Restaurants are great test labs for testing neuromarketing techniques. It's easy to change offerings, menus, and pricing, and one gets immediate feedback on what's working and what's not. Today, many eateries are employing sophisticated menu psychology to maximize sales and profits.
In both Decoy Marketing and More Decoys: Compromise Marketing, I wrote about how adding an item to a lineup of products could increase sales. In the former, the “decoy” was a product that was less attractive than another product but priced the same, or almost the same. This caused sales of the more attractive product to jump, perhaps because it looked all that much better by comparison to the similarly priced but less attractive product.
Now, researchers at the University of Minnesota have used brain scans to show that it’s easier for people to make a decision when a third product option is present vs. choosing between just two possibilities. […]
Why a logical product lineup may not be the most profitable
When marketers plan a company’s product offerings, they usually try to do so in the most logical way possible. Several levels of product may be offered – a stripped-down, basic version, a more capable better version, and perhaps a “best” version. These would normally be priced at quite different levels, probably based in part on the relative manufacturing costs of the products. In one of my most-read posts, Decoy Marketing, I described research that showed how a seemingly irrational pricing strategy, i.e., pricing an inferior product either the same or almost the same as a better one, could boost sales of the better product by making it look like a bargain. (In that case, the inferior product is the decoy.)
Now, let’s look at a different kind of decoy: a new high-end product that, even if it sells poorly, can boost sales of the next product in the lineup. Stanford Business describes how this can work: […]