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Choice is an Illusion

Choice ILLUSION IS AN FARADOX OF CHOICE HOW WE MAKE DECISIONS AND HOW MARKETERS CAPITALIZE ON IT. Customers want two things at the same time. Marketers understand the psychology of the shopper and their telepathy doesn't stop there. In a mixture of neurology, psychology and good-old fashioned Big Brother-esque research, marketers know how to make you a happy spender. Marketer To have as many options as possible. To be able to decide what to as posc e. as easily MRI MACHINES but at the same time ALLOW SCIENTISTS TO PREDICT AN INDIVIDUAL'S DECISION up to 6 seconds before the individual is conscious of the decision. WHERE YOUR DECISIONS ARE BEING MADE IN YOUR BRAIN? PREFRONTAL CORTEX AMYGDALA NUCLEUS ACCUMBENS Rational decisions (Life and death) Emotional decisions What type of cereal to buy Will that pair of underwear will one more day? THE PARADOX - STUDIES THAT PROVE LESS OPTIONS) IS MORE (SATISFACTION) 1 MILLION EMPLOYEE For every 10 mutual funds offered, Vanguard INVESTMENTS rate of participation dropped by 2% in voluntary retirement funds COMPARISON OF 2 CAR BUYING GROUPS GROUP 1 GROUP 2 BOTH GROUPS ENDED UP EVENTUALLY SEEING GROUP 1 GROUP 2 144 TOTAL OPTIONS first made their had the same choices choices beginning with the category with the most options (56) .ם-םםBa)Bse .ם ם וט ם טטטטטטם but began with the smallest group of 4 ם םט טטוט םa בLhkמ and ending with the category with the most options (56) and ending with the category with the least options (4) ר וL 0ט Lמא n םטtLמםט .םnטטיםם טטח"טטמם GROUP 1 GROUP 2 had a hard time choosing started off carefully considering each option, but quickly became tired and went with the default option. Where much happier with their final car decision. across eight categories In the end, they wound up less satis fied with their final cars. a sample booth of WILKIN & SONS JAMS every few hours, they switched the sample selections from 24 to MNCEMEAT JAMS JAMS on average, all of the Customers tasted 2 FLAVORS OF JAM EACH TASTER RECEIVEDA $1 OFF JAM COUPON Stores and their suppliers are constantly analyzing sales data, but where are they getting the data? 3% 60% OF CUSTOMERS WERE drawn to the larger display 40% STOPPED at the smaller display 30% PURCHASEDA JAR OF JAM SHOPPERS PROVIDE THEIR INFORMATION WHEN THEY SIGN UP FOR LOYALTY CARDS OR EVEN E-MAIL LISTS. SECURITY CAMERAS ALLOW STORES TO PLACE PRODUCTS AND PROMOTIONS AT STRATEGIC LOCATIONS VISIBLE TO THE LARGEST NUMBER OF SHOPPERS. ELECTRONIC SIGNS IN RETAIL ENVIRONMENTS CAN INCLUDE CAMERAS THAT DETECT WHO IS LOOKING WHERE ON THE SIGN RETAILERS USE A FORM OF THE RANDOMIZED TRIALS THAT HAVE BEEN USED SINCE AT LEAST THE 1940S IN MEDICINE. DIRECT MAIL CREDIT CARD OFFERS consumers get in the mail are customized specifically for them. Direct mail was one of the first areas where marketers could easily test the effectiveness of a promotion, by sending one version to some households and another - or no promotion at all -to similar households. CAMERAS HELP COMPANIES DETERMINE the electronic signs then change to attract IN Electronic THE NEW DEMOGRAPHIC gender and age SIGNAGE HOW MUCH IS T00 MUCH INFORMATION FOR STORE TO KNOW ABOUT US? PREGNANCY-PREDICTION MODEL was based on purchases made on REDTarget credit card. looks like she's might be pregnant send her coupons for baby items THE CONSUMER NON-CHOICE: shopping behavioral patterns scientists shared with retailers RIGHT TURN HERE: most shoppers turn right first, so retailers put their newer, more exciting items in the front and right of their stores Retailers invest in extra advertising at the front of the store People don't have their shopping goals predetermined; their shopping goals solidify as their shopping progresses Consumers are more sensitive to external cues earlier in their shopping, so their goals are more malleable According to Harvard Study COUPONS GIVEN AT THE STORE ENTRANCE inspired the consumer to spend more at the end of their visit. At a store where the average consumer spending was $4 COUPONS GIVEN INSIDE THE STORE Some customers received these consumers increased They had little effect on the total amount spent. a coupon that offered $1 off any purchase of $6. their average spending to be able to use the coupon. Other customers received these consumers a coupon that offered $1 off any purchase over $2. decreased their average spending. MAXIMAL FLEXIBILITY AND MINIMAL DECISION COMPLEXITY People want as many options as possible, People want to be able to decide what to buy as easily as possible.. Walmart but may not have the best business strategy after all LARGE STORES MAY GET MANY CUSTOMERS INSIDE Because the goal of maximal flexibility functions in the first stage of the shopping experience but then these customers may not buy so many products as they otherwise would simply because they cannot decide with the large selection. Thus, there exists an optimal size of the store, optimal in the sense that customers are spending in there the largest amounts of money buying the largest number of products. THE CONSUMER NON-CHOICE: shopping behavioral patterns scientists shared with retailers Become a "SATISFICER MAXIMIZERS' and be happy with what you've got. Tend to be less happy and even more depressed. They are more prone to regret, both experienced and anticipated, and they engaged in more social comparison, especially upward comparison, than satisficers. Sources: http://www.swarthmore.edu/SocScilbschwar1/Choice%20Chapter.Revised.pdf http://www.youtube.com/watch?v=-13AiOS4nCE&feature=share http://www.psychologytoday.com/blog/more-tech-support/201011/the-burden-choice http://abcnews.go.com/Businessiretailers-study-psychology-shopping/story?id=15829903#.U017IW hqiN http://news.softpedia.com/news/The-Psychology-of-Shopping-20432.shtml http://www.dailygood.org/view.php?sid=63 http://www.abc.net.au/sciencelarticles/2010/07/05/2944917.htm http://www.nytimes.com/2010/02/27/your-money/27shortcuts.html?_s=0 http://threeminds.organic.com/2009/09/ithe_psychology_of_choice.html http://www.psychologytoday.comiblogithe-why-behind-the-buy/200906/6-sneaky-ways-sales-spur-spending presented by: BESTPSYCHOLOGYDEGREES.ORG DEVELOPED BY N NOWSOURCING

Choice is an Illusion

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Choice is an illusion. This infographic provides a look at how we make decisions and how marketers capitalize on it.

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