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Confirmation Bias & its applications in Marketing
Confirmation bias leads individuals to favor information that supports their existing beliefs, which can result in significant misinterpretations and decision-making errors. The document discusses how companies like Colgate and Ford faced product failures due to confirmation bias, highlighting their neglect of critical evidence contrary to their assumptions. This emphasizes that even strong organizations can suffer from the consequences of distorted perception shaped by confirmation bias.
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Confirmation Bias & its applications in Marketing
- 2. Confirmation bias isa tendency people have to interpret evidence in ways that supports or preserves their existing beliefs, which sometimes leads to statistical errors. Confirmation bias is a phenomenon wherein decision makers have been shown to actively seek out and assign more weight to evidence that confirms their hypothesis, and ignore or underweigh evidence that could disconfirm their hypothesis. Confirmation bias is a filter through which you see a reality that matches your expectations. It causes you to think selectively, but the real trouble begins when confirmation bias distorts your active pursuit of facts. Biased Selection of Evidence Biased Interpretation of Evidence
- 3. 1) FREELANCER.COM |MAILCHIMP.COM Customer Loyalty and Retention Action • Affirmation messages Behaviour • Confirmation bias of quality work done Result • Loyal Customers
- 4. Colgate Kitchen Entrees FordEdsel – Product Failure • Market Research • New features and premium pricing Confirmation Bias Outcome- Product failed 2) COLGATE|FORD EDSEL Brand Failure and Product Failure •Launched scented soaps •Huge success 1806 • Introduced - Colgate Kitchen Entrees • Past success and growing frozen meal market 1982 • Invested more $16 million to promote it. • Product failed 1985 • 1957, economic recession •Bizarre pricing strategy
- 5. Monochromatic Screen with aGreen backlight & the most popular ‘Snake’ game Set people on the path of gadget-obsessed geek Finnish design aesthetics, reduced size with every generation of mobiles Nokia DNA- Distinct but consistent ‘Candy bar’ look Possibility of Flip- phones (Moto Razr) neglected Heavily relied on Symbian OS, App store only for tech-savvy people Apple i-phone Revolution, 2007 Once over 50% Global Market share started falling QoQ Failed attempt to move towards Windows OS, LUMIA phones Once over a 50% of Market Share (Globally) was later sold out to Microsoft for $ 7.5 Billion. Even the mightiest & strongest companies can fall because of confirmation bias.
- 6. Presented & Submitted By, Group-06, Marketing,2014-2016 Batch 14020841036 Divnay Bhutra S 14020841136 Kashyap Shah 14020841123 Anubhuti Gupta Webliography http://www.bouty.net/2015/07/ marketing-failure-case-colgate- kitchen-entrees/ https://en.wikipedia.org/wiki/Ed sel www.cnet.com/news/farewell- nokia-the-rise-and-fall-of-a- mobile-pioneer/ http://www.smartinsights.com/p ersuasion-marketing/persuasion- marketing- principles/confirmation-bias- customer-loyalty/