How Psychology &

Marketing are
related?
 FIVE Theories of Focus

In the psychology of marketing; Priming, Decoy,

Scarcity, Framing and Reciprocity are
techniques used to influence consumer behavior.
While they all aim to persuade consumers to make a
purchase, they work in different ways.
 Priming Effect

Priming refers to the process of exposing consumers

to a stimulus that influences their behavior or
attitude towards a product or service.
For example, showing an advertisement that
emphasizes the health benefits of a product before
asking consumers to make a purchase can prime
them to focus on the product's positive attributes.
Cont...

Brand Priming
Brand priming is used to influence a person’s
immediate thoughts actions through the name or
logo of a brand. That can help increase revenue if the
primed reaction is to buy or use the product or
service. Let’s look at some examples to understand
better.
 Examples

Red Bull primes for energy and speed.

A Boston College study looked at the impact of
logos on a video racing game. Evey race car has a
brand with a different company logo. Red Bull’s logo
had already primed players to have more energy and
be faster if they chose that particular brand. The
study showed consumers felt the Red Bull logo could
actually “give them wings” in the race and make
them faster.
 Examples

Nike primes for feelings of achievement and

exercise.
Nike uses elite athletes in their promotions and
employs taglines such as “Just Do It” to show the
athletes’ strength and perseverance. When someone
starts a new sport or wants to get fit, they think of
Nike products as something that helps them achieve
their goals.
 The Decoy Effect

The decoy effect is a psychological occurrence that

means consumers are more likely to change their
preference between two options when a third less
appealing option is introduced.
In short, the decoy effect works best when taking
advantage of comparison shoppers.
Examples: Decoding the Decoy Effect

Let's say you are buying popcorns in a movie theatre

and, there are 2 variations.

Small – Rs.120
Large – Rs.250

Which one would you choose?

The smaller one, right? Why?
Because large seems a little too expensive!
Cont...

Now, apply the decoy effect and bring in another variant.

Small – Rs.120
Medium – Rs.220
Large – Rs.250

Which one do you think will sell more? The larger one?
Because you think that the large is reasonably priced of
the three when a closer analysis decodes the entire story.
This is known as the decoy effect:
When given a third choice - which is
asymmetrically placed of the first two other
options - customers tend to choose the third
one.
 Scarcity Effect

Scarcity involves creating a sense of urgency or

exclusivity around a product or service. This can be
done by emphasizing limited availability or a
limited time offer.
 For example, telling consumers that a product is
only available for a limited time can create a fear of
missing out (FOMO) and increase their motivation to
make a purchase.
Cont...

In social psychology, the theory of scarcity dictates

that as humans we put a higher value on things that
we believe are scarce.
From time to time, companies like Apple, OnePlus,
etc. release limited edition products at a special price
and package them as limited-period offers. The idea
is to let their audience know that here is a product
that is not going to be around for long, urging them
to rush and take the plunge before it becomes too
late.
 Example

When you're sent an email that warns, "Something

left behind in your cart will soon get sold out" you're
more likely to do something about it than if it only
reminded you that you happened to leave something
behind in the cart.
Regardless of whether they truly need the product,
the sheer sense of uniqueness and scarcity impels
them to quell any scepticism in their mind.
The scarcer the item is, the more valuable the
product becomes.
 Framing Effect

A technique that takes advantage of the tendency

for people to view the same information but
respond to it in different ways, depending on
whether a specific option is presented in a positive
frame or in a negative frame.
The predicament of framing effects is that people are
frequently provided with options within the context
of only one of the two frames, which limits their
choice and in effect, decision.
 Example

Let's assume you are in a supermarket to buy juice.

One brand claims it is 90% sugar-free. Another
brand says it only contains 10% sugar. Which one
would you go for?
Most customers would opt for the one that is 90%
sugar-free. Let's face it; that sounds so much better.
This is because "% sugar-free' worked better than "%
sugar only'. This is called the framing effect.
 Theory of Reciprocity

Reciprocity marketing is providing value upfront to

motivate customers or prospects to give you
something in return. This marketing principle is
based on our natural tendency to return a favor.
Think back to the last time you gave someone a
birthday present or a shoutout on your social media
page.
 Example

Goodmenu is a food preparation and delivery app. It is

struggling in the market with a mere 500 customers. In
order to turn the table (literally), they announced a new
scheme whereby one can order 5 meals over the next 10
days and get a chance to visit one of their sophisticated
kitchens in the city.
This inevitably piqued people's curiosity about food
preparation, the quality of food and other tidbits about
the app. Predictably, the number of customers who
wanted to explore new options began to increase. Word of
mouth spread like wildfire, which brought in newer
customers.
Cont...

The beauty of the theory of reciprocity is that it is

premised on the policy of give and take. This implies
that customers tend to be more cooperative and
positive towards the company if they are treated in
the same way. Give something and get
something back.
THANK YOU!!!!!