1 / 32

Qual’s Secret Weapon: Behavioral Economics in Practice

Qual’s Secret Weapon: Behavioral Economics in Practice. Presented to QRCA So. Cal. Chapter November 30, 2012 Jay Zaltzman Bureau West Market Research Los Angeles, California, USA Tel: +1-818-588-6050 Email: jay@bureauwest.com. Asking direct questions.

milton
Download Presentation

Qual’s Secret Weapon: Behavioral Economics in Practice

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Qual’s Secret Weapon: Behavioral Economics in Practice Presented to QRCA So. Cal. Chapter November 30, 2012 Jay Zaltzman Bureau West Market Research Los Angeles, California, USA Tel: +1-818-588-6050 Email: jay@bureauwest.com Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 1

  2. 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. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 2

  3. 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. • Dan Ariely says: while people are irrational, they’re predictably irrational. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 3

  4. 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 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 4

  5. 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. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 5

  6. 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 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 6

  7. 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… Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 7

  8. 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). Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 8

  9. 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. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 9

  10. 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…) Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 10

  11. 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. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 11

  12. 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. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 12

  13. Understanding customers’ relationship with… • Direct questioning: • “How do you feel about X?” • “Why is it important to you?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 13

  14. 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. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 14

  15. 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?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 15

  16. 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 Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 16

  17. 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… Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 17

  18. 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.” • Or… • “Write a love letter to the brand…” • Or… • Provide a wastebasket and ask what participants would throw away from the brand and what they’d keep from the brand. Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 18

  19. 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…” • “And this statement…” • “And this statement…” • “Which statement works best? Why do you say that?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 19

  20. 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!) Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 20

  21. 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?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 21

  22. Where is the brand in the competitive field? • Perceptual map: • (Based on attributes defined earlier) • “Where is X on this map?” • “Where are the competitors?” (one at a time) • And don’t forget: • “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?” Higher Less More Lower Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 22

  23. 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?’” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 23

  24. 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.) Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 24

  25. Evaluating a new product • Direct questioning: • “Do you like this product? Why do you say that?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 25

  26. 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: ____________________ ____________________ ____________________ ____________________ ____________________ 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.” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 26

  27. Evaluating a new product • “Imagine yourself using the product.” • “What would change?” • “How would it fit in to your routine?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 27

  28. Evaluating designs, logos • Direct questioning: • “What does this communicate to you?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 28

  29. 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: • Take a large printout of the logo and cut it up into a puzzle. Slowly put it all together piece by piece and have them evaluate each part. Higher Less More Lower Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 29

  30. 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?” Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 30

  31. Many other options • Examples? • Use your creativity. Consider: • Context • Emotions • And feel free to contact me. (That’s part of what I love about the QRCA – the way we can utilize each other!) Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 31

  32. 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 email if you'd like to receive it. Just email info@bureauwest.com and write “newsletter” in the subject line Bureau West ▪ Market Research & Marketing Strategy ▪ Los Angeles, CA ▪ tel: (818) 588-6050, email: info@bureauwest.com 32

More Related