The complexity of determining the selling price of a product makes manufacturers determine a decoy effect marketing strategy . The aim is to influence customer decisions, while increasing product sales figures. So, what is the decoy effect and how does it work? Check out the following article for further explanation!
What is the Decoy Effect?
The decoy effect is a clever marketing strategy that uses the third option as bait to influence consumers' perceptions of the first option. Therefore, the decoy effect marketing strategy is also known as a decoy strategy.
When using this strategy, sellers will present additional product options that are actually less popular or less profitable for consumers. However, the product is still offered to make the main choice look more attractive.
The main goal of the decoy effect is to help consumers make better decisions by providing a clear comparison between available options. Apart from that, this method is also used for the benefit of sellers in increasing sales
The application of the decoy effect is actually very familiar to most consumers. Sellers present a third option as a bait between one or two main products they want to promote. The third option tends to be unequal to the other two options in terms of price.
So, this third option is used as bait to change consumer perceptions because they see the price of the main option looks more profitable. This strategy is often used by restaurants or cafes that offer various menu sizes by playing with the price difference between products.
How Does the Decoy Effect Work?
The way the decoy effect works is by offering different price options for the same product in different quantities. This offer will usually also be followed by persuasion to encourage consumers to buy the product options offered.
An example is the sale of cinema tickets which are available in two types of tickets:
- Regular tickets cost IDR 50,000.
- Premium tickets (free popcorn ) cost IDR 100,000.
Seeing the significant difference in prices and benefits , customers tend to prefer regular tickets with much cheaper prices, according to their needs.
If the company decides to use the decoy effect to influence customer choices, then the types of cinema tickets offered will be like this:
- Regular tickets cost IDR 50,000.
- Premium ticket (without popcorn ) IDR 75,000.
- Premium ticket (free popcorn ) IDR 100,000.
The second option is included as bait to make consumers think that the second option is a liability option. The third option, namely tickets with popcorn suddenly looks more profitable. Most people will choose premium tickets with free popcorn because they feel they are getting more value with a small price difference.
So, the decoy effect works by manipulating perceived value and influencing consumer thinking. In the world of marketing, this strategy is often used to increase sales of certain products or services by directing consumers to the desired options.
How to Implement the Decoy Effect Strategy?
Implementing this clever marketing strategy can be done in the following steps.
- Product or Service Identification
Identify the type of product or service you want to promote or increase sales. Choose a product or service that has several options for consumers to choose from so they can compare for themselves which one is more attractive and profitable.
- Make Unattractive Decoy Choices
The option that will be used as bait must be an option that is less attractive or less profitable than the main option that you want to promote. For example, if you want to promote package A at a price of Rp. 50,000, make bait with package B which has less attractive features, but with slightly different or even the same price.
- Focus Attention on Top Choices .
The next way to apply the decoy effect is to emphasize the main choice you want to promote. Provide clear information and provide comparisons by highlighting the main options so that they look more attractive. Consumers will also feel helped because they think that the seller has made it easier for them to make purchasing decisions.
- Observe the Results
After applying the decoy effect, pay attention to how customers react to the choices offered. Is there an increase in purchases or interest in the main choices you are promoting or is consumer purchasing power not as expected? Then, evaluate the results to find out whether this method is suitable for application in your business.
Please remember that the decoy effect must be used with ethics and transparency. It is recommended not to display decoy options that have the potential to deceive consumers. Applying the decoy effect wisely will be able to influence consumer decisions and increase product or service sales in businesses.
The right marketing strategy will not only increase product sales, but also customer satisfaction. To find out what strategy is suitable for your business, you can involve a third party such as a business consultant to reduce the risk of errors and increase the success of your business strategy.
You can consult on various business obstacles and problems with MBN Consulting. Apart from that, you can also enjoy other conveniences in managing your business with financial, tax and legal reporting services to increase business effectiveness and accelerate substantial and sustainable business transitions.
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