Guest lecture within the field of consumer behaviour prepared for the University of Antwerp (applied economics). I explore theories from (social) psychology to demonstrate our essential social nature. In the second part, these lessons are applied for a better new product development and communication.

1. There is no ‘I’ in Marketing

3. There is no ‘I’ in Marketing
1. The ‘I’ illusion: irrational biases in individual decision-making.
2. The ‘we’ species: a super social ape.
3. Understanding social behaviour
= understanding consumer behaviour.
4. What does this mean for marketing?
– Start with WHY
– Join the conversation
– Co-creation

4. Part 1
The ‘I’ Illusion
Irrational biases in
individual decision-making

5. ECONS
Individual =
‘Homo Economicus’
Human decisions =
purely rational choices.
(expected utility theory)
Based on
Statistics & Mathemetics
HUMANS
Irrational biases in
individual decision-making.
System 1 and System 2.
(prospect theory)
Based on
Psychology
Views on decision-making

6. Daniel Kahneman
Irrational biases in individual decision-making
• Psychologist
• Nobel prize in
economics (2002)
• System 1 and system 2
• Irrational biases

7. Daniel Kahneman
Prospect Theory
Prospect theory is a behavioral economic theory that
describes the way people choose
between probabilistic alternatives that involve risk,
where the probabilities of outcomes are known.
The theory states that people make decisions based
on the potential value of losses and gains rather than
the final outcome, and that people evaluate these
losses and gains using certain heuristics (mental
shortcuts). (Wikipedia)

8. Daniel Kahneman
Prospect Theory
A.If heads, then you gain €100,
if tails then you gain nothing.
B. You immediately get €46.

9. Daniel Kahneman
Prospect Theory  Loss aversion
If heads, then you gain €150, if
tails you lose €100.
Would you take the bet?

10. Daniel Kahneman
Prospect Theory  Loss aversion

11. Daniel Kahneman
Loss Aversion
In economics and decision theory, loss aversion
refers to people's tendency to strongly prefer
avoiding losses to acquiring gains.

12. System 1 System 2
Well-considered & Slow
Reason-based
The lazy controller
Limited processing capacity
(which explains the blind spots)
The more experience you have in
the field, the less energy it takes.
Automatic & Fast
Emotion-based
Associations
Simple calculations
95% of our mental processing.
Unconsciously.
Daniel Kahneman
Irrational biases in individual decision-making

13. Daniel Kahneman
24 x 172 x 2
System 1 System 2

14. “The pupils reflect the extent of mental effort in
an incredibly precise way”
Daniel Kahneman
System 1 System 2

16. Quick!
A bat and a ball cost
$1.10 in total.
The bat costs $1 more
than the ball. How
much does the ball
cost?

17. Most common answer:
• Bat = $1.00
• Ball = $0.10
Right answer:
• Bat = $1.05
• Ball = $0.05
A bat and a ball cost
$1.10 in total.
The bat costs $1 more
than the ball. How
much does the ball
cost?

18. So why not use system 2 all the time?
• It’s slow
• It’s very energy consuming
• It’s very focused

19. System 2 tasks
consume lots of energy.

20. System 2
is very focused.

21. Irrational biases in
individual decision-making
• Loss aversion
We irrationally try to minimalise our losses.
• Anchoring
Our answer on a question is heavily biased by the
first piece of information offered (the anchor).
• Paradox of choice
Too much choice makes us uncertain.
• Conformity
We adapt our own conviction in order to conform.

22. Daniel Kahneman
Anchoring
Anchoring is a cognitive bias that
describes the common human tendency to rely
too heavily on the first piece of information
offered (the "anchor") when making decisions.

24. • Is the height of the tallest
redwood more or less than
365 meter? Best guess?
• Is the height of the tallest
redwood more or less than
55 meter? Best guess?
Avg. = 257m
Daniel Kahneman
Anchoring
Avg. = 86m

25. • Is the height of the tallest
redwood more or less than
365 meter? Best guess?
• Is the height of the tallest
redwood more or less than
55 meter? Best guess?
Avg. = 257m
Daniel Kahneman
Anchoring
Avg. = 86m
Anchoring index
=
(257-86) /
(365-55)
=
55%

26. Irrational biases in
individual decision-making
• Loss aversion
We irrationally try to minimalise our losses.
• Anchoring
Our answer on a question is heavily biased by the
first piece of information offered (the anchor).
• Paradox of choice
Too much choice makes us uncertain.
• Conformity
We adapt our own conviction in order to conform.

27. Barry Schwartz
The Paradox of Choice
• Psychologist
• Too much choice
makes people
unhappy.
• The Jam
Experiment

29. Barry Schwartz
The Paradox of Choice
6 varieties
available for tasting
All 24 varieties
available for tasting
Stopped at table
40%
Stopped at table
60%
Bought
30%
Bought
3%

30. Barry Schwartz
The Paradox of Choice
The negative effects of too
much choice:
1. Decision paralysis
2. Uncertainty (have I made
the right choice?)

31. Barry Schwartz
The Paradox of Choice

32. Irrational biases in
individual decision-making
• Loss aversion
We irrationally try to minimalise our losses.
• Anchoring
Our answer on a question is heavily biased by the
first piece of information offered (the anchor).
• Paradox of choice
Too much choice makes us uncertain.
• Conformity
We adapt our own conviction in order to conform.

33. Solomon Asch
Conformity experiments

34. Solomon Asch
Conformity experiments
On average
32%
At least once
74%
12 critical trials
Never
26%
Fear of being ridiculed or thought "peculiar".
A few of them said that they really did believe
the group's answers were correct.
Conform %

35. Corpos –
Rotterdam
2002

36. Reli-Rockers
Rotterdam
2006

37. Veggies –
Zürich
2012
http://www.exactitudes.com/

38. Irrational biases in
individual decision-making
• Loss aversion
We irrationally try to minimalise our losses.
• Anchoring
Our answer on a question is heavily biased by the
first piece of information offered (the anchor).
• Paradox of choice
Too much choice makes us uncertain.
• Conformity
We adapt our own conviction in order to conform.

39. ‘You're not a beautiful and
unique snowflake.’
Tyler Durden
The ‘I’ Illusion

40. Irrational biases in individual decision-making
Conclusion
• The human brain’s processing capacity is scarce.
• Our human brain was not developed to process everything
thoroughly. That would take too much energy.
• The human brain was developed to process certain
information thoroughly, and rely on hints and others for all
other information.
• The human brain was developed to work together …

41. Part 2
A ‘We’ species
The Super Social Ape

42. Marilynn Brewer (2004)
Social Psychologist
“… all of the building blocks of human psychology – cognition,
emotion, motivation – have been shaped by the demands of
social interdependence.”
A ‘WE’ Species
The Super Social Ape

43. The Super Social Ape
• Why? The advantages of a social species.
• The ‘generalized other’ determines our self.
• Social pain and self-esteem as regulators.

44. • We’re not suited for
survival as lone
individuals.
• We developed as super
social apes.
• Social is our core
evolutionary strategy.
A ‘WE’ Species
The Super Social Ape

45. Groups > Individuals
• Protection and shelter.
• More mating partners.
• Better organization for hunting larger animals.
• Take and defend a larger territory against predators / other
tribes.
• Develop collective knowledge needed for
– tool making
– hunting tactics
– omnivourness
– …
A ‘WE’ Species
The Super Social Ape

46. Human beings
are designed for group living.
We developed brains and speech to
work together.
A ‘WE’ Species
The Super Social Ape

47. Freud (1856 – 1939)
‘Ich’ is set at birth and never
changes.
The individual is in control.
Mead (1863 – 1931)
The self emerges from social
interactions = the social self.
The ‘generalized other’ has a
major influence on our self.
‘Me’ and ‘I’.
• ‘Me’ is how we believe the
generalized other sees us.
• ‘I’ is how we choose to react.
Social Behaviorism
George Herbert Mead

48. If the ‘generalized other’ is so important in
determining our self …
… how do we control our inclusionary status
with our significant others?
A ‘WE’ Species
The Super Social Ape

49. Self-esteem has long been an
instrument to evaluate an
individual’s self-worth.

50. Sociometer Theory
Mark Leary
Self-esteem as a sociometer
Monitor
inclusionary status
Activatie social pain
Restore
inclusionary status

51. Sociometer Theory
Mark Leary
Self-esteem as a sociometer
A system that continuouly monitors the inclusionary status
of the individual. The system monitors cues that connote
disapproval, rejection or exclusion.

52. Sociometer Theory
Mark Leary
Self-esteem as a sociometer
Monitor
inclusionary status
Activate social pain
Restore
inclusionary status

53. Sociometer Theory
Mark Leary
Social Pain

54. Sociometer Theory
Mark Leary
Social Pain

55. Sociometer Theory
Mark Leary
Self-esteem as a sociometer
Monitor
inclusionary status
Activate social pain
Restore
inclusionary status

56. Cast Away

57. “… all of the building blocks of human
psychology – cognition, emotion,
motivation – have been shaped by the
demands of social interdependence.”

58. There is no ‘I’ in Marketing
1. The ‘I’ illusion: irrational biases in
individual decision-making.
2. The ‘we’ species: a super social ape.

59. Part 3
understanding social behaviour
= understanding consumer behaviour

60. There is no ‘I’ in Marketing
1. The ‘I’ illusion: irrational biases in
individual decision-making.
2. The ‘we’ species: a super social ape.

61. Diffusion of Innovations Model
Everett Rogers
‘Diffusion = the process by which an innovation is
communicated through certain channels over time among the
members of a social system.’
Rogers and Shoemaker, 1971
Chasm

62. ‘Innovativeness is …
… the degree to which an
individual or other unit of
adoption is relatively earlier in
adopting new ideas than other
members of a system’
Rogers and Shoemaker, 1971
… the degree to which an
individual makes innovation
decisions independently of the
communicated experience of
others’
Midgley, 1977

64. We got ourselves a movement !

67. The Innovator
• Authentic = true to their values
OR low susceptability to normative influence
OR low self-monitoring (not conforming)
• Functional risk-taking. What if my investments (in time, resources, health,
…) result in a unwanted result.
• R&D centers of a tribe / social context.
– Domain specialisation.
– Look for specialized information.

69. The Opinion Leader
• Pragmatic = linking opportunities to needs.
High susceptability to normative influence
• Social risk-taking: what if the introduction would proof to be
irrelevant for the social followers.
• Central nervous system of a tribe / social context
– Less domain specialisation.
– Look for socially valuable information.
– Fully aware of the environment of the group.
– Fully aware of relevant trends.

70. We got ourselves a movement !
The innovator
The opinion leader
The early/late majority
The laggards
The tipping point

71. ‘The leader embraces him as an equal.
It’s not about the leader anymore, it’s
now about them’
The Imaginative Innovator
Motivation: follow their gut feeling

72. ‘The first follower is what turns a lone
nut into a leader’
The opinion leader adds social relevance.

73. ‘Three is a crowd and a crowd is news’
Word-of-Mouth spreads the idea

74. ‘This is the tipping point. Now we have
a movement.’
‘The tipping point is that magic moment when
an idea, trend, or social behavior crosses a
threshold, tips, and spreads like wildfire.
Malcolm Gladwell
The Tipping Point

75. ‘As more people join in it’s less risky ...

76. ‘Eventually they will be ridiculed for
not joining in’
The laggard has to join in, in order to avoid
social disapproval.

77. Let’s go back to the time where our social nature was forged.

78. The social group provided a buffer between the individual
organism and the exigencies of the physical environment

79. The social group provided a buffer between the individual
organism and the exigencies of the physical environment

81. SOCIAL ADOPTION MECHANISM

82. ECONS
RATIONAL DECISION-MAKING
‘I’ IS IN CONTROL
DIFFUSION OF INNOVATIONS
HUMANS
IRRATIONAL BIASES
GENERALIZED OTHER
SOCIAL ADOPTION
MECHANISM

83. Part 4
What does this mean for marketing?
1.Your brand
Start with WHY

84. 1. Start with why

85. 1. Start with why
Starting with why makes you
consistent and authentic.
Authenticity is like a quality label
for the opinion leader.
‘Why’ triggers the emotion-
based System 1.

86. Create a world where everyone gets to mingle, and connect
with people of various cultures and backgrounds.

87. Rent rooms.
Create a world where
everyone gets to mingle, and
connect with people of
various cultures and
backgrounds.

88. Part 4
What does this mean for marketing?
2. Communication
Join the Conversation

89. Traditional Advertising:
Stimulate individual behavior
Join the Conversation:
Stimulate social behavior
Join the Conversation
Joseph Jaffe

90. Join the Conversation
The power of word-of-mouth
Nielsen Survey: Global Trust in Advertising and Brand Messages (2012)
Ads on TV:
47%
Ads in magazines:
47%

91. Traditional Advertising:
Stimulate individual behavior
Join the Conversation:
Stimulate social behavior
Join the Conversation
Joseph Jaffe

92. How to stimulate social
interaction about your
brand?
1. Authentic and meaningful
2. The power of opinion leaders
3. Curiosity / Scarcity
4. Unexpected
5. Storytelling
6. Easy to share
Join the Conversation
The power of a crowd

93. Join the Conversation
Authentic and meaningful

94. Join the Conversation
The power of opinion leaders

95. The power of
tastemakers /
opinion leaders.

96. Scarcity /
Confidentiality
increases curiosity.
Curiosity = social value.

97. Red Bull gives you wings
Add surprise / unexpectedness
to your WHY.

98. Storytelling. Give
meaning. Be relevant.
Start the conversation.
Be the conversation.

99. "We used to record demos and then just burn them onto
CDs and give them away at gigs … So the fans just used to
send them to each other, which didn't bother us because we
never made those demos to make money or anything … And
it made the gigs better, because people knew the words and
came and sang along. We can't complain about it."
Make your message
easy to share for early
adopters.

100. How to stimulate social
interaction about your
brand?
1. Authentic and meaningful
2. The power of opinion leaders
3. Curiosity / Scarcity
4. Unexpected
5. Storytelling
6. Easy to share
Join the Conversation
The power of a crowd

101. Part 4
What does this mean for marketing?
3. Co-create.
Open up your brand. Engage your fans.

102. 1988

103. 2015

106. INSIGHT SHOP
CO-CREATION PROCESS
2 3 4
Ideation Concept
finetuning
Concept
workshop
1
Scope
5
Voorstelling
eindresultaat

107. ECONS
RATIONAL DECISION-MAKING
‘I’ IS IN CONTROL
DIFFUSION OF INNOVATIONS
HUMANS
IRRATIONAL BIASES
GENERALIZED OTHER
SOCIAL ADOPTION
MECHANISM
START WITH ‘WHY’
JOIN THE CONVERSATION
CO-CREATE

108. There is no ‘I’ in Marketing