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Branding
A view from a Behavioral Economics perspective
Choice Architecture
0
20
40
60
80
100
D
enm
arkN
etherlands
U
nited
K
ingdom
G
erm
anyAustriaBelgium
FranceH
ungaryPolandPortugalSw
eden
86
10010010010098100
1217
28
4
%ofdriversdonatingorgans Organ donations?
Johnson & Goldstein (2003)
Time Discounting
Now
Desire
Next
week
Now
Desire
Next
week
Now
Desire
Next
week
Now
Desire
Next
week
Next
year
Year&
week
Now
Desire
Next
week
Next
year
Year&
week
Choice Architecture
+
Time Discounting
=
Trivial decision
Significant decision
Trivial decision
Significant decision
Trivial decision
Emotional
Significant decision
Trivial decision
Emotional
Significant decision
Trivial decision
Emotional
Computational
Significant decision
Trivial decision
Emotional
Computational
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”
External Signaling
Self Signaling
Signaling
Signaling
Signaling
To others
Signaling
To others
Signaling
To others To self
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”
Social coordination
Social coordination
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”
Expectations
Expectations
Expectations
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”
Fluency
Fluency
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”
Reward
Substitution
Reward substitution
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”Habits
Habits
Significant decision
Trivial decision
Emotional
Computational
“Emotional
computation”Habits
External Signaling
Self Signaling
Signaling
Social coordination
Expectations
Fluency
Reward
Substitution
Other forces
• Defaults*
• Emotions*
• Spotlight effect
• Conceptual consumption
• Price quality inference
• Encoding / Retrieval Match
• Elimination by aspects
• Habits
The spotlight effect
The spotlight effect
Final words
• Branding taps many aspects of human decision
making
• Not all brands and not all products tap the same
psychological mechanisms
• Understanding where your brand falls on the
“significance / computational map” is a crucial first
step*
• Once you understand your brand’s location -- it
should be clearer what actions you should take!

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