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Monday, April 20, 2015

Framing effect and marketing communications

In the last blog post on heuristic biases in decision making, we discussed about representativeness heuristic. Today let's understand how we can make use of another such heuristics in our communications - Framing effect.
The ‘‘framing effect’’ is observed when the description of options in terms of gains (positive frame) rather than losses (negative frame) elicits systematically different choices (The framing effect and risky decisions: Examining cognitive functions with fMRI, Cleotilde Gonzalez, Jason Dana, Hideya Koshino, Marcel Just). Framing effect is one of the aspects that fundamentally question the ‘Rationality’ school of thought.

It proves that emotions can help play a role in decision-making when information is incomplete or too complex, to serve as at times critical rules of thumb . Once again we can see very interesting applications of framing effect in marketing, selling and organizational behavior. Few of the examples are
We prefer ‘The product is 95% fat free’ to ‘The product consists of 5% fat’
A take-away restaurant offers a free home delivery or a ten per cent discount if you pick up rather than No discount for picking up and suffer a ten per cent fee for delivery.
Another application of framing effect that I have seen is by managers in performance appraisal meetings or an entrepreneur pitching to an investor. Starting with a positive frame primes the audience to be more receptive to the presenter. Framing effects are also widely used in politics especially when it comes to creating buzzwords or sophisticated sounding terms. An example from wikipedia article -
Recent popularization of the term "escalation" to describe an increase in American troop-levels in Iraq. This implies that the United States has deliberately increased the scope of conflict in a provocative manner. It alsoimply that U.S. strategy entails a long-term military presence in Iraq,whereas "surge" framing implies a powerful but brief, transitory increase in intensity.
As part of an experiment, I asked three paired questions that are somewhat relevant in my day-to-day work. While writing marketing messages for our products, we take utmost care in the usage of words. Hence one of the questions I asked was to choose between Software automation reduces testing time by 5% and Software automation reduces testing time to 95%. We make use of this in most of our marketing collateral when writing about results or customer quotes. As expected majority of the respondents choose the second option (60%).
Some of the other questions in the survey and associated results are
Which sounds better?
90% of manufactured units meet quality requirements with the adoption of ISO 9000:2011 [95.7%]
10% of manufactured units don’t meet quality requirements despite the adoption of ISO 9000:2011 [4.3%]
Which sounds better?
Save 1 rupee in buying a mango [30.6%]
Save 12 rupees in buying a dozen of mangoes [69.4%]


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