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Decoy marketing

This intriguing article discusses decoy marketing, a tactic marketers use to make their products look better by comparing them to inferior ones offered for a similar price. The author, Roger Dooley, discusses falling prey to this when shopping for shaving cream. First he stares at the shelf, trying to decide between dizzying numbers of options; then he sees that one variety has in its midst taller cans of the same product, but with 20% more for the same price. Instantly he buys, not one, but two of the bigger can, and goes on his way.

What happened? Essentially, his brain was tricked into redefining the situation. Instead of comparing several different products, his mind zeroed in on the very simple decision between products A and B, where they were identical except for the amount of product. This made the decision quick and easy: “B is the much better value!” and once the decision had been made, the other competitors had been eliminated without really considering their merits.

The key element here is that products A and B–the “real” product and the decoy–are almost identical except for the key difference that clinches the sale, in this case amount of product. Gentner and Markman (2006, Psychological Science) explain this forced easy decision this way:

[Comparing items] involves an alignment of structured representations yielding commonalities, differences related to the commonalities, and differences unrelated to the commonalities. One counterintuitive prediction of this view is that it should be easier to find the differences between pairs of similar items than to find the differences between pairs of dissimilar items. This prediction is particularly strong for differences that are related to the commonalities.

In other words, if two items are identical except for a couple of key points, it’s much easier to compare them (and thereby pick the non-decoy). And our brains are lazy. This laziness–among other things–is ripe for marketers to exploit to get us to buy their product. Decoy marketing works by exploiting one of the many shortcuts our brains like to take.

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2 Responses to “Decoy marketing”

  1. Dave Gallagher says:

    Is it that our brains are lazy, or is it that our brains are faced with the economic constraint of time?

    There are a zillion different brands of shaving cream, though the amount of time it would take to compare all of their relevant qualities, and then put a dollar value on that, would be considerable.

    I think a lot of times people like to focus on what they deem as the few important qualities (maybe one or two), compare those, and make the best decision they can make based on that.

    When a company does this for you, you’re faced with less stress picking out a product. You don’t have to take the time to create “chunks” marking the differences in products.

    Apple, and other smart retailers, do this with the “good, better, and best” approach. Take iPods for example. The cheaper one has less memory, and only comes in one color. More expensive options give you more memory, and a variety of colors. Pretty easy to pick and choose here.

    On the other end of the spectrum, there’s a company like Dell. When you buy a PC through them, it’s a project. You pick out the various components which go inside of the computer, what software you want on it, and essentially fully-customize what you want. It’s now really hard, and time-consuming, to compare what you just customized to that of another computer maker.

    The shaving cream company, with “20% more free!” invented a “chunk” out of the mess of deciding between different shaving creams. That gives people a focal point to make a decision (so long as it is perceived as relevant by the buyer), and they can save time using it.

    I would agree this would be a form of laziness if time was infinite, but it’s not, and it has a value attached to it much like money.

  2. Jennifer says:

    Dave, I admit “lazy” was a bit of a shortcut word (which may or may not prove my own point). We certainly do use shortcuts to save time, but those shortcuts aren’t necessarily engineered for optimal decision-making, just ease and speed. I think the success of decoy marketing lies in the fact that it does, as you say, provide a focal point that saves people time. It doesn’t help them make the best decisions for them, but then, it’s not meant to; it’s meant to sell a product.

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