Current Topic: Strategy

Do you usually go for a “fat burger”, “super-size burger” or a “thin cookie”? These kind of labels push us to make mental associations with human body shapes and types, triggering our emotions and the way we perceive and evaluate the food we consume. A “thin cookie” implicitly suggests a small portion and lower calorie content perfect for those who work out or watch their figure. A “fat burger” caters to hedonistic needs and might appeal to people getting a kick from larger, more satisfying portions. These very words play on self-image and fitting social expectations.  As humans, we tend to make choices that gain us acceptance from others we identify with and demonstrate our conformity to established norms (Van de Waal, Borgeaud, and Whiten 2013).

Picture this: You’re mindlessly scrolling through your Instagram feed, and there she is – Kylie Jenner, effortlessly flaunting the latest makeup trends. Now, Kylie is not just a reality TV superstar; she's a mega influencer with millions of followers. When you see her sharing her makeup tips and product recommendations, you can't help but feel a sense of wishful identification. You admire her glamorous lifestyle and think, "Maybe I can achieve a touch of that too!" It's like having a front-row seat to the world of luxury. These feelings of identification with Kylie spark a desire to emulate her, and suddenly, those makeup products she's endorsing become must-haves in your beauty routine.

Suppose you want to sell a cupboard; how do you determine the price? You will probably compare prices with similar ones and how much the purchase price was. Buyers, in turn, will judge it on external features: how many drawers are there, what material is it made of? Yet often there is a difference in what the seller thinks a product is worth and what the buyer is willing to pay. This is also called the endowment effect (Thaler, 1980).

However, society is becoming increasingly technological, and more (digital) services are offered. Think, for example, of a platform like Amazon, a company specializing in data privacy, or the experience of going to a concert. How are these services evaluated? And more importantly, how big is the seller-buyer gap? Let’s dive in!

Emojis have taken over how the world communicates online. From social media platforms to text messages, emojis have become an integral part of our daily communication. These little expressive icons have taken over our digital conversations. They add a splash of color, humor and personality to our messages making them more engaging and relatable. It’s amazing how a simple string of symbols can convey emotions and ideas, with just a touch of playfulness. 

Marketers love to end their prices with the magical numerical combination of 99. This practice, which is also known as charm pricing, psychological pricing or odd pricing, is seen in virtually every country across the globe. There’s no question about it: it works. But new research shows that the pricing trick will backfire under specific circumstances.