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Rajwant Sandhu Research Innovation 2016

Behavioural economics (BE) is the buzzword of the moment; in government, policy, finance and more recently, marketing. Marketers wonder if this is the latest fad, or if BE holds truly transformative potential. We believe that BE is not a fad and more than a tool. BE is a large body of knowledge, collected in lab and in field over several decades, removing the mystery around decision making. The key insight from BE is that humans do not make rational decision, but rationalize the decisions they make. Traditional market research practices rely on rationality, relegating insights to the post-rationalization process. In contrast, behavioural methods can access valid insights into the actual motivators of a decision. To highlight this, we will present a case study comparing insights from traditional market research to insights from a behavioural approach.

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Rajwant Sandhu Research Innovation 2016

  1. 1. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Behavioral Economics Rajwant Sandhu, PhD Fresh Squeezed Ideas 7 December 2016 Marke&ng’s latest shiny new thing, or the &pping point for marke&ng transforma&on?
  2. 2. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Traditional research elicits ra3onaliza3ons not mo3va3ons.
  3. 3. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 1. Future projec-ons are not reliable 2. Memories are skewed 3. Change is hard 4. Choices are based on rela-ve not absolute evalua-ons 5. Context maPers 6. We want to fit in. 7. We are not good at valua-on. $$$ $ $ The Decision 7 Subconscious Drivers of Behavior
  4. 4. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Behavioral Science Principles for Research Implicit Over Explicit Task Over Ask Them Over Us Implicit Associa3on Task Video or Photo Assignment AUribute Elicita3on Task Principles Not Tools
  5. 5. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 1.  How can we move our brand away from diet and towards health associa3ons, and… 2.  which of our flavor op3ons is most related to diet? A Snack brand asked:
  6. 6. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Implicit associa-ons Subconscious assessments are made within milliseconds ✗ ✓ Then Rationalization I like his eyes, his lips… Subconscious Assessment
  7. 7. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Implicit Associa-on Test Implicit associations reveal the biases consumers have with your brand Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Diet Health Apple Cookie Health Diet Health OR Apple Diet OR Cookie By comparing responses in these two phases, we can determine subconscious associations between your product and specific characteristics Diet OR Apple Health OR Cookie
  8. 8. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 IAT vs Tradi-onal Explicit: Explicit Respondents stated the flavor option with the lowest calories as being most related to diet Implicit Respondents showed an association with a flavour option that was not the lowest calorie and diet. The packaging of this flavour option had strong connection to a previous diet campaign launched by the brand The implicit task allowed us to accurately identify which flavour option had the greatest potential to hold the brand in the diet space
  9. 9. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Mind the (say-do) gap! Intentions are not reliable 45% say that free range meat is important But only 7% of chicken purchases are motivated by free range cues 32% say fair trade is important Less than 2% of purchases are motivated by fair trade 55% say their purchasing habits are responsibly motivated But 30% of those don’t actually purchase responsibly 80% say they recycle everything they can Only 54% of packaging is actually recycled Neither is memory 1 in 6 Americans say they “definitely voted” in 2014 midterm elections, but they actually didn’t! Measure behaviours – not a weak proxy!
  10. 10. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Task, don’t Ask How they actually consume How they say they consume …Except for consumers of one flavour option We asked consumers how they consumed their snack, but we also asked for multiple video and photo diaries of their consumption behaviours over the course of one week. We were able to leverage how some consumers actually consumed and how others aspired to consume to define a new messaging territory, which we situated within a relevant culture context
  11. 11. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Them over Us - Attributes most valued Which of the following are ideal attributes for cookies? But wait…. there’s nothing on ‘only for me’!a)  Natural Sweetener b)  Real Chocolate chips c)  Low Calorie d)  No artificial flavours
  12. 12. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Attribute elicitation task Benchmarking Your Brand3 Qualitative Insights4 Relevant Comparisons1 2 Ranking importance of attributes
  13. 13. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Our List vs. Their List Our List The client added attributes to the list generated by respondents. None of those items made the top 5 list of what consumers valued Their List Their list reveled what they were actually seeking in their cookie experience, which contributed to our strategic recommendation for the brand Letting respondents tell us what mattered, revealed an aspect of the product that was not previously considered, but offered an opportunity to connect with consumers.
  14. 14. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Traditional research elicits ra3onaliza3ons not mo3va3ons.
  15. 15. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Behavioural Science principles elicit mo3va3ons not ra3onaliza3ons.
  16. 16. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Thank You! www.freshsqueezedideas.com P: 416.235.0909 x 159 E: rajwant.sandhu@freshsqueezedideas.com
  17. 17. Behavioral Economics: Marke3ng’s latest shiny new thing, or the 3pping point for marke3ng transforma3on? Research Innova-on- Rajwant Sandhu, PhD, Fresh Squeezed Ideas, 2016 Q & A Ray Poynter The Future Place Rajwant Sandhu, PhD Fresh Squeezed Ideas Your Photo

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