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Psychological principles in Brand Marketing

Brand marketing went through a phase where experienced marketers took ‘gut calls’ to create a marketing strategy. Often this meant that the HIPPO (Highest Paid Opinion) was the one that was given priority over others. What seems to be trending today is data-driven decision making. While data is great, there seems to now be plenty of it. It’s often difficult to identify actionable insights from these mountains of data. Data alone is not sufficient. It’s important to be able to look for patterns and likely behavioral correlation within the heaps of data. Psychology helps look for likely patterns in data based general human behavior. So, let’s look at some key principles of Psychology applied in Brand Management along with some examples from FMCG Marketing.

1) The Paradox of choice

Have you ever found yourself comparing myriad insurance schemes, comparing them and not being able to decide which one to go with? You might have had a similar experience shopping for clothes. Let’s look at the FMCG sector. While browsing through multiple options of ice-cream have you ever thought, that probably consuming an ice-cream itself is not a great choice?

The paradox of choice states that beyond a certain point, consumers are often confused by multiple choices and the effort involved in decision making. This leaves them dissatisfied with the purchase experience which further results in lowering the likelihood of purchase.

The Paradox of choice mostly applies to a brand with a large set of sub-brands in the same category. These are often near monopolies or market leaders, with an objective to grow the category size and not to focus on market share. The phenomenon is more prominent in super-market format or self-service outlets where the shopper sees a variety of options. This is one of the reasons cigarettes as a category is not as much impacted by this paradox because the category is mostly sold over the counter in India. Amul, a near monopolistic brand in the butter category does well with this paradox with a limited range of options, by introducing new variants only when there is a genuine need.

2) The counter to the paradox of choice is the Strategy of Anchoring also known as The Decoy effect. Consider this example – Amazon, like many other subscription services, provides a few options to the user. This is done, not to confuse the user but rather to show the comparative benefit of the option that Amazon wants users to choose.

In the FMCG space if you know of this brand, SafeWash, by Wipro consumer Ltd., you would almost always see it available on offer. The shopper sees the MRP as the reference point for value and hence considers the offer stock to be of a much greater value. Of course they overplayed their hand and have got to a stage where the consumer expects it to be always on offer, but the strategy worked for a while.

3) Social proof is also known as the bandwagon effect or ‘Group think”. This is basically a cognitive hack. We tend to trust the popular opinion so that we don’t have to make the effort of doing the analysis ourselves. Hence people tend to prefer brands that are already trusted by millions. What consumers do not notice, is that in a country like India, a few million is quite a small number and hence there are way more people rejecting the brand than accepting it. Nonetheless this principle of psychology usually works unless it’s repugnant to the fundamental need state of the category. For example, social proof would be a really bad trigger on a category like fashion-apparel, where the need state is to stand out. What works there is The Scarcity effect. But before we get to that here is an example of a smart phone brand leveraging this principle.

4) The Scarcity effect: The scarcity effect works on the principle that we always want what we can’t have. It’s a popular technique used by lifestyle brands (apparels and accessories) to draw attention and boost demand. A popular clothing brand in the US, Supreme, almost completely operates based on this principle. They’ve mastered the art of using social media to hype the launch of a new line with a limited no. of units. More common examples include, travel portals always showing “Just 3 seats/rooms left” at the time of browsing for flights or hotels. The scarcity effect can also be used in FMCG marketing with offers and LEVs (Limited Edition Variants). I’ve myself launched a few LEVs while working on the juices category at an FMCG major, however here is a more popular example.

5) The Expert Bias: Let’s say you want to sell large volumes of your product and you aren’t a clear market leader. Unfortunately, there isn’t a demonstrable difference between your product and the rest either. You can’t outspend the competition in advertising for obvious reasons. So, is there a psychological principle for you to leverage, in order to build your brand? FMCG marketers are faced with this challenge more often than not. Using The Expert Bias is one of the ways out. As humans we can count more of things we do not know than things we know. Hence we tend to trust experts in a particular field to avoid making mistakes in our choices. A famous example of leveraging this bias, is the standard template of advertising that Colgate follows. There are many undifferentiated brands competing in the toothpaste category but Colgate has probably been the most successful.

P.S: It’s not a difficult claim to make. There are over a lakh dentists in India and one can make this claim by having 150 out of 200 randomly chosen dentists across the country.

6) Reciprocity: Have you ever sat through your relatives trying to force marriage down your throat because they were nice to you when you were a kid? If yes, you understand the human desire to reciprocate. We’re almost hard-wired to return favors. It’s rare to find examples of this in FMCG Brand Marketing. However, a more commonly seen example is seen in the form of content marketing. When a brand shares valuable content for free with the audience, the audience is likely to reciprocate with love for the brand. J&J has for long been a trusted brand among mothers. A large part of the success can be attributed to priming new mothers, early in their journey through Of course in 2019 J&J sold the website on undisclosed terms. Since then J&J has also faced multiple litigations on its flagship baby talcum powder to the extent that the product was discontinued in 2020. However, it’s apparent that the brand continues to leverage the platform.

7) In-group preference bias is the human behavior of forming groups and assigning themselves group identities. Historically group identities include ethnicity, political ideologies, religious beliefs, and geographical identities. As marketing evolved brand managers also started leveraging this principle of psychology. When Mountain Dew as brand says- Dar kea age jeet hai, there is no specific benefit that it’s trying to communicate. The brand is instead, trying to appeal to your preference to be a part of the group of people shown in the TV commercial, led by a celebrity. The same is the approach with Cadbury dark milk chocolate-The Grown up chocolate.

8) Commitment bias: People make choices which seem consistent with their earlier, especially in public. Inconsistency is seen as unpredictability and hence frowned upon. This principle applies both to consumers and to brands. Here is an example from a shopper’s perspective. Have you ever said yes to, would like to try a free sample, of product you didn’t want to buy? Have you then said yes to the question, did you like the sample? If you’ve said yes twice then it’s quite likely you’re going to stay consistent with your answer when asked, would you like to buy said product. This principle is also at play when you make a small commitment of Rs.1 while adding a sample of a product to your basket before check-out. You’re now more likely to buy the product next time. Brands also need to be consistent in their positioning in order to seem trust worthy. Therefore when Dove talks about ‘real beauty’ it doubles down on it, by showing regular women in their commercials.

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