Anchoring and Consumer Decision Making

Digital creativity blog by Flow Bohl, 21.3.2010

How much are you willing to pay for a pint of Stella down the local? How much for a glass of Grüner Veltliner white wine? Unless you are wine connoisseur, answering the latter would be a bit more tricky. Why? Because you either don't care about white wine and/or you don't have a benchmark to compare with.

This aspect of comparison is known as 'anchoring' and has been explored in behavioral economics predominantly by Nobel Price winner Daniel Kahneman.

Subliminal Anchoring

Comparison to a given context, norm or standard is one of the most striking characteristics in consumer decision making. The anchoring effect is referred to as the assimilation of a numeric estimate towards a previously considered standard. Anchoring has been observed in a broad area of judgmental domains such as knowledge questions, price comparison, estimates of self efficiency, gambling, legal judgment and business negotiation.

In a study conducted by Mussweiler and Englich subliminal anchoring was examined. This type of anchoring assumes that even when no direct anchors are provided for comparison, exposure of numbers outside a given context can subconsciously influence judgment. A judge may be unaware of these anchors.

The participants of the study were asked to think about the average mean temperature in Germany and while they were given one minute to think about the answer, a high or low anchor was subliminally primed. As expected did the subliminal anchor presentation yield the standard anchoring effect, it influenced target estimates. Participants who were exposed to high subliminal anchors gave a higher estimate of the average mean temperature in Germany, whilst the opposite was the case for subjects exposed to low subliminal anchors.

Mussweiler and Englich's findings demonstrate that anchoring effects are more ubiquitous than is assumed by prior research (mainly by Daniel Kahneman and Amos Tversky).

Anchoring in Advertising and Brand Positioning

In advertising anchoring can subconsciously guide prospects or consumers in making a decision. A brand and it's perceived value always depends to what the brand can be compared with. Therefore the anchoring effect has a significant impact on brand-positioning.

Anchoring Campaigns

Consumers wanting to compare led to the vast success of comparison web sites (and the downfall for most overpriced services). Most popular example is 'Compare the Meerkat' by VCCP for the BLG Group.

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