If you think you make purchases because you logically and objectively evaluate the options at hand, then decide based strictly on your personal preferences and individual sense of value, think again. Here are four examples of how consumers make purchasing decisions in highly irrational, sometimes completely nonsensical ways.
Our preferences are shaped by the masses. Food tastes good (or bad) based on the sensations it causes in your mouth and belly, right? To some extent, absolutely. But marketing experts know that consumer preferences are also shaped based on the taste of our peers, and on social norms and cultural trends. This goes for most consumer choices, including fashion, technology, cars—and yes, even food.
A recent Washington Post column uses the example of clam chowder, which was briny and thin throughout New England decades ago, and which is now almost uniformly super thick—and, some detractors say, as tasty as Elmer’s glue. What happened? At some point, restaurateurs got in the habit of adding flour to make chowder thicker and thicker, and now this is what consumers have come to expect constitutes a bowl of “authentic” clam chowder. If a diner ordered clam chowder today and received a bowl filled with the thinner version commonly served a generation ago, it wouldn’t match one’s expectations, and therefore probably wouldn’t taste “good.”
Sometimes, it’s hard to figure out whether companies try to make products that suit the preferences of consumers, or whether consumer preferences are shaped by the products made by companies. Consumer preferences can and do change: For example, it was assumed that Americans liked weak coffee—and then along came Starbucks. Consumers had assumed wine served in screw-top bottles was inferior—until suddenly they were so ubiquitous and acceptable (and easier to open) that many wine lovers came to prefer them.
The point is that individual consumer preferences are often shaped not entirely by the individual, but by the collective preferences of the masses, and by the status quo in the marketplace. Despite the overwhelming number of products on store shelves, and despite how the typical consumer would say he likes having as many options as possible, consumer preferences are often shaped by conformity. As a result, it’s common for competing products to be remarkable similar to one another, as one expect told the Washington Post:
“There are huge incentives in consumer markets even for competing companies to make everything the same,” says Dan McGinn, president of the McGinn Group, a research and strategy consultancy in Arlington.
A New Yorker story about the edible insect trend, meanwhile, delves into how consumer taste is shaped simply by the local expectations and norms:
Food preferences are highly local, often irrational, and defining: a Frenchman is a frog because he considers their legs food and the person who calls him one does not. In Santa María Atzompa, a community in Oaxaca where grasshoppers toasted with garlic, chile, and lime are a favorite treat, locals have traditionally found shrimp repulsive. “They would say ‘some people’ eat it, meaning ‘the coastal people,’ ” Ramona Pérez, an anthropologist at San Diego State University, says. When she made scampi for a family there, she told me, they were appalled; the mother, who usually cooked with her, refused to help, and the daughters wouldn’t eat. The coast is less than a hundred miles away.
We assume higher price equates to better quality. While many retailers have gotten in the habit of marking prices down to attract shoppers in recent years, a New York Times story pointed out that luxury goods stores have been succeeding lately at least partially because they have rarely if ever been discounting merchandise. The customer these stores aim to attract is one who would probably think: If that suit or handbag is on sale or had to be marked down, it must be out of fashion, or not be that good quality. As the story sums up:
Part of the demand is also driven by the snob factor: at luxury stores, higher prices are often considered a mark of quality.
Of course, higher prices aren’t necessarily a mark of better quality. They’re just numbers that retailers place on shoes and belts. They’re numbers that retailers hope consumers never question. What an item is “worth,” on the other hand, is an entirely subjective matter determined by the consumer who eagerly snatches the item up or walks away, thinking “What a rip-off!”
We shy away from cheaper options for no good reason. In the same way that some consumers choose items mainly because they’re expensive, others equate cheap (as in: price) with cheap (as in: poor quality). A forthcoming study in the Journal of Marketing Research authored by Columbia Business School professor Sheena Iyengar and others show that consumers often steer clear of less expensive options when good quality is highly important for the purchase at hand. (Specifically, the researchers use dark chocolate and wine as examples.)
This makes sense of course—if you’re aiming for top quality, why not go with the best—but what makes less sense is that the range of choices had a large influence on the purchasing decisions of participants in the experiments. One group was shown five chocolates, the other 21, and the chocolates were supposedly arranged in order of quality rating. Participants were then asked how much they’d pay for a high-quality chocolate from the selection at hand. The consumers shown 21 chocolates were prepared to pay 40% more than the folks shown just five chocolates.
In another experiment, participants were asked to select among three different price groupings of Sauvignon Blancs: cheap, average, and expensive. Without tasting anything, only 25% of participants selected a wine in the least expensive category. Why? Perhaps because they’ve disliked cheaper white wines they’ve had in the past. But let’s be honest: It’s probably because few people want to look cheap. Restaurants know this well, and that’s why the second-cheapest bottle on a wine list often has the biggest markup.
Dumb marketing tricks still do the trick. There’s no shortage of ways retailers manipulate consumers into buying stuff they don’t want and paying more than they need to. A Consumerist post pointed out one of the oldest and most common tricks, which must still work because you see it everywhere you shop. We speak of the bizarre power of numbers ending in a 9:
A national woman’s clothing catalog tried something out a few year ago. With one group of customers, they took one of their dresses and raised the price from $34 to to $39. Sales shot up 25%. With the second group of customers, they raised the price from $34 to $44. There was no change in demand.
The other old pricing trick with a 9 involves listing an item ending in .99—a T-shirt for $9.99, so that the customer reads it as $9 rather than what it really is: a penny shy of $10. But you’re too smart to fall for that, right?