The Decoy Effect in Marketing ; How Smart Pricing Influence Customer Choices Have you ever noticed how one product on a menu seems oddly overpriced—until you realize it makes another look like a bargain? That’s not coincidence. It’s the Decoy Effect , a psychological pricing strategy that subtly nudges customers toward the most profitable choice. 1. What Is the Decoy Effect? The Decoy Effect happens when businesses introduce a third, less attractive option (the “decoy”) to steer buyers toward a target choice. It’s not about manipulation—it’s about perception. For instance, when consumers are offered: - Small popcorn – ₹100 - Large popcorn – ₹250 Most people buy small. But if you add a Medium popcorn – ₹230 , suddenly the large looks like a better deal, even though nothing else changed. This happens because people evaluate options comparatively , not logically. 2. The Psychology Behind It Humans rarely make decisions in isolation. We instinctively compare. The decoy ...
The Decoy Effect in Marketing ; How Smart Pricing Influence Customer Choices Have you ever noticed how one product on a menu seems oddly overpriced—until you realize it makes another look like a bargain? That’s not coincidence. It’s the Decoy Effect , a psychological pricing strategy that subtly nudges customers toward the most profitable choice. 1. What Is the Decoy Effect? The Decoy Effect happens when businesses introduce a third, less attractive option (the “decoy”) to steer buyers toward a target choice. It’s not about manipulation—it’s about perception. For instance, when consumers are offered: - Small popcorn – ₹100 - Large popcorn – ₹250 Most people buy small. But if you add a Medium popcorn – ₹230 , suddenly the large looks like a better deal, even though nothing else changed. This happens because people evaluate options comparatively , not logically. 2. The Psychology Behind It Humans rarely make decisions in isolation. We instinctively compare. The decoy ...