Marketing Planning: How do users make choices?

The greatest value of this article is to establish a multi-faceted understanding of brain cognition and know the real reasons behind behavior. Marketing is also the study of people. Knowing the logic behind people’s behavioral decisions is a good entry point for marketing planning .

Before I start, let me tell you two stories:

Story 1: A research institute wanted to know whether different ways of presenting the same question would affect people's final choice, so they went to Bronte Beach and asked tourists two questions.

Question 1: Do you think you can live on 70% of your current income in retirement?

More than 70% of people chose yes, and they explained:

Back then I wouldn't have spent as much money as I do now.

I won't be doing much after I retire, so I won't need that much cash.

I would maintain a good lifestyle based on my expenses at that time.

Question 2: Do you think you can live on retirement expenses by deducting 30% of your current income?

This time, on the contrary, more than 70% of people chose no. Their answers were:

How am I going to survive after deducting 30% of my income?

There is absolutely no way I can continue living my current lifestyle.

I need everything I have now.

Story 2: Researchers found that the organ donation rate in Germany and Austria was 12% Vs 100%. It was also found that the organ donation rates in Denmark and Sweden were 4% vs 86%. Some people would say that their cultures are different, but in fact, Germans and Austrians share the same language and culture. Sweden originally belonged to Denmark, but later became independent, and the culture is the same. So what causes such a big difference in their organ donation rates? Later the researchers discovered that they had asked the organ donation questionnaire differently.

The survey questions for Germany and Denmark were:

（）If you are willing to participate in organ donation, please tick here

The survey questions for Austria and Sweden were:

() If you do not wish to participate in the organ donation program, please tick here

The same question, asked in different ways, will lead to very different results. Do you still feel that you are making your own decisions when you make choices? Next, we will analyze who is making decisions for us when we make choices from three aspects: the brain's operating mechanism, the brain's bias, and the brain's behavioral motivation.

How the brain works

Even when faced with the same problem, people's final choices will be different depending on the way the problem is expressed. This is called the "framing effect." Framework policies help people make better choices, but they are often biased. So why does the brain produce bias? Let’s start with how the brain works.

First, how does the brain make decisions?

System 1: Unconscious and fast, not requiring much thinking, without feeling, and completely under autonomous control.

System 2: Rational, logic-based, processes information subconsciously; it is slow and calculating.

Our brains often rely on obvious surface information and simple and effective strategy evaluation information to make decisions, using the intuitive judgment system, that is, System 1, to reduce cognitive burden. We have always believed that the brain is rational and makes judgments based on reason. But in fact the brain is a miser and will be lazy whenever it can.

In the case of organ donation, people are unwilling to check even one more box. Also, in our daily lives, do we suddenly remember whether we have locked the door after going out? But in fact the door was locked, it was just that our brain did it automatically without thinking, so we can't remember it. More than 60% of our behaviors in life are habitual behaviors and do not use brain resources.

The brain only accounts for 2% of body weight, but consumes 20% of energy. So resources are limited, and the brain will be lazy if it can. Now you have learned a new way to lose weight without exercising, haha.

Secondly, people naturally don’t like to lose. The discomfort of losing one hundred yuan is more intense than the pleasure of gaining one hundred yuan. In psychology, there is a phenomenon called "endowment effect", which means that once a person owns an item, his evaluation of the value of the item will be greatly increased compared to before he owned it. This phenomenon can be explained by the "loss aversion" theory in behavioral finance, which holds that a certain amount of loss will reduce people's utility more than the same amount of gain will increase their utility. Therefore, people's weighing of benefits and harms in the decision-making process is unbalanced, and their consideration of "avoiding harm" is far greater than their consideration of "seeking benefit". Out of loss aversion, people often overprice used items when selling them.

Why doesn't the brain like losses? Because the living environment of human ancestors was not as safe as it is now. If they lost one day's food, they might starve to death, and one more day's food would not necessarily mean one could live one more day, and food could not be preserved for too long. Therefore, loss aversion is engraved in our genes, just like a person who has never seen a snake will feel fear when he sees it for the first time.

Finally, how do ideas influence our behavior?

When people establish a belief or idea, in the process of collecting and analyzing information, they will develop a tendency to look for evidence to support this belief, which will constantly strengthen this belief and guide our behavior.

When faced with uncertain events, we tend to make judgments or predictions based on their similarity to past experience. So each of us has our own unique experiences, learning experiences, and cultural environment that influence our perspectives. For example, most American consumers prefer to consume products that can show their unique personality, while most Chinese consumers prefer to consume products that can make them stand out in the group.

Therefore, different concepts influence people to make different choices when facing the same thing, and the results of the choices will change our brains, which will make us continue to deepen our inherent concepts, stay in our comfort zone and be unwilling to change.

Bias in the brain

Because of the unique operating characteristics of the brain, it is most susceptible to bias. How does prejudice arise? I will explain it in detail from the following three points:

1. In order to save resources, the brain uses system 1 to deal with problems first, and only turns to system 2 if that doesn't work. System 1 is unconscious and fast, does not require much thinking, has no feelings, and is completely under autonomous control. Therefore, we make many decisions without consciously considering them.

Mark Twain said, " Most people lack the ability to think independently and do not like to construct their own opinions through learning and self-reflection. However, they can't wait to know what their neighbors are thinking and then blindly follow the crowd." By following the crowd, we can reduce the amount of thinking in our brains, and we will not be unique or excluded by the crowd. In the early days of human beings, it was impossible to survive alone without the group.

Because the brain likes to be lazy, it likes to use System 1 to make decisions. So when we are faced with choices, we should not be so anxious to make decisions. Think about it after the brain gives the answer. Slow work will lead to success.

2. The brain's aversion to loss will make us make blind choices when facing the risk of loss. Just like the first case at the beginning, when asked about losing 30% of income, almost everyone chose no, but losing 30% of income and only having 70% of income actually mean the same thing.

The brain has a natural aversion to losses, which can cause the brain to focus only on short-term benefits and ignore long-term development when making decisions, thus creating bias and making wrong choices. When you think about how many unnecessary items you have bought because of limited-time sales at stores, you will realize how blind our brains are. Next time you encounter such a situation, you can think, "You are trying to trick my brain with loss aversion again. I won't be fooled again!"

3. How do concepts lead to the formation of bias in the brain? In psychology, there is an effect called "focusing bias". There are three types of biases:

Bias caused by focusing on action: When we focus on doing one thing, it is easy to see the trees but not the forest.

Bias caused by focusing on the scene: Because you and the bystander are in different scenes and positions, there will be differences in the analysis of your status.

Self-focused bias: Overestimating our contribution to the group also exaggerates our feelings.

People are easily influenced by their own ideas and beliefs and focus too much on something, thus developing bias. As the old saying goes, "Those involved in the matter are confused, while those who are on the sidelines can see clearly." So when facing things, look at things from other people's perspectives first to avoid preconceived biases in your brain.

Background knowledge determines whether you can see things that others cannot see, so another way to avoid this kind of bias is to improve our background knowledge through more personal experience and reading.

To sum up, our brains are easily biased because of the desire to save resources, the aversion to loss, and the focus on inherent ideas. We can never see the truth of the world, but only see the world we want to see. And once prejudice is established it is difficult to erase.

The brain's motivations for behavior

Motivation is the process that guides our behavior and occurs when a need that we wish to satisfy is activated. Once a need is activated, there is a tension that drives us to alleviate and eliminate it. This state of tension is emotion, and we are driven by emotions to perform certain actions. The greater the emotion, the greater the motivation for behavior.

Image source: Baidu Gallery

So when we make decisions, we are actually driven by emotions, because without emotions and preferences, people cannot make decisions. There was once a man who was in a car accident and caused his emotional brain to be damaged. He could no longer have emotions and could only think rationally. Even if he listed all the pros and cons of two things, he was unable to make a choice. This shows that people cannot make decisions without emotions.

Motivation is strongly influenced by emotions, which is why advertising and marketing campaigns focus on evoking our emotions and moods, and on establishing a connection between products and services and emotions. The ultimate goal of the brain is to achieve a balance between internal cognition and external stimuli, so when the outside world arouses our emotions, it drives us to act. Regardless of whether the behavior is reasonable or not, the brain will explain all unreasonable behaviors to achieve balance.

98% of brain activity is not conscious; the brain makes decisions before the information enters consciousness. This is also why the repeated brainwashing advertisements in elevators make us hate them, but they are effective. For example, Pinduoduo’s brainwash songs make us disgusted, but it is very likely that you hum them unconsciously when you go to the bathroom.

Although we need the help of emotions to make choices for us, many times our emotions will be deceived by our own biases and exploited by businesses. So don't rush to make decisions when emotions arise. It is easy for us to make wrong and impulsive decisions when we are impulsive.

To sum up

Our choices have complex behavioral mechanisms. Most of our decisions are made unconsciously, which has a lot to do with emotions, environment and impulse. Let’s start with three characteristics of the brain:

1. The brain loves to be lazy. We are used to using System 1 to make choices, and System 1 is intuitive thinking and tends to follow the crowd blindly.

2. The brain hates losses. When faced with losses, it tends to prefer risks and engage in many irrational behaviors.

3. The brain’s inherent beliefs and concepts will cause us to focus too much on our existing concepts and beliefs, and the behaviors caused by these concepts will reinforce our concepts and beliefs. Create prejudice and stubbornness.

These brain characteristics cause us to make different choices when faced with different ways of presenting the same problem, which is the framing effect.

For ordinary people like us, knowing the decision-making mechanism of the brain can help us avoid being blind and impulsive when making choices. For marketers, understanding customer behavioral characteristics is the key to future corporate competition success.

Source: Marketing Flights ( YXHB18 )