Hey there, prepare to be amazed as I am unravel the secrets behind this powerful psychological phenomenon that has marketers around the globe from international companies like Apple companies, Coca Cola and others have been strategizing like never before. My reveal secret is the Decoy Effects,  it is used to sell the pricer products among the lot.

Imagine this : you want to buy popcorn 🍿 before you go in the movie theater at the popcorn  shop, faced with a menu offering three sizes of popcorn Small, Medium and larger sizes – with a price range from for $3/= small, medium $6 and for large $6.50. Now, what if I told you that a third option, a strategically placed decoy, could influence your decision-making process? Intrigued? 

First things first, let's understand what the “Decoy Effect is”. Coined by marketing scholars Joel Huber, John W. Payne, and Christopher Puto in 1982, this effect comes into play when a third, less attractive option is introduced to make one of the other options more appealing. It's like a psychological magician's sleight of hand, steering consumers toward a specific choice without them even realizing it.

Technically in the world of Psychological studies, 

The decoy effect is a cognitive bias observed in consumer decision making, where the introduction of a third, less attractive option (the decoy) influences individuals to change their preference between two other options, making one of the original options more appealing. The decoy is strategically designed to make the target option (usually the more expensive or profitable choice for the seller) appear more attractive in comparison to the other original option. This effect is often used in marketing and sales strategies to nudge consumers towards specific choices that benefit the seller.

This is what you usually experience when you buy popcorn at the cinema 

Let’s bring more Real-World Examples: 

To bring the concept to life, we'll dive into real-world examples of the Decoy Effect in action. From pricing strategies at your local cinema to the choices you make when selecting a streaming service subscription on NETFLIX and whenever you buy new or used phones, you'll be surprised how often this sneaky tactic is at play.

The Neuroscience Behind It:

 Now, let's get a bit nerdy (in the best way possible) and explore the neuroscience behind the Decoy Effect.Iwill break down how our brains respond to choices, why we tend to avoid extremes, and how the introduction of a decoy triggers a subtle shift in our decision-making neural pathways.

Imagine you have a favorite toy, and your mom gives you two options: a small one and a big one. You really like the big one, but it's a bit more expensive. Now, here's where the magic happens!

Our brains don't always decide based on what we truly want; sometimes, they take shortcuts. When there's a tricky third option, called the "decoy," added to the mix (like a medium-sized toy that's just okay), our brains get a little confused.

It turns out, we often compare things in relation to each other, rather than considering them on their own. So, when that medium-sized decoy is there, it makes the big one seem like a way better deal. Our brain goes, "Well, it's not as small as the first one, and not as pricey as the big one, so I'll go for the big one!"

It's like having a friend who makes your favorite game look even more awesome just by being there. That's the Decoy Effect working its brainy magic – making choices a bit more fun and tricky!

let's dive into a simple example of how marketers can use the Decoy Effect to their advantage:

Imagine you're in an M/city Apple store, excited to buy a new iPhone. The store offers you two choices.

1. iPhone 15 (128GB) - $999
2. iPhone 15 Pro (256GB) - $1,199

Now, the M/City Apple marketer decides to introduce a third option, a cleverly placed decoy:

3. iPhone 15 Pro Max (512GB) - $1,399

At first glance, the iPhone 15 Pro Max with 512GB might seem like a bit too much – both in terms of storage and price. Most customers might find it excessive. However, the presence of this high-end option influences your decision-making process.

Suddenly, the iPhone 15 Pro with 256GB, priced at $1,199, seems like a reasonable compromise. It's not as pricey as the Pro Max, but it offers more storage than the standard iPhone 15

The Decoy Effect, in this case, nudges customers towards the iPhone 15 Pro, making it appear as the more attractive and balanced choice. It's a subtle yet powerful way Apple strategically influences your decision, making you feel like you're getting a great deal in comparison to the decoy option.

Another clever trick with the Decoy Effect is during sales. They make the most expensive thing kind of close in price to the "decoy" option, but they still make a good profit. This makes the middle-priced choice look super appealing to customers. It's like a sneaky way to make people choose what the seller wants, without losing out on money.

In online shops, some smart companies do a trick with prices. They make the most expensive chocolate just to look fancy. They know not many people will buy it. Instead, most folks will pick the one in the middle, which still makes the company more money. It's like a secret plan to guide people to choose something not too cheap but still good for the company. They want customers to feel happy about their choice while making more money. Smart, huh?

In order for you to implement decoy effect in your business , there are six (6) elements to you need to consider 

 1. The decoy option should be strategically designed to make the target option more attractive in comparison to the other original option. 

 2. The decoy option should be partially inferior to the targeted option but superior to the competing option. 

 3. The targeted option should be the choice that the business wants the consumer to make. 

 4. The competitor option should be the option competing with the target that the consumer might want to make. 

 5. The decoy option should be presented in a way that nudges the consumer towards choosing the target option.

 6. The decoy effect should be used ethically, without deceiving or manipulating the consumer.

By considering these critical elements, your businesses can effectively use the decoy effect to influence consumer. 

To sum it up, the decoy effect is used to bend your clients  mind into thinking, you have got a really good deal.