The decoy effect is a cognitive bias where consumers tend to change their preference between two options when presented with a third, less attractive option that serves as a decoy. This third option is strategically designed to make one of the original options more appealing.
In sports retail marketing, the decoy effect can play a significant role in influencing consumers’ choices among competing brands. Let’s explore how the decoy effect can be applied in this context.
Imagine a consumer is considering purchasing a pair of athletic shoes and is torn between Adidas and Nike. Both brands offer similar features and prices. However, Reebok enters the picture as a decoy with a slightly lower price point, but fewer features as compared to the other two.
In this scenario, the consumer might be inclined to choose between Adidas and Nike initially. However, the introduction of Reebok as a decoy makes the choice more complex. The decoy effect comes into play when the consumer perceives greater value in the more expensive options (Adidas and Nike) because they offer better features compared to the Reebok shoes.
Here’s how each brand might leverage the decoy effect:
- Adidas: Adidas can position itself as the premium choice, highlighting its advanced technology, durability, and performance benefits compared to both Nike and Reebok. The presence of Reebok as a lower-tier option could make Adidas appear even more attractive in terms of value and quality.
- Nike: Nike might emphasize its cutting-edge designs, celebrity endorsements, and innovative features. When compared to Reebok, consumers might be more inclined to choose Nike due to the perceived superiority of its offerings.
- Reebok: Even though Reebok is the decoy in this scenario, it could still benefit from the decoy effect. Some consumers might opt for Reebok due to its lower price point, even if it offers fewer features than Adidas and Nike. The decoy effect makes Reebok a viable option for budget-conscious consumers who still want a recognized sports brand.
- Puma: Let’s introduce Puma into the mix. Puma could strategically position itself as a balance between Adidas and Reebok. It could offer a blend of quality features and a competitive price point. The presence of Puma as a mid-tier option might influence consumers to choose it over Reebok due to its perceived value and comparable quality to Adidas and Nike.
By skillfully presenting a range of options and leveraging the concept of relative value, rather than absolute value, retailers can nudge consumers towards a desired outcome. Consumers are likely to select an option that aligns with their preferences, needs, and budget, all while being subtly influenced by the comparisons between brands.
