Lecture Notes: Marketing and Perception

Introduction

• Speaker: Rory Southerland, Vice Chairman of Aug UK
• Importance of psychology over rational improvements in marketing.
• Stories as vehicles for information sharing.

Key Concepts

Perceptual Value

• Value can be created in the mind, not just in physical products.
• Importance of storytelling, framing, and recontextualization in adding value.
• Example: Eurostar - focus on making the journey enjoyable rather than faster.

Psychological Moonshots

• Easier to achieve than technological moonshots.
• Example: Uber Map - reduces uncertainty and stress in waiting for taxis.
• Example: Vegan leather in Tesla - a reframing of plastic seats.

The Ikea Effect

• Effort involved in a product increases perceived value.
• Example: IKEA - assembling furniture yourself adds value.
• Example: Betty Crocker cakes - adding an egg made the product feel more like cooking.

Trust and Consumer Behavior

• Uncertainty affects consumer stress and satisfaction.
• Example: Knowledge required for London cab drivers creates trust.
• Example: Cheap vs. pick-your-own strawberries - narrative affects perception.

Counter Signaling

• Demonstrating you don't have to try hard can increase status.
• Example: Wearing casual clothes as a status play.
• Importance in marketing and personal branding.

Marketing Principles

Creating Value in Perception

• Use psychology to improve how people feel about a product.
• Example: Red Bull - high price and distinctive taste create a perception of value.
• Magic in perception can be achieved through clever marketing.

Product Presentation

• Packaging and delivery affect perceived value.
• Limited availability and storytelling enhance product appeal.
• Example: Apple's scarcity in product presentation.

Personalization and Trust

• Personalized experiences can enhance consumer satisfaction if done correctly.
• Importance of cultural sensitivity in personalization.

Challenges and Opportunities

Importance of Customer Service

• Removal of negatives is crucial in enhancing customer experience.
• Example: Providing phone support and delivery options.

Investment in Brand vs. Performance Marketing

• Balance between brand advertising and performance marketing is crucial.
• Brand advertising builds loyalty and customer lifetime value.

Environmental and Social Impact

• Marketing can help in achieving environmentally friendly value creation.
• Example: Electric cars as a status symbol for environmental consciousness.

Conclusion

• Embrace storytelling and perception in marketing strategies.
• Understand the complex psychological factors affecting consumer behavior.
• Continual adaptation and innovation are key in a changing market.