Issue 6 of The Psychology of Pricing
On any given regular day, people are constantly faced with different products and brands. Even before trying a new product, customers can develop an idea of what that brand will be like. Researchers have found that these brand associations can affect consumers’ actual experience with products: If they expect an experience to be good, it’s more likely that they actually experience it as good.
For example, have you ever talked with a friend about whether Pepsi or Coke is better, resulting in a blind tasting to see if you can really tell the difference? It turns out that we often get similar products mixed up when labels are removed. One study found that Coke drinkers in an fMRI study gave lower ratings to Coke if they drank it from a cup with no label rather than from a cup bearing the Coke logo. (1)
Expectations drive our responses, and this even happens to animals (2). Knowing this, managing expectations becomes of key importance to successfully design your product. Customers often make up their mind about your product before even trying it, and if expectations aren’t managed, you won’t get far.
Even if you get a hesitant customer to try your product (say, a meal), expectations have the power to influence their actual experience, including how much food they eat and how much they like it. (3) If people expect a meal to be fantastic, they will pay more attention during the meal, pausing to notice the different flavors and how well they complement each other. Now, can we take a disgusting meal and have people expect it to be wonderful and then as a consequence actually experience it as wonderful? No. This is too much to expect from the power of expectations. But can we take something good and make it better? Absolutely.
So what does all this mean for how you should design your product?
- Consumer expectations of a product powerfully influence the inferences they make about quality and what they should pay for something.
- As a product designer or marketer, you can help set these expectations before they try or buy your product.
- Packaging can be a signifier of quality that influences consumer decisions. The more exclusive the packaging, the more beneficial it feels like the product should be.
Use your next dinner party to run a mini-experiment on the power of expectations. Serve two similarly priced bottles of the same variety of wine, mentioning that one is an expensive present you have been saving for a special occasion. See if your guests enjoy the “special” bottle more!
(1) McClure, Samuel M., Jian Li, Damon Tomlin, Kim S. Cypert, Latané M. Montague, and P. Read Montague (2004). “Neural correlates of behavioral preference for culturally familiar drinks.” Neuron, 44, 379-387.
(3) Wansink, B. (2004). Environmental factors that increase the food intake and consumption volume of unknowing consumers. Annu. Rev. Nutr, 24, 455-479.