What is In-group Bias? How Does In-group Bias Apply to Marketing?

Also Known As: In-group favoritism, in-group–out-group bias, or intergroup bias Definition: In-group bias occurs when customers favor people who belong to a certain group that others are not a part of, the out-group members. In-group bias Examples: Facebook Groups. Communities can be valuable assets for companies. Putting time into building or joining a tribe leads to….

What is In-group Bias? How Does In-group Bias Apply to Marketing?
What is the Mere Exposure Effect? How Does Mere Exposure Effect Apply to Marketing?

What is the Mere Exposure Effect? How Does Mere Exposure Effect Apply to Marketing?

Also Known As: The familiarity principle Definition: The mere-exposure effect happens when customers have a preference for something, simply because they are familiar with it. Mere Exposure Effect Examples: Advertising. The mere exposure effect is the basis of branding and advertising. Research has been mixed on the effect of mere exposure positively or negatively affecting….

What is Reverse Psychology? How Does Reverse Psychology Apply to Marketing?

Definition: Reverse psychology is a process to promote a belief or behavior that causes an opposite reaction you desire a customer to have. This is more likely to happen when a person has a negative emotional reaction to being persuaded. Reverse Psychology Examples: Selectivity. Using reverse psychology, you can motivate potential customers to take action….

What is Reverse Psychology? How Does Reverse Psychology Apply to Marketing?
What are Extrinsic Rewards? How do Extrinsic Rewards Apply to Marketing?

What are Extrinsic Rewards? How do Extrinsic Rewards Apply to Marketing?

Also Known As: positive reinforcement, conditioned rewards, external rewards, extrinsic motivation Definition: An extrinsic reward is a physical reward given to someone for doing a task. Extrinsic rewards are valuable ways to motivate new customers who have yet to try a new experience. Extrinsic Rewards Examples: Loyalty Programs. Loyalty programs have become a mainstream marketing….

What is the Endowment Effect? How Does the Endowment Effect Apply to Marketing?

Also Known As: Divestiture Aversion, Mere Ownership Effect Definition: People value objects simply because they own them. In fact, people tend to pay more to keep something they own than to obtain something new of equal value they do not own. Endowment Effect Examples: NCAA Tickets. Professors Dan Ariely and Ziv Carmon ran a study….

What is the Endowment Effect? How Does the Endowment Effect Apply to Marketing?
What is Confirmation Bias? How Does Confirmation Bias Apply to Marketing?

What is Confirmation Bias? How Does Confirmation Bias Apply to Marketing?

Also Known As: Confirmatory Bias, Myside Bias, and Observational Selection Definition: A bias to search for, interpret, and favor information that confirms one’s current beliefs or hypotheses. Confirmation Bias Examples: Testing The Hypothesis: Sometimes, not-so-smart marketers run tests to prove what they believe should work. This is okay. But if they do not continue testing,….

What is the Barnum Effect? How Does the Barnum Effect Apply to Marketing?

Also Known As: The Forer Effect Definition: People give higher accuracy ratings to descriptions that fit their personality, even if the descriptions can apply to a wide range of people. Barnum Effect Examples: Validate Your Customer. Do you enjoy being liked by others? So do your customers. Jif peanut butter likes to affirm choosy moms…..

What is the Barnum Effect? How Does the Barnum Effect Apply to Marketing?
What is the Bandwagon Effect? How Does the Bandwagon Effect Apply to Marketing?

What is the Bandwagon Effect? How Does the Bandwagon Effect Apply to Marketing?

Also Known As: Bandwagoning, the effect of fads and trends Definition: People are more likely to accept ideas and trends when they are made aware that more people use that product or service. Bandwagon Effect Examples: Improving Amazon and eBay Listings: Many marketplace sites like Amazon and eBay use the bandwagon effect as a signal….

What is Availability Heuristic? How Does The Availability Heuristic Apply to Marketing?

Definition: A mental shortcut that assumes a product or an idea that comes to mind fast is more important than an idea that is not recalled as fast. This leads to a bias towards new news over timeless truths. Availability Heuristic Examples: Vivid Stories and Hyped Media: A dull and boring event may be more….

What is Availability Heuristic? How Does The Availability Heuristic Apply to Marketing?
What is the Anchoring Bias? How Does the Anchoring Bias Apply to Marketing?

What is the Anchoring Bias? How Does the Anchoring Bias Apply to Marketing?

Also Known As: Focalism, Anchoring Effect, Anchoring Heuristic Definition: A bias that relies on the first piece of information received when making decisions, called “the anchor.” Once an anchor is set, new information is based around the anchor. The first number you see changes your perception of any numbers that come after it. Anchoring Bias….