Applications of Psy to Marketing - From Two-system Perspective
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This document discusses how psychology relates to marketing from a two-system perspective. System 1 is the autopilot - it is fast, automatic, and associative. System 2 is the pilot - it is slower, more effortful, and rule-governed. Marketing aims to influence System 1 associations between brands and meanings. Consumers are not always rational and make choices based on active goals and the reward centers of the brain. An effective marketing strategy involves understanding the goals customers want to achieve and positioning brands to offer high goal value.
Applications of Psy to Marketing - From Two-system Perspective
- 1. Applications of Psychology to Marketing 1 Mark Ng 2014
- 2. Focus of this course How to do marketing from a psychological perspective?
- 3. How psychology relate to marketing? Do you think consumers are rational?
- 4. Traditional views about consumers Consumers are rational decision makers Their decision making process would be affected by different factors Psychological factors Personal factors Social factors Cultural factors
- 5. Todays class Reading: Kahneman, D.(2012). Ch.1 Barden, P. (2013). Decoded Ch. 5, 6
- 6. Two system perspective System 1 Autopilot Implicit System 2 Pilot Explicit Input Decision
- 7. Characteristics of two systems System 1 System 2 Perception and Intuition Reflection Action Fast Parallel Automatic Effortless Associative Slow-learning Thinking Slow Serial Controlled Effortful Rule-governed Flexible
- 8. Evidence of two systems: Stroop tests Automation vs Manual
- 9. Experience of autopilot
- 10. Auto pilot Sense and Autopilot Pilot Skin Ear Eye Tongue Nose
- 11. Two systems in conflict
- 12. Pepsi Challenge (1980s) Why Pepsi prevails in test, but Coke takes the market?
- 13. Coca Cola = Santa Claus?
- 14. Learning System 1 Auto pilot Associative learning Classical and operant conditioning Imitation System 2 Pilot Cognitive learning Information processing Social cognitive learning
- 15. Formation of associated network System 1: all sort of sensory information linked to the brand
- 16. Associated meanings types Common examples: Brand-specific claims Ad-specific ad execution, message Brand identification logos, trade dress Product category occasion Evaluative reactions positive/negative emotions
- 17. Product and Psychology How consumer make their choice? Why new product fails? Why you pay more for brands? Issues of changing package design
- 18. How consumers make their choices? How you choose among them?
- 19. Traditional views Motivation needs and wants? Multi-attribute model? I like it, so I buy it?
- 20. However We have different needs and wants We are not so rational all the time We like many things, but we may not buy them (Berns & Moore, 2012)
- 21. New perspective: Goal Value Perspective Reward centre of our brain predicts purchase (Berns & Moore, 2012; Knutson et al., 2007) Activation of reward centre (OFC Ventral Striatum) Future sales
- 22. Goal value perspective Reward center determine willingness to pay The more relevant a product to an active goal, the higher the expected reward and willing to pay Products and brands offer high goal value consumers have a high willingness to pay when they fit their goal
- 23. Implications on STP: The consumer goal, not the customer or the category, is the fundamental unit to define the market E.g. what are the goals for drinking coffee?
- 25. Positioning Goal-based category = define competition and position Coffee: Competitors for recharge vs Competitors for relax Product with good positioning = products clearly offer high goal values in a particular category When I think about drinking a coffee for relaxation, I would go to. Which goal activate the brand? By purchasing this product, out customers want to be, have, do.
- 26. Summary: People choose products and brands relevant to their achievements of goals Goals are basic unit of understanding consumer purchase Goals can be activated and pursued on autopilot