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The science of advertising – Getting your services known to the world

The science of advertising – Getting your services known to the world

Advertising is an essential pillar in the business world today. It is one of the best ways to increase the stature and awareness of a particular group, organization, product, brand, and many others. The science of advertising deals with the basics of advertising to make an advertising program successful or promote sales. Advertisements are considered the backbone or the nervous system of businesses.

                The science of advertising can be defined as the proper planning of an advertisement – considering all possible factors affecting its success. The science of advertising involves;

  • Development of an obvious idea to solve a problem
  • Discovering alternatives to the solution (Idea)
  • Collection of data to select the perfect alternative

The science of advertising is developing and using an approach based on fact-finding to formulate and execute an advertising program. Science is based on a collection of facts after different studies or experiments. A similar approach has been used when planning an advertising program.

The science of advertising

The ancient method of advertising was through words of mouth. Merchants and traders would bring all they have to sell to places where plenty of people always converge. They cry aloud to the people the worth and advantages of the products or services.

The advertisement took another turn when symbols and letters were invented. Many were engraved in walls, printed on papers, and other substances. In our world today, we have advertisements in magazines, newspapers, calendars, and so on.

Advertisement has evolved with civilization and has helped to shape our society. These days, celebrities are signed to use a particular product so that followers who adore them will be attracted to that product which is another means of advertising.

Over the years, we have witnessed a series of persuasion using nude pictures or half-naked pictures of ladies to get viewers’ attention. This strategy came from the fact that a more significant percentage of humans are often motivated by what they see.

An average person is exposed to series of advertisements every day through several mediums. They include television, radio, social media platforms, cards, and other mediums. Since there are so many advertising programs today, it should be in our best interest to give a unique solution and make the advertisement stand out. But now, that’s the Science of Advertising.

Stages involved in the science of advertising

                There are four stages or phases when engaging in the science of advertising. They are

Primary Investigation

All scientific programs are based on facts available and those that can be gathered. So, the first phase of the science of advertising is the primary (Preliminary) Investigation. This is the process by which data and information about a particular market, product to be advertised, and the psychology of customers are collected and evaluated.

                This information is collected through market identification, product analysis, and consumer psychology research. Market identification is identifying the type of market that an advertisement will be directed or focused. This could be a geographical location that presents the best market for a product, Gender (Male or female) age group with the highest probability of getting a product, Social class (Rich, middle-class, poor). All of these are considered when identifying a suitable market for a product or brand.

                Product analysis is the examination of a product to know the class (Luxury product, industrial, or consumer goods) to which the product belongs, the uses or advantages, quality, price, etc. Consumer psychology research is the study of the mind and gestures of consumers towards a product. This can be used to evaluate the percentage of public acceptance. All of these will help to provide the information needed to start an advertising program.

The science of advertising

Budgeting and media planning

Budgeting is the allocation of adequate funds to be spent on the advertising program. Many advertising programs do contrary to what advertising science is; by making funds available, their adverts will overshadow competitors advertising alternative products or brands. On the other hand, the science of advertising will make budgeting based on the advertising program’s obvious objectives and targets over time. Excess and inappropriate spending will be reduced to the least minimum.

Media planning is the process that involves selecting suitable media platforms for advertising. In the science of advertising, media platforms should be selected based on:

(1) The size of the market to be used, (2) The effectiveness of alternative platforms in reaching and convincing consumers, (3) The cost of using that platform, and so on.

Implementation of the advertising program

Many advertising programs are executed just for the advertising’s sake without essential planning or research. In the science of advertising, an advertising program is implemented based on the information and research that has been made before the implementation. With this, one can know what works and what doesn’t work, and by the way. One can tweak things to make an advertising program successful.

Evaluation of Results

This is the last stage in the science of advertising. Results are evaluated based on the preplanned expectation as derived from the information gotten from prior research (data). It refers to the evaluation of the performance of an advertising program concerning the advertising plan (i.e., the testing of the effectiveness of an advertising program.)

The number of reached people (audience) and how many sales or convictions are made will be evaluated. This will help in improving future programs.

The advantages of the science of advertising

The advantages of the science of advertising are as follows;

1. Introducing new products

The science of advertising will help to stimulate consumers to a new product. This is because the advertising is based on their psychology, and it will be tough for consumers to ignore.

2. Improving a market

A particular market can be improved with data and information when engaging the science of advertising because all the potentials and flaws will be known.

3. Increased Sales

A Good advertising program done using the science of advertising will bring about more sales, and it would be known things to be reviewed and improved and other markets to be explored.

4. Beating Competitors

One of the best ways to beat rival companies or products is to make a good advertising program. This can only be carried out with the help of the science of advertising. Facts and figures to beat competitors will be presented.

5. Reduced cost of advertising

The science of advertising will help an investor or company reduce the amount used in carrying out an advertising program. Unnecessary spending will be reduced, and spending will be only on obvious objectives, goals, and targeting. With this, funds will be made available for successive advertising programs or other purposes.

6. Choosing the best effective media platform

The science of advertising will help choose the best media platform that will help reach consumers as fast as possible. Many people can be reached in a little while when the best and most appropriate platform is chosen.

7. Proper assessment of an advertising program

The science of advertising gives room for an advertising program to be evaluated. One will be able to know the effectiveness of a program through figures obtained from the program. It will also help know “when to stop and when to continue” with a program to reduce futile spending.

8. Season and timing best for a product

The science of advertising helps to know the best time or Season to execute an advertising program for a product. This will determine the effectiveness of an advertising program. For example, products widely needed in the Rainy Season will not be considered by many for purchase in other seasons. So timing is critical, and the science of advertising will help to know this.

The science of advertising

Disadvantages of the science of advertising

1. Extra Cost

When planning an advertising program based on the science of advertising procedures, extra cost will be needed. To carry out the activities needed in obtaining data and information and also in preplanning the advertising program. On the other hand, this cost will likely not surface in the usual cultural way of advertising because before getting information and data, a market survey and other activities won’t be necessary.

2. Consumes time

An advertising program based on the science of advertising procedures will take more time than the usual way we all know about. This Extra time is necessary to gather the required resources and information. But in a scenario where an advertising program needs to be done in a short period, the extra time for the science of advertising will be ignored.

3. Limited Reach

The science of advertising aims to get the right people to see and engage a particular advertising program in a designated period. This might not be necessary if a product or brand is for everyone, irrespective of location, age group, marital status, and some other factors. There will be no reason to do market research and other activities related to the science of advertising.

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Authority: Strategic Concepts from 15 International Thought Leaders to Create Influence, Credibility and a Competitive Edge for You and Your Business

By John North, Christine Robinson, Matt Smith, Adam Johnson, Larry Morrison, Cathy Fyock, Allan McLennan, Denise Gabel, Jason Van Camp, Nathan Johnson, Jenn Foster, Mark Leonard, Melanie Johnson, Everett O’Keefe, George Smolinski.

Amazon summary:

IT’S TIME TO DISCOVER AUTHORITY

In this insightful book, you will find the collective wisdom of 15 international thought leaders, scattered across three continents and multiple industries, as they share their best strategies for building influence and authority. Covering everything from video and print media to social media and consulting, AUTHORITY lets you inside the minds of experts who have built their own authority and helped countless others do the same. Whether you find yourself in a small business or large, virtual or traditional, you can benefit from the increased impact and success that comes with AUTHORITY.

Inside these pages, you will discover:

  • The most effective ways to build (and leverage) authority
  • How to reinvent your career through writing
  • The increasing power of audio books to build influence
  • How to respect and connect with your audience
  • The value of reputation…and how to build it
  • How to overcome the fear of other people’s opinions
  • The incredible power of belief
  • How to put the world’s largest tech companies to work for you
  • The future of online entrepreneurs
  • How to create a long-lasting legacy

And much more!

Influence, Credibility and a Competitive Edge are Only a Step Away!

From the book:

AUTHORITY is a loaded term. It is filled with meaning that few of us fully understand, but most interpret authority as someone who has the right to give orders or someone in control. Although the word contains “author” as its root, its meaning is not limited to authorship in the traditional sense. Authority goes so much further. In fact, authority and author each find their origins in the Latin word: augere. In the strictest sense, augere means “to increase,” but the term also came to mean to honour or exalt, to promote or raise, and to augment. In time, the word morphed into “author,” that is, creator and one who executes. In the 14th century, these roots (and these meanings) finally coalesced into the words we know: author, authentic, and authority.

Authority, you see, is not about writing. It is first and foremost about creating. The genesis of authority is in the inception of ideas. These can be new ideas or they can be ideas that have been gathered and melded into something unique. The author (meaning, the creator) of such ideas is, by default, the authority on the subject.

Although we tend to think this is true only with the creation of novel ideas or at least a “new take” on old ideas, the truth is that authority also is granted for those who can repackage or repurpose that which already was known. Oftentimes, the so-called expert is simply the person who happens to bring the right information to the right person at the right time. This does not necessarily require a new, astounding way to look at a subject.

The creation that leads to authority is not limited to any one particular medium either. Although authorship of books often is cited as a path to authority, such authority can be gained through creation in any medium. As such, you will find “authorities” on every subject under the sun, from history and politics to sports and crafts. The creation that leads to such authority can come from almost anything.

In these pages, you will find 15 expert perspectives spanning three different continents. These authors come from diverse backgrounds, with entirely different professions and skillsets, and they share their unique observations on authority, what it means, how to acquire it, and how to leverage it.

At the beginning of each chapter, we have included information about the respective author as well as ways you can contact or follow the author. We encourage you to learn more about the authors; engage with them where you see fit.

It is our collective hope you will find the perspectives in Authority to be enlightening and useful. More than this, we hope the lessons of Authority will take root and bear fruit in your life.

Contents

CHAPTER 1: The Future of Online Entrepreneurs

BY JOHN NORTH

CHAPTER 2: I Help Fulfill Dreams! Create A Legacy, Impact, and Income

BY CHRISTINE ROBINSON

CHAPTER 3: It’s Going to be a Good Day!

BY MATT SMITH

CHAPTER 4: Belief is Powerful

BY ADAM JOHNSON

CHAPTER 5: The Book Inside You

BY LARRY MORRISON

CHAPTER 6: Writing as a Reinvention Strategy: How I Wrote a Book and Launched

My New Business (and how you can, too)!

BY CATHY FYOCK, CSP, SPHR, SHRM-SCP

CHAPTER 7: Gaining Your Voice of Authority: Recognizing, Respecting, and Con-

necting with Your Audience – Personally and Professionally

BY ALLAN MCLENNAN P.G.A.

CHAPTER 8: How to Build Your Reputation and Become the Authority

BY JENN FOSTER

CHAPTER 9: Your Authentic Self: Where Authority Lives

BY DENISE GABEL

CHAPTER 10: FOPO: Fear of People’s Opinions

BY JASON B.A. VAN CAMP

CHAPTER 11: The Value of Writing a Book

BY MARK LEONARD

CHAPTER 12: How to Leverage an 800-Pound Gorilla to Become an Authority

BY MELANIE JOHNSON

CHAPTER 13: The New Age of Authority

BY NATHAN JOHNSON

CHAPTER 14: The Force Multiplier: Why Authorship is the Ultimate Builder of Au-

thority

BY EVERETT O’KEEFE

CHAPTER 15: Why Should Authors Make an Audiobook?

BY GEORGE SMOLINSKI

Author details because the authors are the resources used in this book

John North

Evolvepreneur. app CEO & Founder, Strategic Marketer and Book Publisher

https://www.linkedin.com/in/johnnorth1085
https://www.facebook.com/johnnorthauthor
https://johnnorth.com.au

Christine Robinson

Empress On Fire – Leading Transformational Teacher and 6+ Figure Strategist

https://www.facebook.com/christinerob
https://www.facebook.com/likechristine
https://www.instagram.com/publisherchristinerobinson/

 http://christinerobinson.com.au

Matt Smith

Cereal Dad-Preneur

https://www.facebook.com/profile.php?id=1632326310
https://www.instagram.com/mattsmithpueblo/

 www.cerealdadpreneur.com/book

Adam Johnson

Real Estate Investor and Educator

https://www.facebook.com/wholesalehackers
https://www.facebook.com/groups/realestateroundup
https://www.instagram.com/bigsiprealestate/

Larry Morrison

Founder/CEO of College Loan Freedom

https://www.linkedin.com/in/larry-morrison
https://www.facebook.com/collegeloanfreedom

 http://bit.ly/CLFVid

https://www.collegeloanfreedom.com/

Cathy Fyock, CSP, SPHR, SHRM-SCP

The Business Book Strategist

https://www.linkedin.com/in/cathy-fyock-973b735/
https://www.facebook.com/TheBusinessBookStrategist/
https://www.cathyfyock.com/

Allan McLennan, p.g.a.

Chief Executive, PADEM Media Group/USA, Global Streaming Media Market Developer, Technologist & Analyst

https://www.linkedin.com/in/allannmclennan/

 www.pademmediagroup.com/books

Jenn Foster

15X Bestselling Author

https://www.linkedin.com/in/jennfosterseo
https://www.facebook.com/authorjennfoster/
https://www.instagram.com/jennfosterchic
https://authorjennfoster.com/

Denise Gabel

High Trust Environment – Author, Speaker, and Professional Advisor

https://www.linkedin.com/in/denise-gabel-5010794/

 http://thedenise.com/

Jason B.A. Van Camp

Business Growth Strategist

https://www.linkedin.com/in/jason-van-camp-076a5339/

 www.missionsixzero.com

 www.warriorrising.org

Mark Leonard

Book Coach

 linkedin.com/in/markcleonard

https://cartwrightpublishing.com

Melanie Johnson

Publishing, Marketing and Brand Expert

https://www.linkedin.com/in/melaniejohnson-eop/
https://www.instagram.com/eliteonlinepublishing/
https://eliteonlinepublishing.com/

Nathan Johnson

Social Media Advertising and Brand Specialist

https://www.instagram.com/weekdayrehab/

Everett O’Keefe

International #1 Bestselling Author, Publishing Expert, Founder of Ignite Press

 https://www.linkedin.com/company/ignite-press (Company)

 https://www.linkedin.com/in/everettokeefe/ (Personal)

https://www.facebook.com/ignitepress
https://IgnitePress.us

George Smolinski

Founder, Gutenberg Reloaded

https://www.facebook.com/GutenbergReloaded
https://www.youtube.com/channel/UCF_9iLkvxcYlv-c_PcKP50Q

 www.gutenbergreloaded.com

BOOK PREVIEW LINK:  https://www.scribd.com/read/481585237/Authority-Strategic-Concepts-from-15-International-Thought-Leaders-to-Create-Influence-Credibility-and-a-Competitive-Edge-for-You-and-Your-Business

Product details

Publisher : Ignite Press (October 14, 2020)

Language : English

Paperback : 160 pages

ISBN-10 : 1950710963

ISBN-13 : 978-1950710966

Item Weight : 7.8 ounces

Dimensions : 5.98 x 0.34 x 9.02 inches

Best Sellers Rank: #2,207,530 in Books (See Top 100 in Books)

#1,822 in Marketing for Small Businesses (Books)

#20,473 in Leadership & Motivation

AMAZON CATEGORY: Books › Business & Money › Management & Leadership

6 Steps You Need To Follow To Succeed in Making Functional Strategies

6 Steps You Need To Follow To Succeed in Making Functional Strategies

Are you here to learn about functional strategies and how you can pull them off using an organized way? Here is a 6 step guide that will help you understand and design a successful operating system for your company!

1.  Have a Strategic Mind

Before you start making your functional strategies, you need to understand the value of having a strategic mind. It would help if you stopped making short-term plans and start making plans that are more long-term. It’s best if you plan the execution of your dreams by making a ‘To-Do List’ and checking the activities you’re done with. This activity will help you keep yourself on track and achieve your objectives in an organized way. It will also help you in doing the cost budgeting regarding your new functional strategies.

You will often find yourself getting worried about meeting your short-term targets when planning your functional strategies, but you have to get past the fear of failure and make sure you stick to your plan. Yes, sometimes it seems pretty impossible to achieve short-term goals and at the same time functionally strategize for the future. Still, you have to assure yourself that the struggle is for a short time, then things will start to get aligned themselves, and everything will come to a new and better order.

2.  Identify the Business Overview

One way to get a clearer view of the business can be by interviewing the prominent business leaders in your company regarding the current state of the business. You can also get their viewpoint on the company’s desired future state, and it can help you draft your functional strategies.

You can ask them about the company’s challenges and emphasize the opportunities and risks that will be taken in the future. You can use all this information in building a mind map to draft your functional strategies. You can learn from your senior’s experience and refrain from making any mistakes in the past.

3.  Highlight Roles in Making the Functional Strategies

Functional Strategies

You need to define the company and the organizational roles first. Find out the following:

  • What are the stakeholders expecting from the new functional strategies?
  • What needs to change?
  • Who will have the responsibility for leading the change?

It would help if you prevented executives and managers from misunderstanding their roles and derailing them. For that, you need to make a proper plan and identify who needs to do what. Unidentified roles in the organization, especially when functional strategies are to be made, can lead to confusion, and the attention can be shifted from original goals.

Moreover, you need to fix all the expected outcomes and process the timelines, especially the planning and budgeting. You need to clearly understand which stakeholders will have to sign off on what and where you will need permissions and from whom.

Summary of What Needs to be Done To Start Making Functional Strategies

  • Define the organizational goals
  • Research in what is expected of the new functional strategies
  • Define roles and responsibilities
  • Process timelines and set deadlines
  • Clear out which stakeholders will be needed to sign off what

4.  Assess Your Functional Strategy

Assess the development and significance of the functional strategy needed to help the general business objectives. There shouldn’t be a significant contrast between the practical strategy’s self-evaluation and other people’s opinions in the organization. Create a focus on the rundown of valuable abilities to reinforce or holes to fill to help business objectives.

5.  Define Objectives for Functional Strategy

Focus rundown of destinations with discrete and quantifiable advances that portray how a particular objective will be refined. Each essential business objective can be upheld by a couple of targets with a period of one to two years to make sure your functional strategy works.

Deadlines must be explicit, quantifiable, noteworthy, significant, and attached to a near-term cutoff time to guarantee ideal finishing. You need to plan an activity that specifies how the targets will be met. You also need to make sure that you take measures to follow the progress and evaluate how the process took place and if it has been advantageous for the company till this stage. Evaluation can be a very crucial process as it can also help in future functional strategies.

6.  Look Out for Innovation and Growth Opportunities

The functional strategy needs to be goal-oriented by definition. However, they actually must be financed with a reasonable spending plan, ability, and innovation. The test is how to assign assets to the most basic drives and development ventures.

Start with a thorough perspective on your standard financial plan, usually the assets needed to direct all continuous valuable exercises for your functional strategy to give you results. Then, at that point, develop a sound arrangement, moored in essential goals, of the compromises your capacity can make to keep assets pushing toward your functional strategy.

Furthermore, ensure you reasonably comprehend the relative expense, hazard, time, and advantages of potential expense enhancement drives.

Conclusion

We formulated simple steps to help you develop your functional strategy that is organized and succeeds. Here is a summary of what we have suggested for you to do in this article:

  • Have a Strategic Mind
  • Identify the Business Overview
  • Highlight Roles in Making the Functional Strategies

-Define the organizational goals

-Research in what is expected of the new functional strategies

-Define roles and responsibilities

-Process timelines and set deadlines

  • Clear out which stakeholders will be needed to sign off what

●       Assess Your Functional Strategy

●       Define Objectives for Functional Strategy

Look Out for Innovation and Growth Opportunities

Contact us.

Thought Leadership Tweet

By Liz Alexander and Craig Badings

Amazon, Walmart, Wiley, and another website summary

Thought leaders advance the marketplace of ideas by proposing actionable, commercially relevant, research-backed, new points of view. They engage in and showcase innovative thinking as opposed to churning out product-focused, brand-centric white papers, or “curated” content that mimics others’ ideas.

But while individual thought leaders are in plentiful supply (at least, those who self-identify as such), many organizations struggle to establish their thought leadership approach. If you recognize the importance of differentiating yourself to clients by offering compelling points of view that are intriguing, innovative, inspiring—and wholly relevant to them—this book is for you.

Authors Dr. Liz Alexander and Craig Badings, who have more than 50 years of consulting experience between them, have devised a series of questions that will provoke you to consider all the elements necessary to execute a successful organizational thought leadership campaign. The authors have done the preliminary thinking for you so that your organization can better leverage your value in your industry.

This book takes a different approach to many who see thought leadership as part of a short-term product marketing, advertising, or PR strategy. It will ensure that you embed thought leadership across the entire organization and centralize it as part of your client-centric culture.

Many organizations are squandering time, money, and effort on initiatives that do not move the needle in terms of establishing a differentiated brand identity, deep trust, and loyal followership. Arm yourself with this small yet immensely powerful book and that will no longer be something you have to worry about.

#THOUGHT LEADERSHIP tweet is part of the THiNKaha series whose slim, easy-to-read-and-absorb books contain 140 thought-provoking and actionable quotes (tweets/ahas). The book has garnered much recognition, including a 2012 WPP Atticus Award for Merit in the Public Relations and Public Affairs category!

The book is a bunch of small tweet-sized thoughts categorized into a few themes with an introduction to each theme.

Here’s what you can learn from this book according to a reviewer

  • It is possible to build a level of thought leadership through content curation (which the book demonstrates itself). I would add personally that you better add your own two cents into what you are curating and that it’s rare to become a great thought leader simply through curation.
  • You can expand a companies thought leadership by bringing all (or some) of the employees into the process. We talk about this at length in the interview above.
  • One great way to find a niche to become known for as a thought leader is to pick a specific problem in the industry to focus on for a long time first.

The book also has some great questions that are great to guide your thinking about your own thought leadership.

  • What keeps your clients or prospects awake at night? Why? How can you use this to inform your thought leadership point of view?
  • What can you share with your target audience that they don’t already know and would not have thought of themselves?
  • Are you examining your won thinking an how you are processing your information internally to arrive at a thought leadership position?
  • What does your industry or sector treat as sacred (it could be an assumption, process, or goal)? Now imagine the opposite is true?
  • What ways can you restate a client challenge in order to come up with new, insightful thought leadership solutions?
  • Why don’t you take a client challenge to a part of your organization whose opinions have never been sought before, to gain fresh insights?
  • What three trends will impact your clients over the next three years, and can your thought leadership address these?
  • Do you have current content or intellectual property that could be adapted with some extra rigor into a thought leadership point of view?
  • Do you have sector experts whose insights could be backed by robust research and then packaged and leveraged as your thought leadership?

The book manages to distill what could be 162 pages of industry jargon into easy-to-understand, thought-provoking statements. If you’re a self-employed small businessman or heading up a multi-million dollar communications budget, this book will be a useful addition to your reference library.

The world needs innovative thinking and strong leadership like never before, and this book can help the reader to unlock those creative thoughts and strategies so necessary to survive in the rapid-fire industry jungle.

The authors are both at the top of their respective professions. Badings is a director of one of Australia’s leading Public Relations companies and Alexander is a lecturer, author, and consultant to a range of institutions in the USA on the subject.

Author’s email: [email protected]

Publisher : THINKaha; Illustrated edition (October 8, 2012)

Language : English

Paperback : 160 pages

ISBN-10 : 1616990929

ISBN-13 : 978-1616990923

Best Sellers Rank: #3,162,118 in Books

#11,141 in Business Motivation & Self-Improvement (Books)

#11,487 in Motivational Management & Leadership

#25,921 in Leadership & Motivation

https://books.google.com.bd/books?id=o4-l8LirEqcC&source=gbs_navlinks_s
Everything You Need to Know About the Decoy Effect

Everything You Need to Know About the Decoy Effect

The decoy effect is a simple yet amusing strategy used in the business to trick the customers into buying a more expensive product. However, the customer thinks that they are being provided with a better value for their money.

This article will learn more about the decoy effect and how it contributes to selling an expensive product in a business. We will understand the concept of the decoy effect through various examples too!

Read on to find out about the trick you can use in your business to have higher sales. 

1.  What is the Decoy Effect?

The decoy effect is also known as the asymmetrical dominance effect. It is considered a cognitive bias that occurs when people choose between two options when a third, more dominant option is introduced.

You can also say the decoy effect occurs when the customer is given a third option they are more likely to choose. This option is more expensive than the first two.

2.  Some Examples to Help You Understand the Decoy Effect

i) National Geographic Popcorn Bucket Experiment

We will tell you about an experiment the National Geographic ran to make it a little more simple for you to understand the decoy effect. This experiment will show how National Geographic influenced the customer to buy the large popcorn bucket rather than a small or medium one.

They introduced two choices in popcorn to the customers, i.e., small for $3 and large for $7. The customers begin to buy the small ones. However, for the second group, National Geographic introduced three choices in popcorn, i.e., small for $3, large for $7, and medium for $6.5. In this group, most people bought the large popcorn because they saw $0.5. The decoy effect was used here to make the large bucket asymmetrically dominant to the medium bucket! It helps the company make more profit because it influences customer decisions, and they buy the expensive option.

the Decoy Effect

ii) Study to See How Decoy Effect Impact Everyday Decisions

Chris Puto, John Payne, and Joel Huber conducted this study on a group of people. They gave a group of people two options to choose from: a three-star restaurant that was 5 minutes away and a five-star restaurant that was 25 minutes away. They wanted to see if people choose convenience or quality.

Then the researchers added another option to the choices: a four-star restaurant located 35 minutes away. Can you guess what the people in the second group chose? Well, most people chose the five-star restaurant that was 35 minutes away. But why? Due to the decoy effect. The third option, i.e., the four-star restaurant, was asymmetrically dominated by the five-star restaurant and made it seem closer and even had a higher rating.

iii) The Economist Subscription

On an old subscription page, there was an example of the decoy effect. There were three options published: $125 for a print subscription, $59 for an electronic subscription, and $125 for print and electronic submission. The first option seemed reasonable; the second option seemed expensive. However, the third option offered both print and electronic subscriptions.

Which one do you think was the most popular choice? No student chose the first option. The most popular choice was the third option. However, when the first option was eliminated, most students chose the second option. The first option is there to cause the decoy effect only. It was never a practical option.

We hope you understand how the decoy effect can make an impact on customer buying behavior.

3.  How can a Business use the Decoy Effect to its advantage?

You can use the decoy effect for your business and take advantage of it by making more profits. How? Here are a few steps that will help you understand how to make profits using the decoy effect and implement the decoy effect strategy in your business plan.

  • Pick the product or service you want to sell. For example, if your business is a restaurant, you need to pick a product that you think will sell best if the decoy effect is applied. Let’s assume you want to sell fries using the decoy effect.
the Decoy Effect
  • Make sure the customers already like the product that you have chosen. This step is crucial because you want to make the maximum sales, and it’s best to apply a decoy effect on a product that is already the customer’s favorite.
  • Now, it’s time to create the decoy effect! It would help if you created a third option to increase attractiveness towards the product you want to sell most. Make sure you have at least three options. Also, note that more than three options might create decision paralysis.
  • Now you have to come towards the pricing. You need to price your product that aims to have the decoy effect close to your essential product, i.e., the product you want to sell the most. You need to make sure that you price the decoy slightly less but close to your essential product. For example, if you sell fries, you can sell small at $3, medium at $5.5, and large at $6.5. This will create more value for the large fries because it provides more weight than the medium fries.

Summary of the Article

In this article, we aimed to introduce the decoy effect and how you can use it in your business to make higher profits. We gave two different examples to create a better understanding of the decoy effect.

The decoy effect is a scientifically proven method that can be used in any business. You should give it a shot and see if it works for you!

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