Are Marketers Wary of Cognitive Biases?
Cognitive and Behavioural Psychology expert Dr. Raul Villamarin Rodriguez from Woxsen University talks about how brands can leverage consumer behaviour insights to make informed marketing decisions.
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Consider the anchoring bias – The first piece of information that consumers receive while making decisions, making initial price presentations critical.
“Understanding cognitive biases allows marketers to design more persuasive marketing campaigns and optimise their messaging to align with consumers’ cognitive tendencies,” says Dr. Raul Villamarin Rodriguez, Vice President of Woxsen University and a Cognitive Technologist and Adjunct Professor at Universidad del Externado, Colombia.
Specialising in the convergence of cognitive psychology with cutting-edge technologies, Dr. Rodriguez focuses on areas such as Machine Learning, Deep Learning, Natural Language Processing, Computer Vision, Robotic Process Automation, and Quantum Artificial Intelligence.
We spoke to Dr.Raul about consumer behaviour and cognitive mechanisms that impact consumers’ perceptions of brands and their likelihood to make repeat purchases.
Excerpts from the interview:
What are your thoughts on the psychology of pricing and strategies to maximise profitability in the age of recession?
The psychology of pricing is a complex field that delves into how consumers perceive value and make purchasing decisions. In times of recession, consumers become more price-sensitive and seek perceived value for their money. To maximise profitability, businesses can employ various pricing strategies such as price anchoring, bundling, and dynamic pricing. However, it’s crucial to strike a balance between maintaining profitability and not alienating price-conscious consumers. Additionally, emphasising quality, highlighting cost-saving benefits, and offering flexible payment options can help mitigate the negative effects of a recessionary environment on consumer spending.
How has consumer behaviour and expectations changed in the last few years? What have you observed?
Over the past few years, there has been a noticeable shift in consumer behaviour and expectations, largely influenced by technological advancements and evolving societal norms. Consumers now seek seamless omnichannel experiences, personalised interactions, and ethical and sustainable practices from the brands they engage with. There’s also a growing demand for transparency, authenticity, and social responsibility. Observationally, this manifests in increased scrutiny of brand messaging, heightened awareness of environmental and social issues, and a preference for brands that align with their values.
How should brands leverage consumer behaviour insights to make informed marketing decisions?
Brands can leverage consumer behaviour insights to inform their marketing decisions by conducting thorough market research, analysing consumer data, and utilising advanced analytics tools. By understanding their target audience’s preferences, pain points, and purchasing motivations, brands can tailor their marketing strategies and messaging to resonate more effectively. Moreover, adopting a customer-centric approach and prioritising customer feedback and satisfaction can foster long-term brand loyalty and advocacy.
Also Read: No One Has an Unbiased View of Reality
How can cognitive mechanisms such as memory formation and retrieval impact consumers’ perceptions of brands and their likelihood to make repeat purchases?
Cognitive mechanisms such as memory formation and retrieval play a significant role in shaping consumers’ perceptions of brands and their likelihood to make repeat purchases. Positive experiences with a brand can lead to the formation of strong associative memories, which influence future purchasing decisions and brand loyalty. Conversely, negative experiences can lead to brand avoidance and negative word-of-mouth. Marketers can capitalise on this by creating memorable brand experiences, utilising storytelling techniques, and reinforcing positive brand associations through consistent messaging and imagery.
What are the cognitive biases that marketers should be aware of?
There are several cognitive biases that marketers should be aware of, as these biases can influence consumer decision-making processes. For example, the anchoring bias causes individuals to rely heavily on the first piece of information they receive when making decisions, making initial price presentations critical. The availability heuristic leads people to overestimate the likelihood of events based on their ease of recall, which can be manipulated through strategic advertising and branding efforts. Understanding these biases allows marketers to design more persuasive marketing campaigns and optimise their messaging to align with consumers’ cognitive tendencies.
