1. As you enter the room…
Please pick up both the article and the notes sheet from the podium
Take out your “What Psychologists Do” packet

2. Consumer Psychology

3. What is it?
The study of consumers and the processes they use to select, secure, use, and dispose of goods and the impact that these processes have on the consumer.
In other words, studying people who buy stuff and why they choose what they do.

4. How is consumer Psychology applied?
To make us better consumers
Making you aware of marketing tricks can save you from making financial errors
You can make smart, low(er) cost purchases

5. How is consumer Psychology applied?
Marketing strategy
By understanding that consumers are more receptive to certain types of advertising, companies can spend their marketing budget more effectively
Ex. Consumers are more receptive to food advertising when they are hungry so snack advertisements are most often played in the late afternoon

6. How is consumer Psychology applied?
Public Policy
At times, it is necessary to use marketing techniques to help the general publics
Think about seeing public service or health commercials
Anti-smoking commercials
Graphic images to deter behaviors

7. How is consumer Psychology applied?
Social Marketing
This is all about getting ideas across to consumers instead of selling something
Ex. It is bad to share needles

8. Examples of applications?

9. Color

10. Fewer options (in a way)
If you give people too many options, they often choose none because they slip into “analysis paralysis.”
That’s where you can take advantage of the process known as “chunking.”
Instead of telling people “here’s all of my stuff,” you say, “here are 5 categories of stuff.” Pick which category is right for you, then pick the item in that category that’s right for you.
Look at it like a Supermarket. When you walk into the store, you know there’s a deli, a fruit/vegetables area, a meat area, a dairy area, and so on. In each little section, there’s thousands of products to choose from. But they make the decision easy on you by “chunking” them into similar categories.

11. Price Anchoring
Restaurants use price anchoring to subconsciously encourage diners to buy more expensive items.
Take a look at the menu below and notice the $145 seafood plate. William Poundstone claims "By putting high-profit items next to the extremely expensive anchor, they seem cheap by comparison. So, the triple-figure price here is probably to induce customers to go for the {$95} Le Grand plate to the left of it, or the more modest seafood orders below it.

12. Re-Framing Value
When it comes to larger purchases, we all struggle in evaluating value. Ecommerce merchants have a way to entice buyers into purchasing more expensive options based on that knowledge.
One easy way to do this is to re-frame the product's value. This strategy eases the buying pain for everybody, but especially for tightwad customers.
If, for instance, I tried to sell you on my product that costs $1,000 a year, you'd be a bit hesitant right? That's because $1,000 isn't peanuts, and it's a large enough number that it makes you hesitant to buy, even if the offering is very valuable to you.
Now what if I offered a service for $84/month? It's a lot easier to gauge how much value you'd get out of that. If you can justify 30 days worth of value for $84, the purchase seems like a no-brainer. The thing is, $84 a month is $1,000 a year!

13. Re-framing value Used car dealers
Only $999 down, but it’s a $10,000 car
Only $90/month, for 60 months plus taxes and interest will be over $6500

14. Others?
Closeouts
Time limits