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Behavioural Economics
Behavioural Economics
Behavioural Economics
Behavioural Economics
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Behavioural Economics

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Behavioural economics is the talk of the research town and whilst the desire exists to apply the principles, many a puzzled client has asked just how we incorporate it within insight projects. …

Behavioural economics is the talk of the research town and whilst the desire exists to apply the principles, many a puzzled client has asked just how we incorporate it within insight projects.

This is a short paper written by Jan Worsley, Reserach Director at SPA Future Thinking, applying behavioural economics to research.

For more information contact Jan on +44(0)1865 336 400 or jan.worsley@spafuturethinking.com

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  • 1. Behavioural EconomicsJan Worsley, Head of InnovationSPA Future Thinking
  • 2. Behavioural EconomicsBehavioural economics is the talk of the research town and whilst the desireexists to apply the principles, many a puzzled client has asked just how weincorporate it within insight projects.So, what is Behavioural Economics? It’s clear that if these effects apply to clean, carefully written questionnaires, then in theBehavioural Economics attempts to explain real consumer world they mean the differenceand predict the short-cuts our sub-conscious between purchase and ignorance. This thinningbrain uses to navigate a busy world whilst only of the fog around the workings of the sub-bothering our conscious with a manageable conscious brain, provides a great opportunityamount of the most important information. to account for and even measure these effectsThis results in deep-routed biases in the way within research.we make decisions, often in ways we’re noteven aware of. This has led some to question Packaging is one such area that demandstraditional market research methods and a few consideration. Amongst packaging’s manyto suggest reverting back to localised sales functions, lies its ability to titillate the sub-testing. conscious brain enough to attract attention and consideration in a competitive and crowded market, something shoppers can rarely if ever Behavioural Economics articulate successfully. With the proliferation of attempts to explain and online research can we really allow ourselves to measure packaging outside of a retail predict the short-cuts our environment? sub-conscious brain uses to navigate a busy worldTruth is researchers have been workingwith, and around, behavioural economics fordecades. Question order, sequential-monadicand question phrasing effects are all subtleand unconscious influences on our seeminglyrational decisions that have now been neatlylabelled as behavioural economic principles(priming, anchoring and framing respectively). Behavioural Economics
  • 3. Behavioural EconomicsApplying Behavioural Economics to Online Anchoring the offer:Research: Anchoring makes a litre of Tropicana lookIn fact online is one of the most effective expensive next to a carton of Del Monteplaces to apply behavioural economics but cheap when placed amongst innocentprinciples and get as close as possible to the smoothies. This is the reason why you shouldcontext of purchase. It’s worth saying that always make sure a premium offering isthe answer probably doesn’t lie in creating 3D available in your category even if it sells little,environments, where all but the most dedicated as it pushes up the price anchors.first-person shoot-‘em-up veteran fights to findthe mouse-move needed to face the fixture. Asour objective is to get the most authentic result,not the most authentic simulation, we want Question order, sequential-online navigation as automatic, familiar and monadic and questionsubconscious as possible. phrasing effects are all subtle and unconscious influencesPriming and consumer choice: on our seemingly rational decisions that have now beenPriming has been shown to have significantinfluences on consumers’ choices. Even neatly labelled as behaviouralsub-consciously priming people with sets of economic principles.youthful or elderly associated words, changesthe speed they walk (Bargh 1996). To primerespondents with supermarket cues, rather than A favourite example of anchoring is athe EastEnders episode they’ve just watched, Campbell’s soup promotion which sold twicewe can show participants photographs of their as many by telling shoppers they were limitedretailer of choice (arriving, parking and walking to “12 per person” (Wansink et al 1998).through the car park) so they have similar Therefore we should be introducing a packthings in their mind. On entering retailers anchored within a fixture, jostling with its peersshoppers often pick-up a basket or trolley, and for attention, without any preferential treatmentmost retailers allow a slow-down zone where or prior notification of its presence.shoppers get their bearings – all these can beincluded in any orientation exercise. This alsoprovides an opportunity to prime them with in orout of store advertising that could be the covertvariable you wish to understand. Behavioural Economics
  • 4. Behavioural EconomicsFraming and effects on response: of Behavioural Economics, allowing collection of purchase decisions where participantsFraming has also shown to have important think more like shoppers. The nirvana is aeffects on response. Framing, broadly, is why shopping trip with a number of fixtures toa 90% fat free yogurt is more appealing than create the ultimate online sales test. Hundredsone with 10% fat. We want simulated purchase of shoppers would go through our virtualdecisions to be framed in the context of a supermarket doors, blissfully unaware ofsupermarket shop not a new online toy or bland what they were testing and what we wantedonline survey. Not only does the interface have to understand – they would just shop. Eachto be intuitive enough to be easily forgotten, by contributing their own take, consciously andframing an individual purchase decision within a sub-consciously, on that invaluable but oftenwider shopping experience makes the choices over-looked packaging function – purchase.more natural and not over rationalised. Toget participants used to the system and settledown into a purchase rhythm you can presenta number of categories before the category ofinterest – gaining a more automated purchase To learn more about how we applyresponse where you want it and allowing any behavioural economics to packagingchild-like exploration of the new online toy tohave passed. Also within supermarkets fruit research and how best to approachand veg come first, alcohol comes last so this testing through online please contact:should be reflected or else risk being jarred Jan Worsley, Head of Innovationback towards the reality of conducting justanother online survey. T: +44 (0) 1865 336 400Once a purchase is made, more standard E: jan.worsley@spafuturethinking.compackaging understanding can begin.Standout can be gauged by recall from theactual purchase occasion - that automatedunfocused moment - rather than playing spotthe difference for a 10 second period. Choice-based exercises can be used to gauge thepersuadability of the pack once forced into ourconsideration set and brand/product evaluations Ref: Bargh, J. A., Chen, M. & Burrows, L. (1996). Automaticity of social behaviour: Direct effects of trait construct andcan be made after priming with the pack with stereotype activation on action. Journal of Personality andmore emotional measurement tasks. Social Psychology, 71, 230-244Online research has the flexibility, control and Wansink, B., Kent, R. J. & Hoch, S. J. (1998) An Anchoring and Adjustment Model of Purchase Quantity Decisions. Journal ofcost-efficiencies to implement the principles Marketing Research, 35, 71-81 Behavioural Economics

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