Lecture 1 - Consumer Psychology
Week 46: Introduction: What is Consumer Psychology and How Do We Study it
Iyengar, S. & Lepper, M. (2000). When Choice is Demotivating: Can One Desire Too Much of a Good
Thing? Journal of Personality and Social Psychology, 79 (6), 995-1006.
Experiments: On the course page, I have placed a folder where you can find information on what
experiments are, different types of experiments, and common terminologies used when dealing with
experiments. I highly recommend reading the documents to facilitate understanding of both the
lectures and the required reading material.
Introduction to Consumer Psychology
About Consumer Psychology: Products don’t build brands, consumers do
Not just about the products
In order for your products to take a specific position in the marketplace, you need to understand
what the customers’ needs are that you are trying to meet. People buy products when others use the
products. You as a consumer play a major role in building brands.
What is Consumer Psychology?
In general terms, consumer behavior is a psychologically-based study of how individuals make buying
decisions and what motivates them to make a purchase.
Mix between social psychology and marketing
Several facets of consumer behavior exist, such as:
• How a consumer feels about certain brands, products or services
• What motivates a consumer to pick one product over another and why
• What factors in a consumer’s everyday environment affect buying decisions or brand
perceptions and why
More than just products, also how people engage with different services (such as going to the
dentist, what TV programs to watch, taking aerobics class, going skydiving, donating to a cause etc.)
The use and disposal of products and services
Marketing management decisions are largely based on assumptions regarding the psychology of the
consumer
What drives consumption decisions?
• Emotions
• Financial resources
• Psychological states
• Beliefs
• Environment
Experimental Consumer Research
Experiments: Allows investigators establish cause-and-effect relationships. In other words,
investigators can isolate different effects by manipulating an independent variable, and keeping
other variables constant, to see how it influences a specific outcome variable.
,The Paradox of Choice
The relationship between user happiness and the number of choices
The more choice, the unhappier the consumer
Intuition isn’t always right. Sometimes it is exactly wrong.
In essence, choice overload refers to a cognitive process in which people have a difficult time making
a decision when faced with many options. There are a few reasons for this:
• It becomes more difficult/stressful to determine which option is the best one for you
• As humans, we inherently feel sorrow about the opportunities that we forego
• Moreover, when it’s not clear which option is best for you, you’re more likely to regret the
decision that you eventually do make
Article à When choice is demotivating: can one desire too much of a good thing?
• Study conducted in a supermarket (= field experiment, in the field, not in a lab)
• Research assistants dressed as employees (= confederate)
• Tasting booth (table) with 6 or 24 flavors (= manipulation, Independent Variable IV)
• Observer noted number of consumers who approached the table and consumers
who did not stop and sampled jams (= dependent variable)
• Interested shoppers received a redeemable coupon (= dependent variable)
• Two consecutive Saturdays, displayes rotated hourly and counterbalanced between days (=
attempts to decrease confounding variables!)
Results: more purchases with the 6 flavor stand. Stand with 24 flavors was more attractive.
While a large selection of 24 types of jam initially generated more interest, people were actually far
more likely to purchase a jar of jam from the small display with just 6 choices than from the large
display with 24 choices of jam.
Field Experiment
Field experiments are done in the everyday (i.e. real life) environment of the participants. The
experimenter still manipulates the independent variable, but in a real-life setting.
Strength:
• Behavior in a field experiment is more likely to reflect real life because of its natural setting,
i.e. higher ecological validity than a lab experiment.
• Also, there is less likelihood of demand characteristics affecting the results, as participants
may not know they are being studied. This occurs when the study is covert.
,Limitation:
• There is less control over extraneous variables that might bias the results. This makes it
difficult for another researcher to replicate the study in exactly the same way.
Lab Experiment
Watch movie and choose between 6 or 30 essay topics
DV1: % chose to write the essay
DV2: Quality of the essay
Results: Giving people too much choice is demotivating
What they found in the article: Choice overload can leave you dissatisfied with the
choice you made, what is often described as “buyer’s remorse.” Or it can even lead to behavioral
(choice or decision) paralysis, which is a situation “where people are faced with so many choices that
they can’t decide among them and make no choice at all.”
When are consumers most likely to feel overwhelmed by their options?
• When people don’t have the time and want to make a quick and easy choice
• When the product is complex (so fewer choices help the consumer make a decision)
• When you don’t have any prior information
• When the goal is to purchase as opposed to browse
When dissatisfaction with too much choice becomes likely…
• Choice-set complexity: How are the options organized, is there a dominant option, and what
information is provided about each option? For example, you may have five laptop options to
choose from but see 10 pieces of information about each. Or you may be presented 10
laptop options but only one piece of information about each. The former is a more complex
choice set, and is likelier to result in choice overload.
• Decision-task difficulty: How difficult is the actual act of deciding? Some decisions must be
made quickly, like choosing a meal option from a menu, while others may have much longer
time limits or none at all. The lesser time you have to make a choice the more likely it will
lead to choice overload.
• Preference uncertainty: How much do you already know what you want? The more you
know about your preferences, the easier it is to make a choice. If you have already
established that buying a Fairtrade peanut butter is your most important consideration in
choosing a peanut butter jar, for instance, it will be easy to compare multiple options along
this dimension.
, • Decision goal: Are you buying or browsing? What is the ultimate goal of sifting through all of
these options? If the goal is to make a conclusive choice, that may mean considering trade-
offs carefully and potentially agonizing over a decision. If, alternatively, the goal is just to
gather information that may help with a future decision—such as browsing cars or looking at
potential rental homes—then choice overload may be less likely.
So how can Marketers help reduce choice overload?
• Provide shoppers with a dominant option - ‘Best choice’
• Allow users to compare and return items. Free return is important because of decision regret
by consumers, when choice becomes too much. It gives consumers the peace of mind that
they can return the product and select another one
• Facilitate smart navigation (filters) (example: IKEA sorted items on rooms)
• Use an interactive quiz to guide buyers
Too much choice leads to choice overload (buyers remorse or choice paralysis), if you as a retailer
can’t facilitate consumer decision making process in a sea of choices
Week 46: Introduction: What is Consumer Psychology and How Do We Study it
Iyengar, S. & Lepper, M. (2000). When Choice is Demotivating: Can One Desire Too Much of a Good
Thing? Journal of Personality and Social Psychology, 79 (6), 995-1006.
Experiments: On the course page, I have placed a folder where you can find information on what
experiments are, different types of experiments, and common terminologies used when dealing with
experiments. I highly recommend reading the documents to facilitate understanding of both the
lectures and the required reading material.
Introduction to Consumer Psychology
About Consumer Psychology: Products don’t build brands, consumers do
Not just about the products
In order for your products to take a specific position in the marketplace, you need to understand
what the customers’ needs are that you are trying to meet. People buy products when others use the
products. You as a consumer play a major role in building brands.
What is Consumer Psychology?
In general terms, consumer behavior is a psychologically-based study of how individuals make buying
decisions and what motivates them to make a purchase.
Mix between social psychology and marketing
Several facets of consumer behavior exist, such as:
• How a consumer feels about certain brands, products or services
• What motivates a consumer to pick one product over another and why
• What factors in a consumer’s everyday environment affect buying decisions or brand
perceptions and why
More than just products, also how people engage with different services (such as going to the
dentist, what TV programs to watch, taking aerobics class, going skydiving, donating to a cause etc.)
The use and disposal of products and services
Marketing management decisions are largely based on assumptions regarding the psychology of the
consumer
What drives consumption decisions?
• Emotions
• Financial resources
• Psychological states
• Beliefs
• Environment
Experimental Consumer Research
Experiments: Allows investigators establish cause-and-effect relationships. In other words,
investigators can isolate different effects by manipulating an independent variable, and keeping
other variables constant, to see how it influences a specific outcome variable.
,The Paradox of Choice
The relationship between user happiness and the number of choices
The more choice, the unhappier the consumer
Intuition isn’t always right. Sometimes it is exactly wrong.
In essence, choice overload refers to a cognitive process in which people have a difficult time making
a decision when faced with many options. There are a few reasons for this:
• It becomes more difficult/stressful to determine which option is the best one for you
• As humans, we inherently feel sorrow about the opportunities that we forego
• Moreover, when it’s not clear which option is best for you, you’re more likely to regret the
decision that you eventually do make
Article à When choice is demotivating: can one desire too much of a good thing?
• Study conducted in a supermarket (= field experiment, in the field, not in a lab)
• Research assistants dressed as employees (= confederate)
• Tasting booth (table) with 6 or 24 flavors (= manipulation, Independent Variable IV)
• Observer noted number of consumers who approached the table and consumers
who did not stop and sampled jams (= dependent variable)
• Interested shoppers received a redeemable coupon (= dependent variable)
• Two consecutive Saturdays, displayes rotated hourly and counterbalanced between days (=
attempts to decrease confounding variables!)
Results: more purchases with the 6 flavor stand. Stand with 24 flavors was more attractive.
While a large selection of 24 types of jam initially generated more interest, people were actually far
more likely to purchase a jar of jam from the small display with just 6 choices than from the large
display with 24 choices of jam.
Field Experiment
Field experiments are done in the everyday (i.e. real life) environment of the participants. The
experimenter still manipulates the independent variable, but in a real-life setting.
Strength:
• Behavior in a field experiment is more likely to reflect real life because of its natural setting,
i.e. higher ecological validity than a lab experiment.
• Also, there is less likelihood of demand characteristics affecting the results, as participants
may not know they are being studied. This occurs when the study is covert.
,Limitation:
• There is less control over extraneous variables that might bias the results. This makes it
difficult for another researcher to replicate the study in exactly the same way.
Lab Experiment
Watch movie and choose between 6 or 30 essay topics
DV1: % chose to write the essay
DV2: Quality of the essay
Results: Giving people too much choice is demotivating
What they found in the article: Choice overload can leave you dissatisfied with the
choice you made, what is often described as “buyer’s remorse.” Or it can even lead to behavioral
(choice or decision) paralysis, which is a situation “where people are faced with so many choices that
they can’t decide among them and make no choice at all.”
When are consumers most likely to feel overwhelmed by their options?
• When people don’t have the time and want to make a quick and easy choice
• When the product is complex (so fewer choices help the consumer make a decision)
• When you don’t have any prior information
• When the goal is to purchase as opposed to browse
When dissatisfaction with too much choice becomes likely…
• Choice-set complexity: How are the options organized, is there a dominant option, and what
information is provided about each option? For example, you may have five laptop options to
choose from but see 10 pieces of information about each. Or you may be presented 10
laptop options but only one piece of information about each. The former is a more complex
choice set, and is likelier to result in choice overload.
• Decision-task difficulty: How difficult is the actual act of deciding? Some decisions must be
made quickly, like choosing a meal option from a menu, while others may have much longer
time limits or none at all. The lesser time you have to make a choice the more likely it will
lead to choice overload.
• Preference uncertainty: How much do you already know what you want? The more you
know about your preferences, the easier it is to make a choice. If you have already
established that buying a Fairtrade peanut butter is your most important consideration in
choosing a peanut butter jar, for instance, it will be easy to compare multiple options along
this dimension.
, • Decision goal: Are you buying or browsing? What is the ultimate goal of sifting through all of
these options? If the goal is to make a conclusive choice, that may mean considering trade-
offs carefully and potentially agonizing over a decision. If, alternatively, the goal is just to
gather information that may help with a future decision—such as browsing cars or looking at
potential rental homes—then choice overload may be less likely.
So how can Marketers help reduce choice overload?
• Provide shoppers with a dominant option - ‘Best choice’
• Allow users to compare and return items. Free return is important because of decision regret
by consumers, when choice becomes too much. It gives consumers the peace of mind that
they can return the product and select another one
• Facilitate smart navigation (filters) (example: IKEA sorted items on rooms)
• Use an interactive quiz to guide buyers
Too much choice leads to choice overload (buyers remorse or choice paralysis), if you as a retailer
can’t facilitate consumer decision making process in a sea of choices
