Tuesday, February 9, 2016

Decoy effect - Popcorn pricing

The Decoy Effect or the Asymmetric Dominance effect is a phenomenon whereby consumers will have a specific change in preference between 2 options when also presented with a third option. src Wiki

National Geographic conducted an experiment in a movie theater where consumers were presented with 2 Popcorn pricing options. A Small for $3 and a Large for $7. Consumers preferred to pick the Small popcorn.

An additional variant Medium at $6.50 was added between the two. Buyers now had a distinct change in preference and opted for the Larger Popcorn.










The Decoy effect is used extensively by Marketers in Pricing Strategy.

Read more
How to use Decoy Effect to help buyers choose the right option

Watch the Natgeo video here.

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