Example: How a High Anchor Point Improves Sales
Posted: Sun Dec 22, 2024 4:23 am
How to apply it
Let's say you sell graphics cards on your website and you want to promote sales of the 'NVIDEA GT150'. It would be a good idea to compare the GT150 with two other products. For example, the 'GTX150 Ti' which has a star rating and a competitor product such as the 'AMD Radeon RX550'.
GTX150 Ti is a 'star' product from the same brand as GT150 in a slightly higher price range, and Radeon RX550 is a graphics card from another brand in the same price range. By comparing with GTX150 Ti, GT150 is rated higher than Radeon RX550.
Anchoring
Anchoring is a well-known psychological phenomenon that shows that we attach too much value to the first form of information obtained. The first form of information is our 'anchor' that strongly influences the second form of information. In making decisions, our anchor plays a major role in relation to subsequent judgments.
A good example that shows that an anchor influences our buying behavior is the example of a jeweler who saw his sales increase after a small adjustment (from: Influence by Robert Cialdini). This jeweler usually placed his offers at the front of the store. He thought he could entice his visitors with a good deal. However, sales in his store were disappointing. Until he spoke to a friend of his who is a psychologist. He advised him not to place the best offer at the front, but one of his more expensive pieces of jewelry. The result was a strong increase in sales. The idea behind this is that visitors have a high anchor point immediately upon entering. The other pieces of jewelry in the store are therefore relatively much cheaper and were therefore better evaluated and sold better than if they had a lower anchor point.
Why copycats often don't work
Copycat brands exploit the reputation of premium brands. These premium brands invest a lot of money and take big risks to build the brand, which copycats try to piggyback on. But copycat brands are not free of risks either. Marketing literature emphasizes the dangers of copycats. Research by Van Horen and Pieters (2012) shows that indonesia mobile number list copycats that are very similar to the premium brand, and can be directly compared to it, are poorly rated.
Copycat brands that are very similar to the premium brand are rated better if they cannot be directly compared to the premium brand. Copycats are therefore rated better if you do not directly link them to the premium brand. That is why a copycat of Starbucks works better in a country where there are hardly any Starbucks stores than in the heart of Manhattan.
How to apply it
As a copycat brand, it is therefore important to map out how similar it is to the premium brand, also in comparison to other copycat brands. Depending on this, you must choose whether you want to position the brand in a way that it can be compared to the premium brand. Coca-Cola is a brand that has many copycats and is found in many supermarkets. Since products are located close to each other in supermarkets, it is easy to compare them directly. A strategy that supermarkets can apply with regard to copycats is to position the copycat brands with the most similarity the furthest away from Coca-Cola, in order to avoid comparison as much as possible. So do you offer both the premium brand and the copycat brand? Then try to avoid comparison as much as possible.
Let's say you sell graphics cards on your website and you want to promote sales of the 'NVIDEA GT150'. It would be a good idea to compare the GT150 with two other products. For example, the 'GTX150 Ti' which has a star rating and a competitor product such as the 'AMD Radeon RX550'.
GTX150 Ti is a 'star' product from the same brand as GT150 in a slightly higher price range, and Radeon RX550 is a graphics card from another brand in the same price range. By comparing with GTX150 Ti, GT150 is rated higher than Radeon RX550.
Anchoring
Anchoring is a well-known psychological phenomenon that shows that we attach too much value to the first form of information obtained. The first form of information is our 'anchor' that strongly influences the second form of information. In making decisions, our anchor plays a major role in relation to subsequent judgments.
A good example that shows that an anchor influences our buying behavior is the example of a jeweler who saw his sales increase after a small adjustment (from: Influence by Robert Cialdini). This jeweler usually placed his offers at the front of the store. He thought he could entice his visitors with a good deal. However, sales in his store were disappointing. Until he spoke to a friend of his who is a psychologist. He advised him not to place the best offer at the front, but one of his more expensive pieces of jewelry. The result was a strong increase in sales. The idea behind this is that visitors have a high anchor point immediately upon entering. The other pieces of jewelry in the store are therefore relatively much cheaper and were therefore better evaluated and sold better than if they had a lower anchor point.
Why copycats often don't work
Copycat brands exploit the reputation of premium brands. These premium brands invest a lot of money and take big risks to build the brand, which copycats try to piggyback on. But copycat brands are not free of risks either. Marketing literature emphasizes the dangers of copycats. Research by Van Horen and Pieters (2012) shows that indonesia mobile number list copycats that are very similar to the premium brand, and can be directly compared to it, are poorly rated.
Copycat brands that are very similar to the premium brand are rated better if they cannot be directly compared to the premium brand. Copycats are therefore rated better if you do not directly link them to the premium brand. That is why a copycat of Starbucks works better in a country where there are hardly any Starbucks stores than in the heart of Manhattan.
How to apply it
As a copycat brand, it is therefore important to map out how similar it is to the premium brand, also in comparison to other copycat brands. Depending on this, you must choose whether you want to position the brand in a way that it can be compared to the premium brand. Coca-Cola is a brand that has many copycats and is found in many supermarkets. Since products are located close to each other in supermarkets, it is easy to compare them directly. A strategy that supermarkets can apply with regard to copycats is to position the copycat brands with the most similarity the furthest away from Coca-Cola, in order to avoid comparison as much as possible. So do you offer both the premium brand and the copycat brand? Then try to avoid comparison as much as possible.