Presentation is loading. Please wait.

Presentation is loading. Please wait.

Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, Qual’s Secret Weapon: Behavioral.

Similar presentations


Presentation on theme: "Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, Qual’s Secret Weapon: Behavioral."— Presentation transcript:

1 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Qual’s Secret Weapon: Behavioral Economics in Practice Presented to QRCA SF (and includes input from the chapter) January, 2013 Jay Zaltzman Bureau West Market Research Los Angeles, California, USA Tel:

2 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Behavioral economics We’ve been hearing a lot about behavioral economics in the past few years. Some QRCs are intimidated: “What is this behavioral economics thing?” “Is it a new skill I’m supposed to have?” I have good news: behavioral economics is a new perspective on things we already know. Understanding this perspective can help increase your value to clients. So it’s a win-win!

3 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Behavioral economics: how do people make decisions? Traditional economics approach: when people have all the necessary information, they will make the rational decision. Behavioral economics found that’s not the case. Decisions aren’t based mainly on logic: the context (choices, environment) and emotions play a major role.

4 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Asking direct questions When conducting market research, it’s tempting to simply ask participants direct questions: –Would you buy this product? –What do you like about that product? –What do you think of this brand? The problem is, research participants lie. (Perhaps unintentionally.) –When asked a direct question, people try to theorize how they would make a decision in a given situation, which can be different than actually being in that situation. –They try to figure out what they would logically decide.

5 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Behavioral economics: understanding the irrational decision-making process Dan Ariely says: while people are irrational, they’re predictably irrational.

6 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , The power of the default Ariely gives an example of organ donations: Germany 12%, Austria 100% –“Check the box below if you want to participate in the organ donor program” –“Check the box below if you don't want to participate” Do people choose the default because they don't care? –On the contrary: it’s because of the complexity of the decision

7 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , The power of the default (continued) It even happens with experts! Study conducted with doctors: –Patient with hip pain, medications hadn’t worked, referred to have a hip replacement; doctor discovered forgot to try one medication. Most doctors would pull patient back. –Second scenario: doctor discovered that two medications hadn’t been tried. Majority opt for hip replacement. When the decision is complicated, the default has huge power.

8 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Frame of reference Two sets of choices. –Weekend in Paris, including hotel and breakfast –Weekend in Rome, including hotel and breakfast Or: –Weekend in Paris, including hotel and breakfast –Weekend in Rome, including hotel and breakfast –Weekend in Rome, including hotel and breakfast, but coffee is not included Third option has a surprising impact

9 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , How much will people pay? The frame of reference has such a huge influence on our decisions. –Company sells product A for $20 and a higher-end version, product B, for $25 –80% of sales are product A –Second company comes to the market with a premium option, let’s call it C, for $35 –Guess what happens to the first company’s sales…

10 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , How much will people pay? (continued) People have an “anchor,” a price they expect to pay, for certain items. Marketers desperately want to know how to change that anchor. –One example: when Starbucks opened, and people decided it was worth paying the higher price for their coffee. –Starbucks changed the context: different ambience, smell of roasting beans, Italian names (“grandé,” “macchiato).

11 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , How we value things Once people own something, they value that thing far more than they did before they owned it… by a significant percentage. –We fall in love with what we have. –We focus on what we might lose if we part with that thing. –Can lead to a great deal of disappointment when you try to sell your home! –But has important implications. For example, utilizing customers to help promote a product.

12 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Changing habits Charles Duhigg wrote The Power of Habit. –Once habits are developed, people do them unconsciously, without thinking. –Habitual behaviors are made up of three parts: the cues (trigger), the behavior itself, and the reward. –Marketers frequently want to change habits: Febreze discovered they needed to define the reward. Starbucks changed the cues. –Or wait for the moment went the context changes. Like when people are on vacation. (Or have children, or get divorced, or move…)

13 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , The role of emotion We all know that our emotional state can play a role in decision-making. –Dan Ariely ran experiments and the surprise was just how much of a role emotions play. –People were asked to make decisions when relaxed, and asked again in an aroused state. The difference between the two was shocking – like Dr. Jekyll and Mr. Hyde. –This has important implications for safe sex and drunk driving… but also for consumer decision-making.

14 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Asking direct questions The moral of the story: when it comes to market research, direct questioning won’t always work. We need to give participants the context to answer the question. –Physical context (what are the cues? What are the choices?) –Emotional context (how do they feel about it?) That’s where our skills as professional qualitative researchers come into play. We already have the tools to design research that uses methods other than direct questioning. Following slides can be used as a reference. –List is not exhaustive; feel free to add.

15 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Understanding customers’ relationship with… Direct questioning: “How do you feel about X?” “Why is it important to you?”

16 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Understanding customers’ relationship with… “Choose a picture that best illustrates how you feel about X.” Or: –Choose among colors. –Choose among random pictures and tell a story about how it relates to X. –Role play –“Here’s a photo of Mabel. Mabel is everyone’s favorite grandmother. Explain to Mabel about X…” (Thanks, Revelation Global) –“Close your eyes…”

17 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Impressions and benefits of a brand Direct questioning: “What do you think of X?” “What do you like about it?” “What don’t you like?”

18 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Impressions and benefits of a brand “Think of as many things as you can say about X and write them on the lines shown.” (Thank you, Pat Sabena!) Or… Brand

19 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Impressions and benefits of a brand Laddering –“What attributes of X are important to you? –“What’s the benefit to you of attribute Y?” –“Tell me a bit more about the personal value of that benefit to you. Why is it valuable?” Or…

20 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Impressions and benefits of a brand What do people say about the product or brand? What do they think about the product or brand? Can add: What do they feel? Or… “Imagine a situation where the product was not available.” –“Describe what life would be like.” “Write a love letter to the brand…” Provide a wastebasket and ask what participants would throw away from the brand and what they’d keep from the brand. What would a competitor (or the competitor’s salesperson) say about this brand? What would you tweet? What would you really want to say if you weren’t limited to 140 characters?

21 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Which positioning statement is best? Direct questioning: “Please read this statement. This isn’t an ad, but it’s an idea that might be behind an ad. What do you think of what it’s saying? “Now please read this statement…” “And this statement…” “Which statement works best? Why do you say that?”

22 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Which positioning statement is best? Provide a bullseye with the attributes the statements need to convey in the center. –Participants place positioning statements based on how close they are to those attributes. (Thank you, Abby Leafe!)

23 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Where is the brand in the competitive field? Direct questioning: “Who are the competitors for X?” “How does X compare? In what ways is X better? In what ways is X worse?”

24 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Where is the brand in the competitive field? “If brand x, y and z were people at a party, what would they be like? What car would they drive up in? How would they be dressed? How would they behave?” (Or for more broad-stroke impressions:) “What animal would they be? Why do you say that?” Perceptual map: –(Based on attributes defined earlier) –“Where is X on this map?” –“Where are the competitors?” (one at a time) Higher Lower Less More

25 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Which features are important? Direct questioning: “Here is a list of features. Which of these is important to you? Which are unimportant? Which are just ‘nice to have?’”

26 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Which features are important? “Here is a list of 20 features. You each have four green dots and four yellow dots. Put a green dot on the features you want the most, and put a yellow dot on the features that you want, but that aren’t as important to you as the green-dot ones.” (Or give them a certain number of dollars to allocate.) “Imagine this is the box for this product. What goes on the front of the box? What goes on the back?”

27 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Evaluating a new product Direct questioning: “Do you like this product? Why do you say that?”

28 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Evaluating a new product “The first stick figure is the typical customer for this product. Let’s describe that person…” “The second stick figure is you. Let’s go over the same descriptions.” “Now let’s compare the two.” Name: ____________________ Lives where? ________________________________ Car drives: __________________________ Marital status: __________________ Kids? How many? ________________ 5 adjectives to describe lifestyle: ____________________ Name: ____________________ Lives where? ________________________________ Car drives: __________________________ Marital status: __________________ Kids? How many? ________________ 5 adjectives to describe lifestyle: ____________________

29 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Evaluating a new product “Imagine yourself using the product.” –“What would change?” –“How would it fit in to your routine?”

30 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Evaluating designs, logos Direct questioning: “What does this communicate to you?”

31 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Evaluating designs, logos “What’s the first word that comes into your mind when you see this logo?” Or: Place the designs on a perceptual map, with the axes based on the attributes we want to convey. Or: “What if this logo came to life…” Higher Lower Less More

32 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Likelihood to buy Direct questioning: “How likely would you be to buy this?” Alternate approach: “Here are your options and their prices. How do you go about choosing?”

33 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Many other options Examples? Use your creativity. Consider: –Context –Emotions Also, consider calling us for advice!

34 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) , Thank you Jay Zaltzman Bureau West - Market Research & Marketing Strategy –Our Research Tidbit newsletter keeps you up to date on what's new and interesting in marketing and market research each month –Please send me an if you'd like to receive it. Just and write “newsletter” in the subject line


Download ppt "Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, Qual’s Secret Weapon: Behavioral."

Similar presentations


Ads by Google