During the second portion of this semester, we have talked a great deal about cognitive biases. In a very simplistic way, cognitive biases are just errors in the way we think and in the decisions we make. A great deal of these errors are brought upon by our use of mental shortcuts, also known as heuristics. Much of what we know about heuristics comes from the work of Kahneman and Tversky. They have introduced concepts like availability heuristics, which states we tend to judge the probability of an event based on how easy we are able to recall past examples of that event. The work that Kahneman and Tversky have done has completely changed how we view consumer behavior. The way cognitive psychology, more specifically cognitive biases, has influenced the way we think about marketing is precisely what this article talks about.
In this article, Jayson DeMers aims to talks about a variety of cognitive biases and how companies can use each one of these biases to gain more money from consumers. He starts off by discussing how human beings are geared toward loss aversion. We are more prone to focus on a possible loss than on a possible gain of the same amount. Marketers know this and will, therefore, create advertisements that emphasize the avoidance of a loss. Marketers also use this knowledge when they tend to be very precise and careful with how they word the possibility of a loss.
This voucher example shows how marketers will purposely emphasize the fact that you are saving $5 rather than gaining $5. Vouchers like this work because they reiterate that you will lose $5 if you do not use the coupon by the expiration date.
DeMers then moved on to talk about one of my least favorite cognitive bias, anchoring. Anytime we have made a decision by selecting a starting point and adjusted our estimates from there it is likely we have fallen prey to anchoring. One of the reasons I hate this bias is because of the number of times I have let it get the best of me. Just last semester I was scrolling through the BestBuy website looking at flash drives with absolutely no intentions of buying anything. The website was set up so that the more expensive flash drives were shown first and so when I got to the bottom of the list they were much cheaper and seemed like a much more reasonable purchase.
To make matters even worse, when I clicked on one of the decent looking flash drives it showed the “was $59.99” right next to the $20 price tag and I began thinking about how much money I’d be saving if I bought it (which I foolishly did). DeMers discusses how marketers will purposely expose us to overpriced products and services so that we will be more willing to purchase the cheaper product that they were actually hoping to sell.
Although Jayson DeMers also talked about some of the other cognitive biases we have discussed in class, like framing and priming, he did not do a very good job of relating them back to the main topic. DeMers did a great job of explaining what cognitive biases were and what each of them meant but he hardly discussed how these biases have/will influence marketing. When he did discuss their influence, it was often with a sentence or two without much context. His lack of real-world examples made it extremely hard to think about the concepts past their surface level definitions. All of the real world examples in this blog post were things that I thought of and found pictures for. While this did cause me to think about cognitive biases on a much more personal and practical level, it also showed that DeMers really did not do a great job of conveying the real world applications of cognitive biases in marketing. Which is honestly a shame because this topic highly interests me and I would have loved to read more in depth about it. Crazy enough, reading this article and writing this blog post has made me realize how great, challenging and interesting a career in marketing would be.