Marketing X Behavioral Science
Marketing is all about trying to change consumer behavior. Behavior science is all about trying to understand and explain behavior. Given these facts, if marketing is not based on behavioral science, what else should it be based on?
In fact, marketing has all along been based on behavioral science, albeit often on a limited or sometimes even a misunderstood interpretation of the concepts. "Man is not rational in his choices," exclaimed the behavioral economists and won the Nobel prize in economics. Marketing has known it all along. The entire industry of luxury goods is based on making the consumers pay exorbitantly more than what the product is worth. Advertising has always been trying to tug at the consumers’ emotions and try to nudge them to buy things they did not know they ever needed or nudging them to one brand against another, by building on their insecurities, aspirations and subliminal desires. China has built up multi-billion-dollar shopping extravaganzas, such as Double-eleven and 618 riding on the "scarcity effect" and “loss aversion”. The entire industry of KOL marketing is based on the ideas of “social proof”. In fact, many of the behavioral science ideas practiced by astute marketers are far more sophisticated in execution than described in popular books on behavioral economics.
Marketing never considered the consumer to be rational
Behavioral economists may have just discovered that consumer is not rational, but marketers learned the fact from theories of Sigmund Freud and Carl Jung more than a century ago. Marketing considers it as an indisputable fact that our desires go beyond acquiring the most comfortable or reliable car and are influenced by driving forces of sex, power, and insecurity. Most models of consumer needs talk about multiple layers of needs including functional, social, and emotional needs. Brand image has been envisaged as having layers of product features, social cues, and emotional associations. The presence of a pretty model by the product may have been viewed as SIF (supposedly irrelevant factor) by economists, but marketers have always known that it will strongly influence consumer choice.
The key part of behavioral science that marketing has always embraced is psychology - particularly the ideas from Freudian and Jungian psychology of the unconscious and archetypes are well exploited by brands and are used to appeal to the consumer unconscious rather than rational mind.
However, despite this familiarity and understanding, there are some clear impediments, which prevent marketers from leveraging the full power of behavioral sciences.
Getting the best from behavioral science for marketing
Firstly, while marketers are aware and employ some concepts of behavioral sciences (recognized by them mostly as psychological drivers of choice), these are not deployed in relation and recognition of the choice model. Is the consumer buying with rational deliberation (system 2) or is mostly driven by habit or instinct (system 1)? Clearly, this "decision model" needs to be at the core of the marketing process and the usage of the tools should emanate from this. An arbitrary usage of the behavioral sciences-based tools is likely to be misdirected. The marketing action is not built around consumers and their choice behavior, which even within a product category, may be unthinking and intuitive at times but rational and deliberate at other times. The model does not design the strategy and all elements of marketing around this core to nudge the consumer in the desired direction. This results in an erratic and piece-meal utilization of behavioral sciences concepts, which does not leverage their full capability.
We at Behave! Consulting have developed a comprehensive model built around consumer behavior, the segmentation of the behavior, and identification the factors and heuristics which influence the consumer choices in different segments.
Secondly, marketing’s exposure to behavioral sciences is limited. While many marketers are familiar with the psychological concepts of multiple layers of needs and social drivers, they often lack knowledge of other important areas of psychology, evolutionary psychology, behavioral neuroscience or social psychology. As a result, the utilization of behavioral science for marketing is limited to a few familiar ideas and concepts such as framing, loss aversion and endowment effect, popularized by behavioral economists sound new to marketers. The learning in behavioral sciences (lead by behavioral economists) is expanding at an enormous rate, and millions of dollars are spent in academic experiments and research to achieve socially desirable behavioral changes. This learning is of great value to marketers but is mostly neglected.
We at Behave! Consulting, go beyond obvious ideas psychology or behavioral economics, and look at a comprehensive set of factors emerging from all sub-disciplines of behavioral science to design the marketing strategy.
Even if the marketer invests in familiarizing himself or herself with hundreds of concepts from the multi-disciplinary behavioral science, most do not use a framework for putting these together into a structured model, which guides their usage. Whether to use the endowment effect or exploit the representative heuristic, cannot be left to the whims and fancies of the the creative team. We need a structured model which leads to the evaluation of all relevant concepts in relation to the brand, marketing objective and the context, to decide whether they can be effectively used for marketing.
We at Behave! Consulting, have developed a framework, to look at all the choice influences in a structured manner, map the category and the existing brands on these influences, and develop options for development.
Fourthly, there is no toolkit that helps the appropriate deployment of the concepts. What are the different ways in which we can use endowment effect to our advantage? Endowment effect may be used to make purchase and consumption more personal, or create a feeling of participation and investment, or let the consumer customize the product or the consumption. A systematic exploration of the options through a toolkit yields a far better result than a random solution.
We at Behave! Consulting have developed a toolkit to deploy the relevant concepts and heuristics into appropriate execution.
Should you have any questions about behavioral science, please contact our Behave! experts:
Ashok Sethi
Email: ashok.sethi@illuminera.com
Mavis Tong
Email: mavis.tong@behave-consulting.com
