12/16/2023 0 Comments Decisions decisions shoppingMeanwhile, there are other strategies at play to try to increase sales volume and expedite purchases. And then, to help you understand the scale of the savings offered, it writes out the discount as a percentage, so you know that one item is being sold at 28 percent off, while another item is being sold at a 34 percent discount. It also shows the recommended retail price of the item. When you go to Amazon to buy something, it doesn't only feature the purchase price. But if it's advertised as 80 percent off, you might be more inclined to buy it, knowing that you're unlikely to find a better deal elsewhere.ĭalakas points to Amazon as a great example of how these metrics are used by marketers to increase sales. If a sign advertises it as 20 percent off, you might think it's a reasonable price, but nothing to snatch up. If a shirt is $18, it's hard to know exactly how much value you're getting from that purchase. Percentages provide a standardized range that helps us place prices into context. In many cases, the percentage discount holds more sway over our decision-making than the actual price of an item. Sales affect our brains in a similar way. Over time, we're likely to accept that number as reasonable just because it was the first price we found. Even if we're stunned by the high price of a particular product, that first number shapes our expectations for what is an acceptable range of prices. In general, the first price we see has a significant effect on our perception of the value of an item. When we do price comparisons, we aren't only looking for the best deal-we're also trying to get a sense of the realistic range an item might cost. Start off by considering anchoring bias: When we go to purchase a new product, we likely don't intuitively know what that item should cost. There are tons of ways your brain betrays you when you want it to make a smart, sound, objective buying decision. In fact, if you want to get dizzy thinking about how illogical your brain tends to act, check out this grid of consumer biases collected by Business Insider. Our individual capacity to overestimate ourselves is one critical bias that affects consumer behaviors, but it's far from the only one. Sometimes, our decision-making is at its least rational exactly because we overestimate our ability to not be influenced by advertisements.Īs you might expect, this plays right into marketers' hands. No one is immune to having their own inherent biases, but many people like to think that they're better than this irrational decision-making.Īccording to Dalakas, that's one of the challenges of being human: We aren't robots, and we don't make mechanical, rational decisions all the time. Or, in the case of consumer psychology, it's more likely that everyone in the room is at least a little bit wrong. If everyone thinks that they are smarter than everyone else, then someone has to be wrong. The irony is that most people say 'I am not likely,' but they think other people are." "The students had almost double the confidence in themselves than other people. "The results were astounding," Dalakas says. The second: How likely are you to buy a product endorsed by a celebrity, and how likely are other people to do the same? The first: How likely are you to be affected by an advertisement, and how likely are other people to be affected by an advertisement? To illustrate the inherent challenges faced by irrational consumers seeking to make rational buying decisions, CSU-San Marcos marketing professor Vassilis Dalakas asked his students two sets of questions.
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