Psychology of Marketing

Topics: Maslow's hierarchy of needs, Psychology, Abraham Maslow Pages: 11 (3957 words) Published: November 14, 2013

How does human psychology affect consumer decision-making
and how can marketers use that to their advantage?

An extended essay submitted
in partial fulfillment
of the requirements for IB

Table of Contents

Abstract 1
Essay 2-13
Works Cited 14-16

The psychology of marketing is one of the most popularly researched studies today. It’s advantageous for marketers and advertisers to understand human psychology and how that affects consumer decision-making, so that they can use those discoveries tot heir advantage by adapting their products and the way they market and advertise their products in order to attract the desired consumers and to be successful. And in most cases, having the knowledge of what works to get a consumer to buy a product is easily applicable. However, there is a conundrum for marketers when it comes to basing their products off of the psychological choices that consumers make, especially in regards to the amount of choices marketers promote. On one hand, consumers like to have plenty of choices and varieties of a product in front of them because they are more likely to get exactly what they want if there’s more to choose from. However, having too many choices can sometimes be stressful, giving a buyer psychological doubt about the choice he or she made, and sometimes shoppers are less likely to buy a product at all when there is an excess of choice because they can’t decide. Too many options can also lead to settling, in turn leading to dissatisfaction with a product. So how is a marketer to decide which one is better, more choices or less? Both have pros and cons, so a marketer has to consider the psychology of consumers, the basis of decision-making, the effects of advertising, self- control failure and its causes, Maslow’s hierarchy of needs and which level consumers fall into, the targeted age group for a product, and especially when that targeted age group is children. If marketers consider these factors and recognize the psychology of consumers, then they can adapt their marketing strategies and their products to attract their target consumers in hopes of becoming successful. As the US economy has been in a recession since 2007, it’s become ever more important for both small and large businesses to figure out ways to keep their business successful. Arguably the most effective strategy is to recognize and then utilize the psychology of marketing. This essay will explore how human psychology affects consumer decision-making and how marketers can use those discoveries to their advantage. Before evaluating why a consumer makes a choice, marketers and researches first need to understand how consumers, and everyone for that matter, psychologically make choices. Amos Tversky and Daniel Kahneman were among the greatest influences into the investigation and discoveries of the psychology of choice, as their findings are some of the most influential framework of decision making and psychology of choice that have allowed market researchers to have insight to the reasoning behind consumer choices. Tversky and Kahneman define a “decision problem” as “the acts or options among which one must choose, the possible outcomes or consequences of these acts, and the contingencies or conditional probabilities that relate outcomes to acts,” and the “decision frame” as the “decision-maker’s conception of the acts, outcomes, and contingencies associated with a particular choice.” (Tversky, Kahneman) With these definitions in mind, Tversky and Kahneman explain that there are two stages in the process of choosing; first is deciding the decision frame, and second is evaluating the parts of the decision frame. Although Tversky and Kahneman’s theories are complicated, involving extensive equations, it’s important to consider the basics of human choice before marketers consider how they can affect consumer...

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