May 18, 2011

Behavioral Marketing Should Fuel Ideas and Inform Planning

As advertising has changed, so have the roles of strategists and planners. We must go ever deeper in pursuit of human understanding, past traditional approaches to customer research and segmentation, beyond understandings of demographics, lifestyles and attitudes. We have to understand why individuals and groups behave as they do in different circumstances and in different contexts. To gather real understanding and insight that can fuel ideas to truly ignite our clients’ businesses [...]

Luckily there are tools, frameworks and research which allow us to do just that. Some of them much in vogue at the moment.

Behavioral Economics for example, that tells us why social, cognitive and emotional factors mean people don’t behave as rational economic models suggest they should. Identity Economics explains why people – facing the same economic circumstances – make different choices based on their own identities and the norms they encounter in the contexts of their social, family and working lives.

Academic research in both areas throws up fascinating potential for marketers.

Take the example of consumers in the US and Italy who were asked to either scale up from a plain pizza base by adding toppings or scale down from a fully loaded pizza by removing toppings. In each country consumers ended up with more toppings and a more expensive pizza in the scale down scenario than in the scale up scenario. A result explained through the behavioural principle of ‘loss aversion’.

Or take the experiment that showed consumers who paid a discounted price for an energy drink positioned as increasing mental agility, derived less actual benefit from drinking it (measured in ability to solve puzzles) than consumers who purchased and consumed the exact same product but paid its regular price. Thus showing how the actual efficacy of products – not just the way they make us feel – can be changed by marketing actions such as discounting.

Just a little lateral thinking tells you that such behavioural insights have a plethora of exciting and profitable applications across sectors. From the car industry to retail, software and beyond.

And how, by understanding the role of behaviours and contexts more deeply, it becomes easier to identify where marketing and marketing communications can play a role, and have the biggest impact in today’s world.