Marketing and Psychological theories

Psychological theories and
Marketing

Kahneman’s Framing Experiment
Daniel Kahneman and his research partner Amos Tversky
The human brain relies on basic rules of thumb, cognitive biases.
One of these cognitive biases is the Framing effect.
The Framing effect means that people will give different responses to
the same problem depending on how it is framed or worded.

Key Experiment:
• In Group 1, participants were told that
• Treatment A, “200 people will be saved.”
• With Treatment B, there was “a one-third probability of
saving all 600 lives, and a two-thirds probability of saving no
one.”
• Most participants selected Treatment A.

• In Group 2, on the other hand, participants were told that
with Treatment A, “400 people will die.”
• And with Treatment B, there was “a one-third probability
that no one will die, and a two-thirds probability that 600
people will die
• Most participants opted for Treatment B.

Findings:
• When the treatments were presented in terms of lives saved (positive
framing), the participants opted for the secure program (A)
• When the treatments were presented in terms of expected deaths
(negative framing), they chose the gamble (B).
• Context is everything. How you frame the information you present on
your website or in your ads will change the way people react to it.

Zajonc’s Mere Exposure Study
• “Any publicity is good publicity.”
• The idea behind this oft-quoted statement is that having people talk
about you, regardless of what they’re saying, beats having no one talk
about you at all.
• And indeed, a number of psychological experiments have
demonstrated that simply exposing people to something – a name, a
person, a product, a song – increases their positive feelings toward it.

The first time people look at any given ad, they don’t even see it.
The second time, they don’t notice it.
The third time, they are aware that it is there.
The fourth time, they have a fleeting sense that they’ve seen it somewhere before.
The fifth time, they actually read the ad.
The sixth time they thumb their nose at it.
The seventh time, they start to get a little irritated with it.
The eighth time, they start to think, “Here’s that confounded ad again.”
The ninth time, they start to wonder if they’re missing out on something.
The tenth time, they ask their friends and neighbors if they’ve tried it.
The eleventh time, they wonder how the company is paying for all these ads.
The twelfth time, they start to think that it must be a good product.
The thirteenth time, they start to feel the product has value.
The fourteenth time, they start to remember wanting a product exactly like this for a long
time.
The fifteenth time, they start to yearn for it because they can’t afford to buy it.
The sixteenth time, they accept the fact that they will buy it sometime in the future.
The seventeenth time, they make a note to buy the product.
The eighteenth time, they curse their poverty for not allowing them to buy this terrific
product.
The nineteenth time, they count their money very carefully.
The twentieth time prospects see the ad, they buy what is offering.”

Regan’s Reciprocity Experiment
• Concept:
• The human nature and tendency to give back what is received
• Palaeontologist Richard Leaky
• Social psychologist Robert Cialdini
• Experiment:
• 1971, Professor Dennis Regan at Cornell University
• Power of reciprocity principle. Art appreciation experiment.
• Research assistant returning with soft drinks or empty handed impacts subjects
response to assistants offer in purchasing raffle tickets.
• Inference:
• Provide customers with a valuable experience and they will feel obligated to
return the favour by purchasing your products and ideas.
• Give more value creating content and you will receive more business from the
customer.
• Sense of reciprocity leads to Link-building and Relationship-building with
customers.

Asch’s Conformity experiment
• Concept:
• Human nature and tendency to ‘fit in’ and do what others do, driven by the thought
of what others think about you.
• Tendency of conformity seeking approval or acceptance.
• Experiment:
• 1951, Solomon Asch
• Group pressure and peer opinions override obvious facts.
• Participants were shown a card with a line and then another card with three lines on
it to identify which of the three lines was identical in length to the first line shown.
• Though the answer was obvious based on the length that their senses identified, yet
they chose to go with the choice made by the rest of the crowd.
• Inference:
• Social influence has more impact than obvious truths.
• Bandwagon effect.
• Attach social proof (followers, testimonials, fans, bloggers) to your business and
attract customers to capture more business opportunity.

"Tappers & Listeners"
Chip Heath Dan Heath

Contd…
• Out of the 120 times the tune was tapped, the listeners could
guess the tune correctly only thrice.
•That was the success rate of about 2.5%
• Listeners could gess the tune only 1 in 40 attempts.

One more thing. Tapping harder or Tapping repeatedly
won't make it any easier for the Listener!

DECOY EFFECT
• Consumers tend to change their preference between two options
when a third, less attractive option is presented.

Professor Dan Ariely tested this model with students at
MIT, asking them to choose a subscription option among
the three choices listed by the Economist. The results:

Professor Dan Ariely tested this model with students at MIT, asking them to choose a
subscription option among the three choices listed by the Economist. The results:

When the print subscription was removed, the
results looked like this:
That’s a 30 percent difference in sales for the Economist by using
a decoy price of a print subscription.

“asymmetrically dominated” (a plan that
seems out of whack or a feature list that doesn’t
quite add up)

Freedman and Fraser’s
Compliance Experiment
California (1966)

foot-in-the-door technique
One of the first studies to
demonstrate the foot-in-the-door
technique was conducted in 1966
by Jonathan L. Freedman and
Scott C. Fraser.

A common explanation for this phenomenon has
to do with Cognitive Dissonance.

COGNITIVE DISSONANCE
we hold many cognitions
about the world and
ourselves; when they clash,
a discrepancy is evoked,
resulting in a state of
tension known as cognitive
dissonance

experiment
On California house wives through
telephones.

What is the Pygmalion effect?
• The phenomenon in which the grater expectation placed upon people ( students/
employees/children) the better they perform.
• Who is Pygmalion..?
• A cypriot sculptor in a story by ovid in greek mythology, who fell in love with a
female statue he had carved out of ivory

The famous (oak) school experiment
• Teachers were lead to believe that certain students selected at random were
likely to be showing signs of a spurt in intellectual growth and development.
• At the end of the year teachers of whom the teachers had high expectations
showed SIGNIFICANTLY GREATER gains in intellectual growth than did those in
the control group
• Also known as : Expectancy advantage

Marketing and Psychological theories

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Marketing and Psychological theories

Similar to Marketing and Psychological theories (20)

Recently uploaded

Recently uploaded (20)

Marketing and Psychological theories