The Application of Psychological Methods to Marketing

By: Jared Berg

The Psychological Perspective

The consumer is an enigma that every business man, marketer, and politician has been trying to understand. While each sector of our economy has been attempting to understand consumer behavior, they seldom seek advice from a large field of science, psychology. The psychological perspective can be especially useful when analyzing consumer behavior. I seek to provide three ways that marketing can be improved if it is looked upon from a psychological perspective.

In 2012, Dunkin’ Doughnuts initiated a fascinating marketing campaign were a sprits of coffee scented fragrance would be released on busses when the Dunkin’ Doughnuts jingle played on the radio. This campaign was wildly successful which is evident by a 16% spike in visitors at locations near bus stops and an overall 29% increase in sales in the duration of the ad (Annear, 2012). While the success of this campaign could be from a wide variety of factors, one that is often unacknowledged is the psychological concept of priming from classical conditioning.

Pavlov was one of the first researchers to provide a significant evidence of classical conditioning through the experiment best known as Pavlov’s Dogs. The researcher would ring a bell, and then feed each of the dogs. A measuring device was attached to the salivary gland of the dogs as a way to measure the behavior elicited from the bell (conditioned stimulus). Following each exposure to the bell and food, the amount of saliva was measured and recorded. Pavlov then removed the reward (food) and measured the amount of saliva produced after ringing the bell. It was found that the dogs, when exposed to the conditioned stimulus of the bell, would start salivating regardless of the presence of food (Carpenter & Huffman, 2011). This shows that it is possible to transform a neutral stimulus into a conditioned stimulus that elicits a response.

Obviously, the Dunkin’ Doughnuts campaign is not identical to Pavlov’s experiment. However, this marketing campaign could be viewed as an example of classical conditioning and priming. Coffee drinkers are already conditioned in a sense to the smell of coffee, which elicits the response of increased desire for a cup of coffee. When potential consumers are on a bus either on their way to or from work, the smell of coffee and the Dunkin’ Doughnuts radio commercial could act as a primer strong enough to nudge bus riders enough to purchase coffee when they walk by one of the many locations in Seoul.

Priming Effects in Advertising

Utilizing the placement of advertisements is an important component of any marketing campaign. Research suggests that if this is done effectively, it can increase the effectiveness of the advertisement. However, when done improperly, it can harm the image of the product and potentially the company. Laran, Dalton, and Andrade (2010) conducted five experiments focused on revealing various effect of priming in a marketing type environment. One of these experiments was focused on the consumers tendency to automatically correct against persuasion. This is derived from a general distrust of businesses and corporations which often results in the consumer assuming some form of bias or dishonesty lies at heart of the advertisement. Researchers hypothesized that slogans are susceptible to being perceived negatively by consumers due to an automatic correction, when brand names are not met with the same level of scrutiny. This hypothesis was confirmed in their findings that slogans produced a reverse priming effect, meaning that participants reacted opposite of the hypothesized response. This effect was tested by presenting advertisements to customers using brands that encouraged the spending of money and then one that encouraged the saving of money. As depicted in figure 1, priming tactics that were targeted at spending money were found to spend more and vice-versa. Slogans elicited responses that were opposite of what was targeted. When the advertisement was encouraging the saving of money, participants had a higher willingness to spend and were more likely to save when prompted to spend. Researchers suggested that a major part of this finding could be due the consumers persuasion knowledge which creates an unconscious correction to perceived bias.

Protect Your Advertisements

The utilization of priming appears to act as a double-edged sword. Unfortunately, avoiding any form of priming can be difficult in the field of marketing. A study conducted by Finlay, Marmurek, and Morton (2005) suggests that priming can affect the encoding of explicit information provided in advertisements. This is all based on the general premise that explicit information will produce intentional encoding, where as implicit information produces unintentional or incidental encoding. From these two assumptions it was found that priming occurring prior to exposure to an advertisement could subject it to comparison and search for inconsistencies. This often leads to a general negative view toward the company or brand and the product’s features. Researchers suggest that when consumers view a competing company’s advertisement, they unintentionally compare other products to what was seen previously. This being said, a Nike advertisement that is followed by an ad from a newer shoe company such as Allbirds, could result in Allbirds being compared to the precedent of Nike’s products. Implicit information on the other hand, appears to be less susceptible to this contrasting effect. Researchers suggest that this is due to the incidental encoding that is produced from the implicit information, thus never reaching the extra encoding that explicit information is exposed to through intentional encoding where the contrast effect occurs.

Marketers could utilize implicit forms of communication that elude to the key features of the shoe, rather than explicitly stating them. This could lead to the product being viewed positively considering that the priming effect produced by other sporting goods advertisements viewed prior to exposure could carry over, thus leaving the consumer to make assumptions of the new brand as being an adequate option. Finlay, Marmurek, and Morton (2005) suggest that the product subject to priming effects must require the consumer to contemplate the purchase, which often doesn’t occur with low cost routine purchases. While merchandise with low costs could still be affected by a priming effect, it would not be as great as larger purchase items. In addition, implicit content in advertisements are not completely immune to a contrast effect. It was noted by the researchers that implicit information can be subject to a similar priming effect through incidental encoding which was comparable to the intentional encoding of explicitly stated information.

Allbirds has utilized implicit information-based marketing campaigns in the past. As seen in image 2, the advertisement is comprised of an image of the shoe with a wool fiber background. While completely avoiding the use of explicit information, Allbirds is able to communicate to its audience that their shoes are comprised of a comfortable wool fabric while maintaining a modern style. The findings of Finlay, Marmurek, and Morton (2005) suggest that this implicit style of marketing is a safer alternative if the advertisement will be placed in an environment where priming will likely occur.

The continual use of purely implicit information for all advertisements can limit a marketing campaign. A possible way to increase variety in a campaign while protecting the products image from priming effects can be through selective placement of advertisements (Finlay, Marmurek, & Morton, 2005). If a new shoe company were to market its product, it could be beneficial for their ads to be placed in a health magazine rather than a sports magazine as a way of avoiding the priming from top of the industry brands such as Nike and Adidas. Failure to do this could lead to the new shoe being compared directly with other reputable brands which would most likely leave the product with a fairly negative interpretation (assuming that the new shoe company doesn’t have a prevailing reputation). The placement in a health magazine would allow the marketer or company to include explicit information to clearly portray the features of the product, while eluding some of the risk through the contrast priming effect. Larger companies might not be affected by this priming effect because they are most likely the ones that set the standards for comparison. This is merely a hypothesis; however, it could be reasonable considering the accumulated knowledge of a brand that is accumulated over time through past purchases, advertisements, or cause related marketing (CRM) campaigns.

Allbirds was founded in 2014 and has experienced substantial growth over the past two years. Despite its fast growth, it is still building a reputation which must be guarded carefully. The implicit-based marketing campaign was a safe way to protect its delicate brand image and a promote its product which the founders are describing as “the most comfortable shoe on earth” (Carson, 2018).

The findings of Finlay, Marmurek, and Morton (2005) report that explicit information can be negatively affected by a contrast priming effect which can leave the consumer with a false representation of the elements of the product or company. One could hypothesize that the findings of Laran, Dalton, and Andrade (2010) could be exaggerated further if the slogans were subject to the priming of other advertisements prior to exposure. This suggests further reason for marketers to either design their advertisements’ content adequately when knowingly placing them in an environment fraught with the risk of priming presented by other advertisements.
The Nike advertisement depicted in image 3 provides an excellent example of uses of explicit information and slogans that could lead to negative interpretation by consumers. Research by Laran, Dalton, and Andrade (2010) has revealed that slogans suggesting the purchase of products or spending of money lead to a reversal effect by consumers (see figure 1). Considering that part of the advertisement included a slogan that encouraged the reader to get a pair, one could conclude that the consumer would behave similarly to what was seen in the 2010 study. While this effect might not be as prevalent in a company as large as Nike, one could still hypothesize that an effect could still be present. A company with a lesser reputation (such as Allbirds) would most likely experience a substantial reversal effect from the use of the slogan, along with a general comparison effect if there were to be any competing ads presented prior.

Increase the Odds of Purchase


Any person in business is constantly devising new ways to increase the sales of their product. While there are countless factors that affect consumer behavior in the market place. There are a few simple concepts that could be adopted to a campaign that could increase the potential of purchase.

A study conducted by Kees (2011) found that future oriented individuals are more likely to initiate preventative actions as a way of promoting future goals. Whereas present oriented individuals are more heavily persuaded by preventative actions when they are applicable to pressing goals. Evidence suggests that a marketing strategy could increase efficiency if they were to focus on appealing to present oriented individuals. Considering future oriented individuals are more likely to implement preventative or proactive actions to achieve a specific outcome in the future, it would be a safe assumption that they could be persuaded by an advertisement that is framed at a pressing issue as well. Not only would the focus on present oriented individuals increase efficiency of the marketing team, but it would also decrease the overall cost of the campaign. This decrease in cost would be attributed to the reduction of overall time and resources that would have been spent towards marketing to both types of individuals individually.

The key concept to utilize when targeting the present oriented individual is to utilize framing. Kees (2011) describes how the framing of an issue can increase the probability for an individual to take action. Thaler and Sunstein (2009) also suggest the way that a situation is framed provides substantial influence on how an individual will perceive a situation. Continuing with the previous example of a new shoe company, this additional research could further their reasoning for placing an advertisement in a health magazine.

The reasoning for this is the content within a health magazine could provide an opportunity to effectively frame a consumer need that can be satisfied with a new pair of shoes. An article based on a new diet, or exercise regime could inspire the consumer enough to decide they want to make a change to better themselves. A present or future oriented individual could be more susceptible to make the first step in bettering themselves, which could be achieved through the purchase of some new running shoes. The rest falls upon the shoe advertisement itself, but the power of framing has already worked its magic.

Utilize the Full Potential of CRM and Philanthropy


Throughout the past decade, it has become a custom for larger businesses to adopt philanthropic marketing initiatives (Rana, 2013). Alongside of philanthropic marketing, CRM campaigns have also increased in popularity and now influence approximately 75% of adult purchase decisions. To compensate for this, businesses have increased advertising expenditures from $1 billion in 2005, to $2 billion in 2016 (Hamby & Brinberg, 2018). Rana (2013) described how these marketing techniques have generally provided further growth of the business and the initiative that is being supported in the campaign. While CRM and philanthropic marketing campaigns can be beneficial to companies of all sizes, it should not be treated as a sure-fire way to increase your business’s perception among consumers. Firm motive behind the CRM campaign if positive, can further increase the likelihood of purchase, or at a minimum, increase the perception of the company. However, if there is a negative perception of the firm’s motives (being interested in the firm rather than the cause), the likelihood of purchase decreases and the company’s image can be tarnished (Baek, Byon, Choi, & Park, 2017). Researchers found that globally known brands can benefit from utilizing CRM campaigns. However, congruency is crucial when implementing this type of a strategy. Findings suggest that a globally known brand can be negatively impacted by a CRM campaign if the customer finds the firms intention of the advertisement to be in-congruent with the CRM campaign message. Findings reported by Webb and Mohr (1998) suggest that consumers with high persuasion knowledge require a higher level of congruency than individuals with lesser knowledge on the topic. With this said, it is best for larger firms to be genuine in their claims and values through the duration of involvement in CRM campaigns.

Hamby and Brinberg (2018) cited an example of Yoplait and their CRM campaign that was focused on providing $0.50 cents of funding to the Breast Cancer Research Foundation for each lid that was sent to the company. While this campaign was wildly successful and received over 8 Million lids. However, the campaign took a sharp turn when consumers learned that there was a donation cap of $100,000 that falls very short from the expected $4 million. This donation cap was sparingly mentioned and resulted in legal action for deceiving its consumers. Non-profits such as Think Before You Pink actively search to correct deceitful CRM campaigns that appear to use a cause as a cash grab rather than genuine support of the cause. While larger companies are able to withstand the repercussions from blemishes such as the one previously discussed, smaller companies could severely damage their reputation if they were stray from congruency in their CRM campaigns.

A study conducted by Rademaker, Royne, and Wahlund (2015) described how pertinent consistency is when claiming to support an eco-friendly cause. Researchers tested consumer’s perceptions to a new chocolate bar which proudly displayed an eco-friendly label on three varying mediums advertisements being bus, pamphlet, and electronic. It was found that consumers responded most positively when the eco-friendly claim was matched with an equally eco-friendly medium (electronic) and least positively when the advertisement was promoted through print and mobile transportation. Assuming these findings replicate to other countries, one could hypothesize that consistency is a crucial factor when implementing CRM related campaigns. If this concept were to be implemented into todays market, it is very possible that the product would be perceived higher if there were to be a well-advertised cause related issue at the company’s roots. A company aiming to utilize a CRM campaign for an environmental cause should consider using environmentally sound packaging, advertisement method, and product (if possible). While not all of this can be economically achieved by a start up company or newly launched product for obvious budget reasons, it could improve the initial perception of the consumer from virtually any market.

As CRM has increased in popularity over the past decade, consumers have adopted greater caution prior to supporting a campaign. Hamby and Brinberg (2018) described how the purchase of a CRM product produces a positive emotional response following their decision. Researchers have attributed this positive emotional response to the fulfillment of a societal obligation. Barone (2000) found that CRM campaigns can elicit a preference from consumers if they believe that the company’s reason for supporting cause is genuine. In fact, participants in the study were willing to pay more or even select a product that of lesser quality for a product from a company that implemented a CRM campaign. This finding was consistent with research conducted by Madden, Roth, and Dillon (2012), which found that consumers’ willingness to pay is influenced by global companies who display socially responsible behavior. Researchers hypothesize that these findings could be used by companies as a way of maintaining prices when conducting business in multiple different countries through marketing their corporate social responsibility. Results of Barone (2000) displayed the consumers tendency to select a product from a company with a CRM background if there was a slight price increase, decrease in product features, or decrease in quality. This suggests that an increase of price, or even the offer of a lesser product, creates a more enjoyable response from the consumer. While this could be for a wide variety of reasons, one could hypothesize that consumers want to adopt some of the burden of a cause related issue to justify their purchase. This acceptance of a greater price can elicit a positive response from the customer because of a perception that they gave more than necessary for a good cause. Webb and Mohr (1998), suggests that consumers often attribute the price of the product as the same amount being donated for a cause, thus making them feel as if they have made a greater impact than the one actually made. Researchers also found if the donation to profit ratio was valued as fair by the consumer, they would be more likely to perceive that campaign positively.

Applying the Psychological Perspective


Patagonia appears to have fully integrated many topics that were previously discussed. On Black Friday of 2016, Patagonia released a statement that all profits earned on that day would be donated to grass roots non-profit organizations that are working to protect our planet (Marcaio, 2016). The company labeled this event as a “fundraiser for the earth”, which would be considered an explicit slogan. However, this company avoided the reversal effects that often occur when using this type of content because of the placement of their advertisements. Considering that Black Friday is essentially a national holiday where everyone travels to the nearest mall to purchase goods at what they perceive to be great deals, stores often meet this holiday with endless promotions to persuade consumers to their doors. Patagonia utilized this opportunity to advertise a fundraiser for the environment, which was a relatively untouched category during this time of the year. This precisely timed promotion properly avoided the reversal and contrast priming effects suggested by Finlay, Marmurek, & Morton (2005); and Laran, Dalton, and Andrade (2010), thus letting the advertisement run without creating many misinterpretations.

The Black Friday Patagonia campaign also properly utilized the findings of Barone (2000), that revealed the consumers desire to feel as if they had made an impact by making a trade-off. The trade-off of this campaign was to purchase the Patagonia products at full price when every other store in the nation was offering discounts. This most likely elicited the positive emotional response that occurs with fulfilling a social obligation through the purchase of a cause related product (Hamby & Brinberg, 2018). The timing of this campaign was very elaborate because it also permitted the company to take advantage of any framing effects that are present during Black Friday. Our society fully incorporated the belief that the holiday season is about giving, which presents an opportunity. Not only was is the entire season framed on giving, but it also prepares consumers to spend money on friends and family. Patagonia properly took advantage of the presented framing effects by allowing the consumer to reward themselves receiving the satisfaction of giving to a wholesome cause, and to purchase gifts their loved ones would enjoy.

This campaign also maintained a genuine cause that has been a consistent value throughout the duration of the company. This is evident in Patagonia’s commitment to donate one percent of their annual profits to grass roots non-profit organizations, regardless of the time of year (Marcaio, 2016). Upon conclusion of the 2016 Black Friday sale, Patagonia had achieved 10 million dollars in sales which was 8 million greater than what was projected. This clearly shows the benefits of fully utilizing the psychological perspective of CRM campaigns, priming, and framing. One could only imagine what psychology could do for you.

References

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