Not Deciding Before Seeing a Bigger and Expensive One When There is a Smaller and Cheaper One: Decoy Effect

It is a behavioral mechanic that we encounter a lot in daily life.

How could such a thought have arisen?

When a company called Williams Sonoma, which produces home appliances, produced its first bread baking machine, no one paid much attention. Of course, there will not be much interest in the product, which is offered for approximately 300 dollars. People’s reactions to the product are similar. “Why is there a need for such a device?” Wouldn’t it make sense to buy a more useful home appliance instead of paying this money for such a product? Of course the people were right. The bread machine was a mystery. The fact that no one bought the product led the company to decide to withdraw this innovative machine from the market. They were not wrong in this decision.

The company’s anxious managers turn to a marketing consultant as a last resort. The consultant who examined the product offers the company a strange suggestion: manufacture a bread machine larger than this machine and offer it for sale for 450 dollars!

the machine in question

Williams-Sonoma executives laugh at this strange suggestion. Why would customers who do not buy small and cheap ones buy larger and more expensive ones? Although the suggestion is strange, it is accepted by the company and a larger and more expensive machine is introduced to the market. There are now two bread machines in the windows. One is small and cheap, the other is large and expensive.

The company’s sales suddenly begin to increase. People no longer ask what to do with this strange device, they buy one. When the company examines the sales chart, it encounters a strange situation. No one bought the big machine recommended by the marketing consultant. Everyone is turning to the small machine. okay but why?

Irrational people want to compare a product when buying it. They couldn’t do this when the bread machine was first introduced to the market. Now they had two models to compare with, and when making their decision, they thought: “Even though I don’t have much information about the bread machine, I think it will be more rational to buy the cheaper one!”

This is called the decoy effect.

By Mehmet Özkoç

Hi readers. I am from Turkey, I am one of the founders of the site. We opened the Adsenses site to provide information to our readers from all over the world. Stay tuned.

Leave a Reply

Your email address will not be published. Required fields are marked *