It’s All Relative: Marketing with This in Mind

What is marketing but trying to influence decision making (the decision to buy)? As a farmer, you want people to buy your apples, walnuts, and beef. There is some good information out there on effective marketing principles, but what I want you to think about today is not what works, but why it works. I think once you do, you will have a better sense of how to present an effective marketing message. So, we agree that you are trying to influence a person's decision (to buy your apples or not). Before you go about influencing decisions, have you ever thought about how people make decisions?

Imagine for a moment the purchases that you make of fruit on a weekly basis. What fruit do you buy and why? You might buy mandarins instead of grapefruit because they are in season. You might buy bananas instead of pomegranates because they marry better with peanut butter. You might buy red apples instead of green apples because they cost less. You have choices here, but the point is that you ultimately have to decide or you will go home with no fruit (another decision). As economists like to say, each decision that you make comes with an opportunity cost. If you buy apples, you have just lost out on spending that dollar on mandarins or bananas. So, which opportunity will you choose? What fruit do you buy? You have to choose one thing or the other and what I am hoping to convince you of is that you make this decision largely on the basis of comparison.

Money Talks

Price is the first point of comparison that many people make. Sometimes we think of buyers as, “price shoppers,” but let's be frank- we are all “price shoppers,” to some extent. This principle is so obvious that I won't belabor the point- it is what keeps Costco and Grocery Outlet in business. But, what I will comment on is our comparison with past vs. present prices. We all have these price expectations. We do. Imagine for a moment your frustration each time you fill up your car with gas and notice the price per gallon has risen quite a bit. Why are you so upset with the price increase? What if gas is now worth that price? You're angry because the first gallon of gas that you bought “anchored” your expectation for what gas should cost. All future purchases of gas, unfortunately, will be compared with this first price. It effectively set your expectation for what gas should be worth. This example of gas prices comes from behavioral economist Dan Ariely in his book, “Predictably Irrational.” As he suggests, all of our buying decisions function on the basis of these comparisons between past and present prices. Therefore, we get predictably happy when we see walnuts on sale for a lower price than we've paid in the past and are predictably unhappy to pay more per pound for apples than we have in the past.

A Taste Sensation

Taste should be the reigning king or queen of decision making for produce (or any food), shouldn't it? Well, even if it's not, taste does have an impact on buying and it is most effective when comparison is salient. Anecdotally, there are many people I know who buy fruits, vegetables, and meats from local farmers because this food tastes better to them than what they can buy in the grocery store. There is value not just in the taste of locally grown food, but in the COMPARATIVE taste.

I have also seen the power of taste comparisons in a farmers' market setting. One day I was working at a famers' market and we were handing out samples of different melon varieties that we were trying to sell. There were many customers who, after tasting the different samples, would comment (while buying a particular melon), “this one just tasted better” or “this kind tasted the best.” Notice the word “better” used as a word of comparison, and even “best,” a superlative, still connotes comparison with lesser items. My point: customers made their buying decisions based on RELATIVE taste (not absolute taste). I would also argue that the increase in sales that we saw from sampling melons was due to giving customers this point of taste comparison (i.e., comparison of the taste of different varieties of melons AND comparison with melons that they had tasted in the past).

Eat This, Not That?

How do we know what foods are healthy for us? Well, (you're catching on to this theme right?) we compare with what foods are unhealthy. In one study looking at restaurant entrees, positive nutrition information swayed consumers' positive beliefs about that item (and its nutritional value) more when the context (other menu items) was less healthy (Kozup et al., 2003). This suggests that people use comparison to judge relative health of a product. It may also mean that providing comparison data for unhealthy foods (e.g., nutrition of apple flavored jelly beans) will enhance the marketing effects of the nutrition date you provide for your healthy food (e.g., apples). Furthermore, it suggests that NOT providing this comparison will dilute the impact of using nutrition information for marketing. This is because it may be presented within the context of other nutritionally healthy products (e.g., at a farmers' market) and won't stand out.

Okay, so that's a lot of information and maybe you're thinking: How could this work for a food buying decision in real life?!? I'm so glad you asked. Say, I live in Auburn and show up at the Saturday Farmers' Market in early December to shop. I love to eat apples as a mid-afternoon snack and so I'm definitely in the market for something to fill this need. How am I going to decide which apples to buy? I saunter up to a friendly looking farmer and start looking at the apples for sale. Right off the bat, I see green and red apples and I know I like a sweet apple so I'm going red. Green is out. I see some apples that are pretty large and knowing that I won't want to eat just ½ an apple at a time, I go towards the medium sized apples. Serving size appropriate: great. There are two types that now look promising, but one is about 50 cents cheaper per pound. I'm a price shopper. Sold. I have found my perfect apple and all because I found a lot of apples that didn't look as good by comparison. This idea is put quite well by Ariely, who writes, “Most people don't know what they want unless they see it in context.” I couldn't have voiced to you the perfect apple that I was looking for, but when I saw them side by side their apple cousins- everything became clear!

Ultimately, I think it is fascinating to think about how we make decisions. Additionally, the outcomes of all these little comparison decisions aggregate into the decision consumers make to buy (or not to buy). Knowing these principles of relativity can help you present the easiest decision making process for your customers. How about asking a customer, “what variety of apples is your favorite?” Or “What color apple do you prefer to buy” instead of, “Would you like to buy apples today?” People are decision making machines. Help them out by creating easy points of comparison for the food you are selling. Is it tastier? Healthier? Grown closer to where they live? Cheaper? Only you know how much better your product is until you share this information. Can you give people the comparisons that they crave and make it easy for them to choose your product? The decision is yours!

If you are interested in learning more about marketing, think about attending our Farm Marketing Academy February 21^st and 22^nd. For more information click HERE.

References:

Ariely, Dan, 2008. Predictably Irrational: The Hidden Forces That Shape Our Decisions. Harper Collins, New York.

Kozup, J.C., Creyer, E.H., and Burton, S., 2003. Making Healthful Food Choices: The Influence of Health Claims and Nutrition Information on Consumers' Evaluations of Packaged Food Products and Restaurant Menu Items. Journal of Marketing, 67 (2), pgs. 19-34.

Read more