Understanding Fundamentals of Marketing
To fully grasp how psychology can influence marketing, there must be an understanding of the marketing fundamentals from a psychological perspective. See, marketing is an elegant dance that calls for the full knowledge of psychological principles and human behavior. Marketing is not just about selling products, and not just about creating results. It is a science, daresay an art form.
Modern marketing at its core, requires efficiency and adaptability. Typically, key principles in modern-day marketing that create outstanding marketing strategies, focus on the four P’s: product, promotion, place of delivery, and pricing. They are designed to meet the needs specific to a client, all while being able to stand out in the competitive landscape.
A product must be able to solve a problem or fulfill a need for the consumer. To fulfill that need or solve that problem, it is best to understand the psychology of the consumer’s behavior. This will help distinguish what aspects of the product would resonate with the target audience and what doesn’t. Using consumer feedback and a great deal of market research is crucial when developing a product, ensuring that it aligns with the expectations of the customer.
Promotion should be able to communicate the value of the product to the target audience efficiently. Such examples of how the value can be communicated include advertising, social media marketing, public relations, and more. All while being able to use psychological triggers such as emotional appeal, scarcity, and social proof, are all ways to leverage promotion through those communication methods. When this is all strung together with strategically timed promotional activities and a compelling narrative for the product, there will be a boost in interest and visibility that can be seen by analyzed metrics.
Places focus on how the product is delivered or distributed to the consumers. Making the products available for the consumer at the right times, in the right locations, whether that is online, in a physical location, or through direct sales. Psychologically, you want to have the consumer feel that they have convenience and accessibility, it’ll make them more likely to purchase the product since it’s easier to acquire. That is why it is also important to understand where your target audience likes to shop so that you can make sure the product is at these locations.
The fourth principle, known as price, is considered to be the most sensitive of the four principles since it gives the product a perceived value. By analyzing competitor pricing, and overall market conditions, and knowing the customer’s willingness to pay, helps the seller understand the intrinsic and extrinsic value that consumers place on the product. Additionally, some psychological pricing strategies include discount pricing, bundling, and anchoring, all of which sway the purchase decision of the consumer.
As seen above, these four principles can be used as a window to a degree, showcasing the various ways of psychological thinking in the world of marketing. What this blog aims to do is to rework the marketing logic by exploring it from a psychological mindset, and dive deeper into five different topics: Considering the Role of Emotion in Consumer Decision-Making, How Cognitive Biases Can Impact Marketing Strategies, Using Scarcity to Urge Consumer Action, Understanding the Science of Persuasion, and Producing More Effective Advertising Campaigns with psychological insights.
1. Considering the Role of Emotion in Consumer Decision-Making
Being able to consider the role of emotion in a consumer’s decision-making process is important when creating marketing strategies. Emotions can play a huge role, especially since they can impact consumer behavior significantly, even more than sound logic. Happiness, sadness, nostalgia, and fear can be so powerful that the consumer may create psychological connections to a brand. For example, if a customer can connect positive emotions to a product, this can enhance the loyalty of the customer, which then would increase the likelihood of repeat sales.
Furthermore, rather than just building an emotional connection to a brand or product, consumers might express emotion for a brand in other ways. According to the principle of emotional contagion, consumers often replicate the emotions displayed in marketing campaigns, especially when the evoked emotions are positive. Since there is a push for the consumer to behave similarly to what the campaign is attempting to emulate, there is the likelihood of increased sales in this way too.
By using emotional triggers in a marketing strategy, a brand enhances engagement on a deeper level by creating meaningful connections with their audience members. Utilizing intricate relationships between consumer behavior and emotions can craft more effective, impactful marketing campaigns that drive brand loyalty and success.
2. How Cognitive Biases can Impact Marketing Strategies
The second topic of the blog focuses on cognitive biases, which can heavily influence the way consumers interpret information, how they engage with brands, and how they make decisions on what to do with said brands. What these cognitive biases are, are mental shortcuts that our brain takes, which allows us to process a great amount of information quickly, however, this leads to irrational judgments. Being able to have a full grasp of cognitive biases can help marketers tailor campaigns that align with the consumer’s thought processes.
Anchoring bias is one specific example that shows how an individual can heavily rely on the first piece of information they encounter when making a decision. In order to use anchoring bias effectively, a marketer can strategically position the product features and its initial pricing shape to the consumer’s perceptions positively. Furthermore, by using the framing effect; the way information is presented, can change the way it is perceived. A strong example of this is when a dairy product says it’s “90% fat-free” which expresses a more positive response than the label “10% fat”. Psychologically “fat” is seen as a negative intonation, and if a consumer sees that the negative intonation is gone in great quantities, it’ll still have a bigger impact than the negative intonation being highlighted, no matter how small the percentage is.
Confirmation bias is another cognitive bias that has a strong influence on a consumer. It refers to when a consumer seeks information and retains it in order to confirm their pre-existing beliefs and attitudes. Such a bias can lead to consumers favoring brands that align with their values and viewpoints while dismissing other contradicting brands or information. For marketers this is helpful once plenty of research has been conducted on their target audience, that way any future campaigns can be made to suit the audience’s beliefs.
Loss aversion bias plays more on the anxieties of the consumer. According to this bias, the pain of losing something is found to be more impactful than the pleasure of gaining an equivalent win. From this, a marketer understands that the consumer will do anything in their power to avoid that loss, so making the product seem limited in terms of time or quantity, will make the consumer want to engage with the brand right away.
3. Using Scarcity to Urge Consumer Action
Now, this topic plays off the anxieties of consumers, much associated with loss aversion as mentioned above. Scarcity is a powerful principle in psychology, in which marketers utilize the consumers’ innate fear of missing out, or “FOMO” for short. When people perceive that a product or opportunity is limited in time or quantity (loss aversion bias) it urges them to make quick purchasing decisions. “FOMO” or loss aversion is heavily rooted in behavioral economics and specific strategies marketers can include limited-time offers, low-stock alerts, and exclusive releases, all of which create urgency. These strategies give the consumer a CTA or a Call To Action.
Moreover, once the consumer engages with the brand, by making a purchase or by subscribing. This FOMO converts into loyalty, and the consumer feels like they are a part of something exclusive, something more than themselves. As marketers, being able to seesaw this feeling of exclusivity and loss aversion creates a consistent relationship with the consumer, a relationship that is able to cultivate growth for both parties.
4. Understanding the Science of Persuasion.
Let’s be honest, the whole point of marketing is to persuade, that’s what makes marketing more than just a science. Understanding the psychological triggers of persuasion for a consumer gives the marketer the power to influence decision-making. Principles such as reciprocity, social proof, and commitment are what determine how a customer interacts with the marketed brand.
Reciprocity comes into play when a company offers something of value that is complimentary, such as a free trial, resources, or just any helpful content. Doing this creates the feeling of wanting to give back to the customer since they feel cared for.
Using testimonials, rated reviews, and case studies, is how marketers utilize social proof. By showcasing past consumer satisfaction, any potential new consumers will start to giveaway in their decision on wanting to buy. This is because before a consumer can trust a brand or company, they typically trust the word of their fellow consumers first.
That leaves the final principle for persuasion, commitment. When a consumer has made a commitment and put their time and emotion into a product, the more attached a consumer becomes. A perfect example of showing commitment is by combining it with the first discussed persuasion principle, reciprocity for a subscription service platform. If a subscription service platform offers a free trial, this gives the consumer the mentioned time and emotion to invest into the product. Once the trial period has concluded, the consumer will already feel too attached, therefore leading to the consumer wanting to keep the subscription. Commitment can also be applied to social proof. All a consumer needs is trust, and after hearing positive reviews from their fellow consumers about a product, they would likely want to reap the same benefits, often buying the same product as them.
5. Producing More Effective Advertising Campaigns with psychological insights
Within today’s competitive market, crafting advertising campaigns that resonate with consumers means understanding human behavior and how to tailor campaigns to them. In addition to the topics mentioned above, this section dives a little deeper into additional advertising campaign strategies using psychological insights.
From the lightly brushed topic of positivity from earlier, positive reinforcement is an excellent psychological advertising strategy in itself. It is all in order to create that sense of loyalty, mainly through incorporated rewards and incentives presented throughout the campaign. Such incentives can range from discounts if the consumer signs up, exclusive benefits that they might gain, to rewards for entering a drawing or buying a number of products. Overall this makes the consumer want to come back for more, creating multiple interactions.
On another note, this blog definitely highlights the importance of emotions. But it is also important to quickly discuss how the marketer can present those emotions. That is why having a strong narrative can make all the difference. Being able to tell a story in a campaign can be crucial, especially if the audience can find commonality in some capacity with the narrative. This can help create a greater emotional tie to the brand or product itself.
Lastly, it is important for marketers to regularly do testing for their campaign so it can always adapt. By utilizing A/B testing and consumer feedback, it can help identify what is going to be most effective for the campaign. A/B testing is a test that compares two variants, A and B, and aims to determine which variant is more efficient in reaching a specific goal. For example, if the goal was to determine which of two different colors would be the best for the product, the marketers/researchers would select a randomly selected group of people and put them into two groups, one test color for each group. Both groups will be shown the brand’s products along with products that don’t belong to the brand, and they must choose which product they like the most. Only the products that belong to the brand will be in one of the two colors being tested. The group that selected the brand’s products the most based on visual appeal, determines the new color for the product. Being able to use an empirical approach like this one can enhance overall user satisfaction since it helps tailor more to the consumer’s general desires.
CASE STUDIES: SUCCESSFUL IMPLICATIONS OF PSYCHOLOGY IN MARKETING
Nike’s Marketing of Air Jordan
In 1985, Nike launched a collaboration with basketball legend Michael Jordan, creating the iconic shoe and brand known as Air Jordan. Since then it has transcended sportswear and has become a cultural icon that has demonstrated the effect of powerful branding, emotional connection, and effective promotion.
Product
Air Jordan was designed to not just be another pair of basketball shoes rather it was also designed as a statement of identity and to aspire. Through consumer psychology, Nike was able to frame the Air Jordan to enhance a deeper emotional status among both basketball and sneaker enthusiasts. Nike was able to combine bold new aesthetics with innovative technology, appeasing both self-expression and performance.
Promotion
For a promotional strategy, Nike heavily relied on the emotional connection the targeted audience has with Michael Jordan. Michael Jordan was able to create a larger-than-life persona while he played with the Chicago Bulls, in turn creating an aura around the brand Air Jordan. Through storytelling, Nike was able to showcase Michael Jordan’s career and how it all led to Air Jordan, creating a narrative of triumph, excellence, and aspirations. For the cherry on top, Nike leveraged social proof by receiving endorsements and associating the brand with other celebrities, showcasing diversity to the world. Nike also took advantage of FOMO, by creating limited-time releases and collaborations. All in all sparking urgency, exclusivity, amplifying interest by consumers.
Place
When it came to placement, Nike amplified their accessibility from the get-go by making Air Jordans available at key retail locations. These key locations included online platforms, high-end specialty stores, and collaborations with influencers, essentially leading the target audience to congregate around Air Jordan. By using this psychological principle, Nike was able to provide accessibility, exclusivity, and convenience for its targeted audience.
Price
For pricing, Nike adopted a premium pricing model based on the cultivated image Air Jordan has created based on Michael’s story. By using the premium pricing Nike was able to create exclusivity and desirability. Even more so once they started presenting limited-edition models higher than the normal price points. Which increased the perceived value of the brand, and created urgency among potential buyers.
Coca-Cola’s Use of Psychological Marketing Principles
Coca-Cola is seen as one of the most popular brands in the world and this is the reason why they are the perfect example to showcase psychological principles in marketing. Their brand has shown the importance of consistency and longevity in order to build strong consumer relationships. They have been able to maintain its iconic logo, branding, and tagline ever since its founding in 1886.
Product
Coca-Cola’s main flagship product was originally made to be refreshing and enjoyable for its consumers. They also aren’t just one type of product-only ordeal, they continue to introduce variations including Coca-Cola Zero, and Diet Coke, catering to the specific target audience of health-conscious consumers, all while not having to sacrifice their strong brand identity. Overall, Coca-Cola has been able to meet consumer preferences, demonstrating their understanding of psychological triggers that are associated with taste and health.
Promotion
In terms of promotional strategies, Coca-Cola leveraged emotional connections and psychological triggers through its advertising campaign, focusing on happiness, nostalgia, and togetherness. One specific example was their “Share a Coke” campaign, in which they created personalized bottles with common names, this encouraged consumers to connect emotionally both with the brand and their friends. Additionally, Coca-Cola used user-generated content and social proof in order to tap into the Emotional Contagion, all in all making consumers want to mirror the positive emotions that Coca-Cola exhibits.
Place
As for placement, Coca-Cola’s distribution strategy is almost omnipresent, they are found everywhere such as grocery stores, vending machines, gas stations, and restaurants all over the world. At this point, Coca-Cola has a clear understanding of its target audience’s shopping behaviors, always ensuring that its products can be found wherever the consumer expects to find them.
Price
For pricing Coca Cola has been able to use anchoring to showcase larger package size in terms of price per unit. This has created more value in the consumer’s eyes, making them want the more economical and appealing package rather than just individual bottles. Furthermore, seasonal price promotions create urgency, especially when seasonal flavors come out. These price promotions in combination with seasonal flavors create FOMO for the consumer.
Discussion/Conclusion
To conclude this blog, understanding all the fundamentals of marketing through a psychological lens is one of the most crucial aspects of being a successful marketer. One needs to recognize that marketing transcends mere transactions, and it must embody the intricate interplay of psychological principles and human behavior. When that is done, then professionals will be able to generate more campaigns that profoundly appeal to their targeted audience. Adding onto these facts, it is important to remember the four P’s – product, promotion, place, and price, are the foundation that which effective marketing is built.
Continuing from there, the importance of emotional connections in decision-making cannot be overstated. Marketers should be experts in orchestrating emotional power, they can craft narratives that can engage consumers on a deeper level, enhance brand loyalty, and generate repeat business. Being able to combine loss aversions and the principles of persuasion can help position their messaging strategically, encouraging consumers to engage with the brand. This type of psychological groundwork for campaigns can help nurture a long-lasting relationship between brands and consumers. Most importantly, a good marketer should be able to continually learn and adapt. By implementing practices like analyzing consumer feedback, and utilizing A/B testing, marketers can refine their strategies in order for their campaigns to be successful.
Overall, everyone in the marketing world should be able to agree that psychology is important. It helps companies not only optimize their efforts but also be able to create worthwhile connections with their audience, showing that the brand itself can be more than just a business.
A good marketer isn’t just a marketer, a good marketer is a psychologist.
Mauka Digital understands the complex interplay between consumer behavior and psychological principles, letting us create amazing market campaigns that resonate deeply with your target audience. Through our expertise, your promotional efforts won’t just be effective, but also be able to create lasting emotional connections with your customers. So don’t let your brand suffer from the noise of the competitive world. Contact us today and partner with the psychologists at Mauka Digital to tackle your marketing with confidence.
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https://www.neuroscienceof.com/branding-blog/what-is-marketing-psychology
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https://pubmed.ncbi.nlm.nih.gov/11401791/