. In 2002 Daniel Kahneman won a Nobel Prize for his work establishing that decision-making is biased by contextual information. We can predict the decision most people will make based on how the information is framed, such as whether outcomes are presented as gains or losses.
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People are more prone to avoid losses than to seek gains, so an advertisement that promotes a product as preventing a health problem is likely to be more effective than one that presents the product as improving health. It could be the same product with the same purpose, but people perceive them differently.
The main barrier we face in resisting marketing efforts is our consistent lack of insight into how much we can be influenced, as well as our inability to recognize when and in which ways we are being influenced. We cannot defend ourselves if we don’t know that marketing strategies are leading us to choose something that will harm us.
Obviously, businesses need to market their products. Most people will agree that advertising that uses explicit arguments and provides information and reasons to buy a product is perfectly legitimate and should be encouraged. But marketing that exploits the architecture of our brains and thus leads us to consume foods that can make us sick is very dangerous. For example, displaying candies, chips, and soda at the cash register increases our odds of buying them (and then consuming them), because our ability to resist them is likely to be low at the moment we are forced to encounter them. Much of today’s strategic marketing pushes us to make poor choices by confronting us when we are unprepared to make a thoughtful choice.
Advertisers’ jobs are to convince consumers why we cannot live without their products, and they invest heavily to do so. Historically, marketers have always tried to analyze shoppers’ choices in order to devise the most promising means of promoting their products. Back in the 1950s a behavioral scientist named Mason Haire realized that consumers lack insight into their own preferences. At the time, Nestlé developed Nescafé instant coffee, but consumers said they didn’t like the taste. Yet in blind taste tests, consumers could not distinguish Nescafé from home-brewed Maxwell House.
Obviously, taste was not the issue. Haire came up with a method known as a “projective technique” to assess consumer motives indirectly.
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To understand more about consumers’ negative responses to instant coffee, Haire created two of the same shopping lists, but one included Nescafé while the other had Maxwell House. He asked a hundred women to characterize the personality of the shoppers who used these lists.
The Maxwell House shopper was described as a good housewife, while the Nescafé instant coffee shopper was described as lazy, sloppy, and inefficient. These attitudes had not previously been apparent, and not only explained the negative reaction but also subsequently informed the company as to how it could position the product to increase its acceptability. Here, advertisers learned that they had to conquer stereotypes that people could not articulate.
In contrast, today, by using technology like eye tracking and insights on decision-making processes from the fields of behavioral economics, psychology, and neurophysiology, advertising efforts have shifted from persuasion to manipulation. We can be swayed without ever realizing what has happened. When it comes to food, many experiments have demonstrated how irrational, inconsistent, and oblivious to marketing ruses people can be.
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Although the impact of improving advertising effectiveness for processed foods and beverages may influence sales by only a few percentage points, small increases can translate into huge profits for large companies—and increases in extra calories that expand our waistlines. As companies adopt more effective marketing strategies, our risk for obesity increases.
Making Decisions
Although traditional economic philosophy assumes that people will make decisions that will help them achieve the greatest level of well-being and happiness, not only do people routinely make bad decisions, but the choices they make are often inconsistent with what they really want. And what people “really” want seems to change with how the choices are presented. As Nobelist Daniel Kahneman demonstrated, order and framing influence what we select. The following experiments provide some examples showing how easily people can change with simple alterations in one or two elements of a choice scenario.
Professors Klaus Wertenbroch and Ravi Dhar recruited 114 students to participate in a study on preferences for sweets.
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In a pretest they found that students valued M&M’s candy because of the pleasure it brings and glue sticks for their usefulness. Because economists generally think price is a good indicator of value, the professors asked the students what they would be willing to pay for the glue stick and M&M’s. The average of the answers was $1.27 for the glue stick but only 83 cents for the M&M’s. Nevertheless, in the experiment Wertenbroch and Dhar labeled the M&M’s and the glue stick with the same price, $1.25, and then asked each student to choose one. Half the students chose the M&M’s, which makes sense if the items were perceived as being of equal value. If they had ignored the price tag and chosen what they thought was the real value, we would have expected more to choose the glue stick.
But in the next version of the experiment, instead of asking the students to select either the glue stick or the M&M’s, they gave the students both, and then they asked the students to give one back. Now 85 percent chose to keep the M&M’s! The lesson—once we touch, hold, or own something that gives us pleasure, we are less likely to give it up. (Economists also call this the endowment effect.)
Another experiment demonstrated our attraction to instant gratification, especially when the present situation is contrasted with future events. Ninety women were asked to choose a snack to eat right away, either yogurt or a chocolate chip cookie.
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In the first setup, with the simple choice, 57 percent chose the chocolate chip cookie. The next group’s setup was slightly different. These participants had to make the same choice, but they were also told that they would be coming back in a week to repeat the same experiment with the same choice. After the entire procedure was explained, 83 percent chose the cookie. A third group was also given the same choice but told that when they came back the next week they would only be offered the yogurt. This time, 90 percent chose the chocolate chip cookie. In contrast, when a fourth group was told that they would be offered only the cookie when they came back, the percentage of those who chose the cookie to eat right away dropped substantially—to 43 percent.
Not everyone changes his mind when the context for decisions change. In this case it appears that the yogurt choosers were easier to influence. Thinking about yogurt in the future led to more cookies today (and vice versa). Many people are more likely to choose a smaller immediate reward (like tempting food) rather than forgo it for a more valuable or larger reward in the future (like weight loss). This may also be one of the reasons why it is so hard for us to stay on diets, eating more today and telling ourselves we will make better choices in the future. Marketers exploit this bias all the time.
Not only are marketers clever about getting consumers to purchase products by offering special incentives, but they can manipulate people such that they might change their purchasing patterns or even make choices that are the opposite of previously stated preferences. Several elements, like price, appearance, taste, and quantity figure, strongly in people’s choices. When one of these elements varies, the change may be powerful enough to cancel out the influence of any one of the others.
Loyalty programs are extremely successful in influencing repeated business with a particular company. One study showed that the impact of being offered a free coffee after ten are purchased was that people bought coffee more often and sooner than they would have without the incentive. As people got closer to reaching the ten purchases, they accelerated their buying and purchased more coffee in a shorter period of time. This phenomenon has been dubbed the “goal-gradient” hypothesis. It was first noted in a study showing that rats seemed to work harder as they got closer to obtaining an anticipated reward.
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Another marketing technique exploits the assumption that something that costs more is better and will be more enjoyable. In one experiment people were asked to choose between a chocolate heart and a chocolate shaped like a cockroach, which they could have for free. Although beforehand, the majority said they would enjoy eating the heart-shaped chocolate more, most participants chose the chocolate cockroach after seeing it labeled with a $2 price tag while the chocolate heart was valued at 50 cents.
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Similarly, in another experiment, Professor Christopher Hsee of the University of Chicago’s Booth School of Business did a pretest
and found that most students did not think pistachio ice cream was better than vanilla. He then recruited ninety-six students to investigate whether using a token—which has no inherent value but can be traded for something of value—could be used to influence people’s choices. The first group of students could choose to work either six minutes to earn a gallon of vanilla ice cream or seven minutes to earn a gallon of pistachio. Only 25 percent of students went for the pistachio. In contrast, when the tasks were valued at sixty points (for six minutes) or a hundred points (seven minutes) and the second group of students could redeem sixty points for a gallon of vanilla and a hundred points for pistachio, more than 50 percent went for the pistachio.
In this case, the abstract incentive of points and the higher valuation of pistachio appeared to change many consumers’ preferences. How often do people recognize when their behaviors are merely a response to similar marketing ploys?
When you think about it, we have probably all been convinced that some products are more valuable than they are, and we have probably all bought and consumed something based upon a name, a wrapper, or a special price or discount. There are no constraints on the techniques that advertisers can use, as long as promotions are not patently fraudulent or overtly deceptive.
Atmospherics
The concept of atmospherics, which are the contextual factors associated with the retail environment, was first introduced in the early 1970s by Philip Kotler, a strategic marketing guru who is now a Distinguished Professor of International Marketing at Northwestern University. Kotler noticed that retail environments could produce emotional effects that enhance the probability that a customer will buy. Factors like lighting, crowding, layout, scent, and music all influence buying decisions. Although all these factors are either in plain sight or can be noticed by consumers, typically most people are unaware of the way atmospherics influence their choices.
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It might surprise you to learn that music can affect our consumption of beverages. In a study conducted by Western Kentucky University’s
Dr. Ronald Milliman, researchers compared the effects of slow and fast music on the behavior of restaurant customers. They found that people lingered at restaurants longer when slow background music was piped in. Patrons spent about the same amount of money on food as those listening to fast music but ordered more drinks from the bar, spending 41 percent more on alcohol.
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Customers in wine shops have been shown to be influenced by music as well; in one study, patrons were more likely to buy French wines when French music played and more likely to purchase German wines when German music was played. In another study, patrons spent more money on wine when classical music was played.
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In an experiment by Professor Adrian North, previously of Heriot-Watt University in Edinburgh, restaurant customers treated to a soundtrack of classical music racked up bigger bills than customers listening to popular music. The classical music listeners were also more likely to order appetizers, coffee, and dessert.
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If asked, I’m sure none of these customers would say that music had anything to do with whether they ordered a cappuccino or tiramisu. But atmospherics certainly affected their food consumption.
Priming
Think of a typical family sitcom—teenagers want to borrow the family car, but they just don’t come right out and ask their parents for it. First, they are unusually helpful and courteous, giving the parents a lot of compliments and saying a lot of nice things. They want their folks to be in a good mood, because if they aren’t, the parents will definitely say no when the kids pop the question.
The teens are using the principles of priming. Priming refers to an incidental activation of memories or associations that make a person more disposed to act in a particular way. A priming stimulus at one time will influence how people respond to a related stimulus at a subsequent time, typically soon after the initial priming stimulus. Presumably, if the parents are cheered and in a positive mood from the good behavior of their teenagers, they will be more likely to say yes when asked for permission to borrow the car.