The Effect of Expectations

The primary lesson from “Predictably Irrational” by Dan Ariely is that expectations about a product or experience can have a greater impact on consumer satisfaction than the product or experience themselves. Consumers form expectations that can overcome reality when they receive information about a product before they test it. These expectations can be based on product reviews, appearances, and descriptions, as long as they are introduced before the consumer experiences the product.

Understanding how consumers form expectations can be a key insight into creating products for our customers. Whether you’re designing the packaging or writing the product descriptions, it is important to make the product look and sound appealing in order to influence their purchase decision and their evaluation of the product.

For example, I begin enjoying any Apple brand product before I even finish opening the package. All of their products are well designed, easy to open, and packed very efficiently. The packaging indicates to me that I bought a valuable product and will be satisfied with my purchase. Before I even use the product, Apple has created a valuable experience.

The main example that Ariely provides in his explanation is how consumers are influenced by the knowledge that vinegar has been added into beer during a taste-test. Without knowing about the vinegar, most of the test subjects prefer the altered beer. However, if they hear the description before they taste the altered beer and regular beer, they will be much more likely to choose the regular beer because they form an expectation that overrides their experience.

This test could also be performed to compare generic products to brand-name products. You could have a group that participated in a blind comparison and judged which product was more effective, and another group who is told which one is the generic product before they judge which product was more effective. Customers might prefer paying a premium price for a brand name product because it has fancier packaging or they have brand loyalty. This test would be effective at testing the strength of consumers biases for certain product categories and the impact of product packaging.

As we discussed “True Colors” by Malcolm Gladwell in class, it was mentioned that some products, like at home hair color, are worth paying a premium for because they have a permanent effect on your daily appearance and self-esteem. However, products like over-the-counter medicine and basic beauty products are typically made from the same formula and ingredients, and medicines have to pass the same standards set by the FDA as name-brand products. So unless you’re planning on testing a product like hair color that could have a long-term effect, this experiment could produce very interesting results. I would assume that the knowledge of the generic brand might have the “vinegar effect” seen in Ariely’s beer test.

My Top 10 List for Marketers:

1. Splurge for Products that Simplify
While living away from my parents for the past few years, I’ve developed my own routines for cooking and cleaning. For instance, unlike my parents, I am willing to pay more for items like Swiffer brand disposable cleaning products than investing in a reusable mop and broom. Disposable products are convenient because they are easier to use and don’t require any post-clean-up time.

2. Multi-Tasking is the Key
Throughout the day, I constantly find myself multi-tasking. Whether it’s walking to class and talking on the phone/checking emails or watching TV/listening to music while I’m doing homework at night, I’m always splitting my concentration between multiple tasks. For this reason, products like the iPhone appeal to me because they make multi-tasking easy and enjoyable.

3. Packaging is Important
Whether it makes a product easy to use, like stay-fresh containers, or is just appealing, like all Apple products, packaging is definitely important. I’m attracted to products with packaging that is both functional and easy on the eyes. Packaging should be descriptive without being overwhelming, and should give you a clear picture of what is inside the box.

4. One-Stop Shopping
Rather than going to both a grocery store and a store, I would much rather go to a super-store where I can get everything I need at one place. I am even willing to pay more for products in exchange for the convenience of buying everything in one location.

5. Clutter-Free Store Layouts
I enjoy shopping at stores that are organized and shopper-friendly. I notice that I’ll spend more time in stores that have wider aisles and thoughtful layouts than in stores with cluttered aisles. For instance, I would much rather go to Target than Wal-Mart, because I feel like Target stores have less commotion and have a more welcoming design.

6. Online Shopping
I am an avid online shopper. Whether I’m buying clothes, electronics, or household items, I enjoy shopping online because I appreciate being able to see more of a selection than usually found in a store. I’m also the type to fall for promotions like free shipping once you spend a certain amount.

7. Generic Products
Even though I am willing to spend more money for convenience, I am always looking for great deals and ways to save money. That is why I am always more apt to buy a generic product than a name brand. Target does a great job of promoting their generic brand, Up&Up, by placing similar products right next to the name brand product, and in familiar packaging.

8. Coupons
Speaking of saving money, I am also the type to collect and use coupons I receive. For example, I’ve recently begun receiving coupons at Target that are printed with my receipt. These seem to be targeted coupons, offering discounts for the generic version of items that I’ve recently purchased.

9. Online Advertisements vs. TV Advertisements
Since the invention of TIVO, I seldom watch commercials on TV. I see more advertisements on social websites or while watching TV shows online.

10. Trying New Products
I’m more willing to try a new product if it is offered free for a limited time with a more familiar product or if I can go online to print off a coupon. Since you are taking a chance when buying a new product, discounts and promotions eliminate some of the risk.

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Testing out the new blog!