“I will never waste money on a designer handbag. I don’t need to pay for logos,” she said while sipping the Spring Godzilla Laté from Starbucks.
Are you living by the same logic? We have work to do. Keep reading.
This article is inspired by The Choice Factory. A book written by Richard Shotton about cognitive biases in marketing and everyday life. Read another article from this series.
Imagine…
Exciting news! You and your new group of work friends are going camping! The only catch is that you’ve never been. You need a bag. And some good shoes. For starters. What now?
You wait till everybody’s out and jump on your favorite fashion e-shop. You insert a “backpack” into the search bar. Few eye-pleasing options appear. But you don’t know. Something tells you that faux leather is not the best material.
After another 20 minutes you find a backpack large enough to fit all your stuff in. And it has many pockets. That has to be it. But you hesitate. This bastard costs £60. That’s a lot for a large purse!
Next day you can’t hold it in anymore. “I’m thinking about buying a new backpack. The old is… trash already,” you mention it in front of Jane. “Oh, that’s wonderful. I bought an Orsay last year and I’m super happy with it.” “Or…or. yeah. Sure. I’ll take a look,” you say like you know what she is talking about.
Later you sneak back to your computer and search for the Orsay thing Jane mentioned. And you scream. First bag you see is for freaking £200! “There’s no way in hell I would spend this horrendous amount of money!“ you shout. “Okay, calm down, and keep looking.”
After another hour you look satisfied. Those bags are really nifty. The back support. The adhesive layer. And so light. You've picked your winner. You found a 50l bagpack in a sale for £95. How do you feel?
Like you’ve been robbed.
Like you hate camping.
Like you made the best deal in your life.
Not sure about the answer? Let me help you.
Your cup of tea is always in the middle
Richard Shotton asked thousands of customers to guess the value of various products. During one test he showed customers a package of PG Tips tea with 80 bags for £2.29 and a Tesco tea package also with 80 bags for £1. Around 31% of customers considered the PG Tips tea price as good.
During another test Shotton compared the PG Tips tea to the Twinings tea for £3.49. This time whole 65% of customers considered the PG Tips price to be very nice indeed.
Same tea but different results. The only thing that changed was the context.
We don’t know the true value of stuff. We always compare them to something else. And usually end up picking the middle option.
Let’s get back to the backpack situation from our story. The first day you felt that a backpack for £60 was way too expensive. That was because you compared it to regular purses. The other day you thought that a backpack for £100 was a bargain. Because you were at a sports eshop surrounded by stuff for £80–£300.
We don’t usually want the cheapest option because we assume the quality would be bad. But we also don’t hunger for the most expensive one. We always settle for something in the middle.
Visual illusions are also often based on power of context. And we can cure then the same way as cognitive illusions. By seeking data instead of reyling on gut feeling.
Hey people,
let me show you how to protect yourself from the power of context?
You don’t want to be influenced by an ever changing context while shopping? Let me help you.
Set your budget in advance and don't back down from it.
Write the amount on a piece of paper and put it next to the screen.
Don't shop when you're hungry, thirsty, drunk or tired. You're not strong-willed enough at those times.
Hey marketers,
let me show you how to use context to your advantage?
Every new product has a given competition. We compare new beers to other beers. New soft drink to other soft drinks. But it does not have to be this way. You can change the perceived category of your product or your packaging to look like the best option. You can cheat.
King Cobra lager costs around £6.3. That’s way too expensive compared to the price we are happy to pay for a beer. (A 500ml bottle of Budweiser Dark Premium costs around £2.) That’s why King Cobra is sold in 750ml packaging looking like wine bottles. This way King Cobra can be viewed as “cheaper than wine” option and not as “waaay too expensive beer”. Wine exterior also brings King Cobra the appearance of quality.
Yes. That’s because nobody notices that while CocaCola uses 330ml cans, the original Red Bull is sold in 250ml cans. So in reality the price difference is much bigger.
Nespresso coffee capsules sound reasonable if we compare their costs with prices for a cup of coffee from Costa Café or Starbucks. One capsule per £0.65 is nothing compared to a coffee for £3,5.
However, if we compare Nespresso with regular 250g packaging of Tchibo or Illy Café, its price would appear astronomical. One capsule has around 6 – 6,5 grams meaning that 250g packaging would cost more than £25. While you can find Tchibo coffee for £2.75 per 250g package.
Oh now you hate me for helping both sides? Customers and marketers?
Well...
What do you want me to do. We can't lie to one and support the other. I view trade as a kind of a sport. It's an honest game as far as everybody knows all the rules.
As long as everything is transparent, it’s an honest fight. And I’m here for that.
Correct answer: C Like you made the best deal in your life.
Source: Richard Shotton | The Choice Factory
Read more: You won't admit it. But you're lying.