Samuel Raccah

Richard Sasson
Ziv Rottman

Group Project
Example 1
On its website, under Hours and Admission, the New York Metropolitan Museum of
Art lists a series of recommended prices, which is based on age and occupation. The
meaning of the word recommended is intentionally ambiguous and its doubtfulness is
increased by the following word associated to it - fees. The policy of the Museum behind
it is very simple: every visitor is not obliged to pay the recommended fee, and can
arbitrarily choose the amount of money he/she wants to donate to the Museum. However,
rather than implementing an automatic mechanism, the purchasing system requires the
interaction between the cashier and the visitor. Furthermore, according to a recent AP
article, the Museum's ticket cashiers are trained to be vague about the entry fee for
General Admission and will just try to charge you the full amount. This deliberate
behavior is aimed to maximize ticket revenues. The reason and the assumptions that led
the Museum to adopt this strategy rather than a usual and tradition fixed price policy are
as follows:
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Social Proof - Every customer who wants to visit the Museum has the trivial

perception that the entry is free, but the interaction with the cashier and the very high
likelihood that every customer before and after him will donate the nominal value leads
the visitor to act in the same manner. Both the physiological sense of affinity with our
similar and the Darwinian competition between human beings in terms of richness, affect
the behavior of the visitor, thus leading him to donate the suggested amount. This sample
shows two transverse application of the Social Proof principle. First, customers tend to
imitate people who are similar to them (the acceptation of similar is situation
dependent and in this case, every visitor is similar to another visitor) even if the vast

majority agrees on the unfairness of this policy. Second, people tend not to diverge from
the common sense in order not to alter the status quo
-

Reciprocity - Every visitor is aware of the service provided by the Museum and

consequently, what it takes to maintain the Museum. According to this uneven

relationship between visitors and the Museum itself, consumers perceive a sense of
obligation towards the Museum, which contributes to donating the suggested amount.
This idea derives from the ancient Latin principle do ut des, which states that people are
more likely to give something when they receive something back. In this sense, the term
donation acquires a different meaning because its no more an endowment but rather a
settlement. Reciprocity can also be a barrier to exit in microeconomic terms: it indeed
represents a social obligation that doesnt allows consumers to avoid the deposit of
money once they decided to visit the museum.
-

Anchoring: the word recommended plays a significant role in approaching

consumers to donate the suggested goal of $25 per visitor. During its initial phase, the
Museum decided to implement a free - donation policy. As a result people donated on
average, a lower amount of money because the value they attributed to their visit was
lower than the Museum expectations. Several studies demonstrated that people tend to
pursue the expected goal when suggested, which is why the Museum changed its policy
and guided visitors to a desired amount; resulting in aligning visitors behavior to the
Museums expectations.
Overall, this misleading strategy received several negatives reviews both from visitors
and from famous newspaper. To cite just two of them:
The Met does not have a fixed fee for admission, but it has encouraged donations with
suggested fees since 1970. Prominent signs at each ticket booth feature bold pricing
schemes with the word recommended in a smaller, italicized font. Last year, the Met
was sued, and pilloried in the press, for these admission practices, which were seen as
misleading: Many visitors, especially those unfamiliar with the donation scheme,
understand the fees to be mandatory. - The New Yorker

I myself experienced this when I first came to NYC, and it was very unpleasant. Now I
live here and know better. For the aforementioned reason, I give this place 4 stars instead
of 5. -TripAdvisor
Example 2
In 2007, Coca Cola decided to launch a new type of Coke - Coca Cola Zero. At that time,
the only variation from the original Coke was Diet Coke. However, the sales of the Light
version never reached an acceptable level and always represented a marginal share in the
Coca Cola Company. There were two reasons behind the failure of the Light edition:
-

Misogynous consumers: the vast majority of Coca Cola drinkers are males, and

the term light was associated to a female target because of the heritage of the word diet.
Even if there was no skepticism about its reduced level of sugars and calories, males felt
their virility compromised when they drank the light version and therefore, preferred to
maintain their social status by drinking regular Coke.
-

Emotional attachment to the original Coke: many consumers didnt want to try the

new version because of their fidelity to the traditional taste. The differences in the
ingredients conferred to the light version a perceived difference in the taste that was
much more pronounced than its real impact. The social addiction distorted the sensorial
perception, which led to a mere success in terms of consumers adoptions.
In order to solve these two problems, Coca Cola decided to launch a new product. The
commercialization of the new product had several advantages: while people felt they
already knew the brand Coca Cola, a new product was devoid of any social prejudice think about the scenario Black&Deker faced - and yet the brand Coca Cola made it
somehow familiar. A new tabula rasa was ready to be written: consumers who knew the
light version were more complicated to be persuaded, whereas new consumers had no
regret and their initial perception about the new product could be easily directed towards
the desired vision. Besides, the new advertising campaign aimed to promote Coca Cola
Zero was gender-targeted; satisfying both the Social Proof and the Liking principle:
males consumers didnt feel their manhood compromised anymore because the

publicized image related to the new product was intentionally profiled for males: TV
commercials always represented male figures drinking the Cola while actresses
appreciated their gesture. This campaign was a marketing example of how aversion to a
certain product can be alleviated by inserting the product in the proper context with
similar consumers. Furthermore, another core value that Coca Cola Zero achieved was to
promote no substantial difference in taste from the original Coke. This goal was
accomplished by reversing the Context-Effect: many advertisements showed consumers
drinking Coke from a traditional cup of Coca Cola without perceiving any dissimilarity.
However, the cup contained Coca Cola Zero and not the traditional one, and when the
experiment was explained, consumers felt surprised by the similarity between the two
variances. Being aware of the Context-Effect principle, Coca Cola tried to annihilate its
influence in consumers preferences and promoted the new product as a male-oriented
Cola with the same taste of the original one. Coca Cola Zero: great Coke taste, zero
sugar
Nowadays Coca Cola commercializes three different Cokes: Coca Cola, Coca Cola Zero
and Coca Cola Light, each one targeting different consumers in different and somewhat
complementary contexts (in some cases, cannibalism between two products occurred).
Example 3
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https://www.youtube.com/watch?v=eubWYPhcEEo

Whenever we try reaching out to consumers and influence their buying habits, thinking
process, and decision making we need to target their system 1, which is also known as
their guts, rather than system 2, which is the mind. Targeting consumers mind and
influencing them in a rational manner had proven to be less efficient than aiming at a
much deeper level. Therefore, most companies who advertise, target its customers
emotions.
In the Anti-Drunk Driving Commercial by Budweiser, the marketing team clearly went
for system 1. It took something everyone love a puppy and showed how we its
owners - is all he got. The commercial established the relationship between the owner and

his puppy from the day he could barely walk. Then, several years later, when the owner is
eligible to drink, we are told that whenever we leave the house, our dogs simply wait and
wait for our return. However, in some cases we never do; and they (the dogs) will never
understand the reason why. All they will know is that the most important thing in their
life is gone because YOU chose to drink and drive. The commercial ends with the relief
that we made the right choice and decided to stay the night and NOT drink and drive. The
emotional part in this commercial is when the owner opens the door, while his dog sits
and waits for him all night long not knowing whether he will return or not. However, the
moment the door opens, the dogs excitement from seeing his owner is what should
influence us, the viewers when making the decision of drinking and driving.
Example 4
In 2004, when Nokia was the undisputed leader in the cellular phones industry, it decided
to amaze its consumers with an innovative product: the Nokia 7200. At that time Nokia
was able to produce different types of products encompassing every sort of consumers.
Resulting in a market share larger than any other competitor and brand identity, which
included different targets in different segments. This competitive advantage allowed
Nokia to create a unique product, relying on a sizable share of customers desirous to
purchase it. The Nokia 7200 had two peculiarities: (1) only 7200 units were produced,
and (2) it was the first Nokia Phone to have a shell design. The perception of its
exclusivity was increased by two factors: a quantitative factor that reduced the chances of
owning it, and a qualitative factor that raised the palatability of owning it. It was both a
limited edition and a special edition. Furthermore, the price was an extension of its
distinctiveness: it was sold for more than $500 and at that time $500 was the threshold
attributed by the vast majority of consumers to their budget for a phone (nowadays it has
dramatically increased and it can be assumed to be $700). The purpose of the Brand was
to create a status symbol people might identify with: it was not only a phone, it possessed
a series of features that created an experience rather than an object. It had a leather case,
cutting edge technological specifications, and it was the first and only shell-designed
Nokia phone. This combination of added value and perceived distinctions are an example

of the Scarcity principle: things become more desirable if you know that their
accessibility is limited.
However, one of the major dilemmas related to the commercialization of this product was
why Nokia wanted to sell a restricted number of phones, which will reduce its potential
revenues. The answer to this question is connected to the Halo effect: the overall
perception of a brand can be influenced by a singular detail that changes the total
perspective. For example, several studies demonstrated that the iPod positively
influenced the image of Apple when it was launched. Similarly, the Nokia 7200 was
aimed to increase and enhance the appearance of Nokia that was involved in both hightech and low-tech phones, and the last category could damage the performances in the
high-tech field. Therefore, an advanced and appealing phone could boost Nokias sales,
improve its brand identity, and spread the idea of a leading firm developing disruptive
technologies and restraining prices.

Example 5
The social proof principle is a concept connected to marketing strategies.
It consists of doing something recognized as socially acceptable only because a large
group of people perceives it as such. It is all about the mass, the community.
Marketing is taking advantage of this mechanism, which regulates the dynamics and
leverages the collective consciousness.
Implementing this in the everyday life is fairly easy: you simply look at how people
behave around you in order to avoid potential social gaffes.

The mechanism mentioned can be seen in the animal world as well. One clear example is
when animals are uncertain whether or not to cross a river. Researches suggest that they
will get together in large groups and then cross the river, which increases their chances of
survival. This mechanism also resides in the human psyche.
A concrete practice of the principle mentioned, is in the web. Given the so-called infocommerce, the average user now turns to the web in order to find out more information.
Do you want to book a restaurant or a hotel? Check the reviews on TripAdvisor, Airbnb
or Booking.com and choose the one with the highest score.
Do you need to buy an item on Ebay? It is likely that you will tend to buy from sellers
who have a consistent number of sales in addition to several positive feedbacks.
In short, everything the customer want is reassurance. That's why most companies
websites present its customer testimonials on in its landing page.
This technique plays two factors: first, it pushes the buyer to purchase the item/service;
and second, it aims to make the reader feel as if he/she are the only one who did not try
the new product or service, triggering a feeling of inadequacy given the fact that many
other customers (before him) already tested the novelty successfully.
Basically, it uses the sense of belonging to a group or a community. The customer can fill
the gap with a simple and impulsive click.

Example 6
-

https://www.youtube.com/watch?v=CIbwrwWDXfc

https://www.youtube.com/watch?v=GXru4Q7Lgxo

A great tool that is applied all around us when trying to influence consumers buying
habits is liking. This tool simply means that consumers are more likely to purchase a
product, or use a service that someone we know and like is also using.
A great example of this tool can be seen in the Nespresso commercial where Nespresso
chose George Clooney as its face in all its commercials and paid him an exceptional
amount of $40 million to do so. The reason is simple many people know and LIKE
George Clooney. People often want to look like someone they like, they want to wear the
same clothes as them, and drink the same drinks they do. Nespresso obliviously knew
that and wanted to take advantage of that. If Clooney drinks Nespresso coffee, millions
others will follow and drink it as well. In the commercial, the marketing team took a
situation, which is not really that important, but the fact that Clooney participates as the
main character is what makes the difference. This is the reason Nespresso did several
different variations of this commercial, all relating the same general idea be like George
Clooney and choose Nespresso.
In some cases, Nespresso chose another tool to increase its sales scarcity. It made a
special edition capsule and priced it at a significant higher price than its regular capsules.
This concept works on the notion of scarcity by putting pressure on us the consumers to
purchase this luxury item before it runs out of stock. By simply adding the work limited
edition, or limited supply it is able to create the feel of urgency in its consumers minds.
Example 7
-

https://www.youtube.com/watch?v=AcNK7M2eCI4

In the movie World War Z, a lethal virus attacks the entire world except Jerusalem. The
protagonist of the film decides to visit Israel in order to consult the local government to

analyze their strategy. The world is facing a global catastrophe because of the inner
human tendency to accept the status quo: scientist from different countries agreed on a
common thesis that underestimated the virus and treated it as normal bacteria. However,
once the bacteria spread globally, Jerusalem prevented its diffusion thanks to the 10 man
th

rule: if nine of us look at the same information and arrive at the same conclusion, its the
duty of the tenth man to disagree, no matter how.
This sample has an evident biblical matrix - 10 is the required number of people for the
prayer - but it explicit the meaning of the Evil principle: whenever an option is chosen,
the examiner has to evaluate objectively every single possibility without the influence of
personal favoritism or social partisanships. However, the effectiveness of this approach
can be guaranteed if the analysis is effectuated ex - ante and not ex - post: everyone can
critically highlight fallacies in his assumptions once they proved to be incorrect, but not
everyone can anticipate weaknesses in their own beliefs. This behavior is due to the
anthropocentrism that characterizes human beings and that overestimates the validity of
ones thesis. The human brain tends to draw inductive conclusions - the brain assumes
that a certain theory is effective and it tries to describe every aspect of reality with this
lens. This approach creates a distorted perception of reality because the brain starts from
the ontological level rather than from the epistemological level.
Because its easier to correct mistakes made by other people than to correct personal
mistakes, the way this critical method is implemented is by conferring to a specific
person the encumbrance to openly disagree with the majority. Even if the scene of the
movie is unreal, it perfectly describes a decision making process shared by different
strategic units: the Israeli Army, the Government and any consultancy department.
Despite its application very often might be redundant, it reduces biases.
Example 8
The web is saturated with pictures. Images can communicate emotions and can be much
more straightforward and persuasive than a text statement.

Purchasers tend to follow their celebrities or people who hold a similar lifestyle, values
and habits. Therefore, the principle of liking is extremely relevant and connected to
pictures posts on the web.
According to various statistics, as time goes on, we see that images are the content that
works in the best manner across different social media, such as Facebook, Instagram,
Twitter, etc.
Facebook has been the first to recognize this aspect. Some statistics, about its operation,
found that those who used the pictures tool for marketing policies obtained better results
in terms of likes, comments and visibility. The principle of liking, applied in this case, is
therefore extremely significant. In this sense, Facebook has been extremely strategic in
acquiring Instagram. It seems that it is testing the possibility to buy the products, which
are promoted in the form of images collection.
Also Foursquare, with its latest updates has become more and more visual while
Twitters statistics notes that the most popular tweets are those that contain pictures.
This is useful in order to understand how Instagram became a social media, which is
included in integrated strategies for a companys social media marketing.
In the case of B2C or B2B, it is relevant to be able to develop this new concept of
marketing that goes beyond the emotions communication by the use of a mobile
application. What underlies the fashion bloggers and brands success is the promotion of
its products, derived from the loading of images that immortalize celebrities with the
product.
Hence, the principle of liking is extremely synergistic and strategic in the success of
social media marketing. Consumers tend to follow the celebrities to who they aspire,
especially those who are most closely resembled to their culture, habits, and lifestyle.

Nordstrom operates a creative use of Instagram in promoting celebrities: it approaches

consumers to its models in order to attract them. In the past it was rare to see a star
behind the scenes immortalizing the normal side of a celebritys lifestyle.
Given the new role of Instagram, it seems to be a trend that gives the fans the possibility
to feel close to their idols. Nordstrom gives to his followers the chance to see how its
catalogues are built.
In addition, companies like Sephora exploit the contrast between the before and after.
This type of companies aim at showing how its product discerns from other prototypes.
In this sense, celebrities pictures on Instagram should emphasize the before and after.
Sephora is trying to give its followers creative ideas as a result of using its products.
Example 9
The principle of commitment and consistency comprise of the obsessiveness need to be
coherent with our previous actions. Once we have made a decision or taken a position,
we usually encounter a series of personal and interpersonal pressure, which pushes us in
the same direction as our previous commitment.
Leonardo Da Vinci stated: Its easier to resist at the beginning rather than at the end.
This principle has a practical and precise implementation in web-marketing context,
where the user acts in a certain manner, which will drive him towards the same path he
has been before.
In fact, if the user makes a choice, he tends to be consistent in not disproving it.
Certainly, the result is not guaranteed, but at the same time, customers have the best
chance of success with this technique.

Practical examples of this principle implementation are Ikea and Amazon with the
Giving back is easy policy, which explicitly consider the chance to return purchases
within a predefined period of time greater than the one provided by law.
If the customer had second thoughts about purchasing an item, he/she may decide to
return the item within 14 calendar days from its delivery without providing any reason.
That said, Amazon provides in addition to the law rights, the possibility that items
purchased on the portal (with the exception of large products and products listed for
which the withdrawal right is excluded by law) may be returned within 30 days from
delivery. For Ikea, such term is valid even up to 90 days. For Macys even no precise
return deadlines are requested.
In most cases, the refund will be credited in 3/5 working business days from when the
product has been returned and reached the logistics center.
The decisive step to ensure customers in the long-term is to guarantee certain benefits
aimed at the resolution of potential problems.
The faculty of giving back the items purchased for an extended period, guarantees the
customer to make their own choices in full serenity and effectiveness, as it allows saving
time by not having to think about the alternatives when buying the item.
The main advantage derives from the fact that this opportunity can make the customer
fall into the habit of maintaining consistency even when it is not strictly appropriate to do
so.
Indeed, the same concept is reproduced also in the principle of loss aversion, which
asserts that it just hurts much more to lose an item rather than the feeling of acquiring the
same item.
This way, customers gain confidence in the company, which might increase its
probability of becoming a return customer.

Example 10
An everyday example of social effect - how group actions can influence an individual
action - can be seen in nightclubs, pubs, and other social venues. By nature, we are drawn
to do what our peers are doing. No one likes to be the exceptional and if everyone is
doing something, the individual would like to be part of that something.
The nightlife scene understood that and took advantage of it by showing potential
customers the attractiveness of entering its nightclub/ pub and being part of the buzz.
This is done by either showing the customer how pack the nightclub is, or in some
cases where customers cannot see what is going on inside, by creating a line of people at
the door who are waiting to enter. This might work for the benefit of the business in cases
where the club itself is actually empty, but the line outside gives the false impression that
it is actually full. Once we see a crowd of people waiting to enter, we presume that this is
a popular place that we want to be a part of. Although in most cases it simply means that
this place has a good PR person and a great marketing plan, which place it as one of the
most attractive places to go out to. Another method social venues use to attract potential
customers is the context effect. This refers to the location in which the nightclub is
located and in particular, how physically close it is to another nightclub. In many cities,
all the nightclubs/ bars are located in close proximity to one another. Usually on the same
street. This phenomenon can increase the attractiveness of one nightclub over another by
showing customers the value of entering one nightclub over another. One nightclub can
lure its customers by offering a lower admission fee, free drinks, etc. This, however, can
also scare customers away. By offering free drinks or first free drink, the nightclub
actually raises the coverage fee and advertises it with one free drink. This is a great
example of down-selling, although the customer doesnt really have a choice here. He/she
can choose to pay the high admission and receive the free drink, or to not pay and not
enter. In most cases the customer will pay, walk in, and take the free drink. Finally,
another key norm nightclubs/ bars often use is the liking tool by inviting celebrities to
enter the club/bar. This helps attract other customers who want to take part and be close
to the person they admire and like.