How Brands Drive Purchase Decisions

How Brands Drive Purchase Decisions

Brands are hugely important aids to decision-making. If marketing science (derived from behavioral science) tells us that most advertising works by creating greater mental availability – creating largely subconscious associations with products and services – what does this mean for brands? Are brands simply a collection of memories? And how do these affect the decision to purchase?

If we think of the role heuristics – mental shortcuts – play in our lives (they aid us with complex decision-making), then the simplest explanation of the role of brands is this: they are heuristics that aid us in our purchasing of goods and services. And as heuristics comprised of a collection of memories and associations, the role of marketing is to build those associations in a way that makes those products and services cognitively easier to buy.

Consider this example: making a purchase in a foreign supermarket. When we are in a supermarket in our own country, the brands we see there will have a whole raft of associations, many of which will be non-conscious. When we see a brand we recognize, those associations come to mind, and if they meet our criteria for purchase, we buy. The brand has acted as a mental shortcut to aid our purchasing decision, i.e. as a heuristic, and allowed us to choice satisfice.

Memories And Brands

At this point, you might be considering some of the best-known brands and thinking: surely they are more important than simply a collection of memories? If you are responsible for your business’s brand, you might be experiencing an existential crisis, thinking that the age of the brand is over because they cease to have relevance in a meaningful way.

I put this question to Richard Shotton, who replied: “If you believe that brands are mental shortcuts, and the world is becoming more complex, then brands become more, not less, important.”

This is because brands help us to choose based on our natural tendency towards loss aversion, certainty, and the avoidance of disaster – enabling us to make good enough decisions. For this, customers are often willing to pay a premium, making brand-building hugely profitable.

“In an uncertain world, when we make a decision we’ve got to make a trade off between the average outcome and the degree of variance,” says Rory Sutherland. “In evolutionary terms to be happy we need both. It’s no good going for the perfect solution if on average, one time in 100, it’s fatal. My contention is this is why people pay for brands. When people buy brands, they’re not being irrational. They are principally paying for low variance.”

Perceptions And Business

He maintains that altering perception of a product or service through branding is far cheaper than changing the reality: “You don’t need to produce the thing that people claim would produce the feeling, you just have to produce something that produces the same feeling. The cheapest way of producing a desired emotion is what a business should be doing.

It’s not the cheapest way of producing a product, it’s the cheapest way of producing the emotion which the product generates … The advertising industry, you could say, is a way of saying, ‘Don’t tinker with the reality because it’s expensive.’ If you change the context in which the human perceives the real thing, the stimulus will be different, the emotion will be different, and the behavior will be different … what actually affects our behavior isn’t objective reality.”

The supermarket brand Aldi knows this well. Their (much cheaper) own-label brands (pictured above) closely replicate the logos, colors and semiotics of better known, established brands to make our in-store decisions as cognitively easy as possible. If it looks like a packet of Walkers crisps, it must taste like it, right?

In other words, brands help us make good enough, system-1-led purchase decisions. Which is why the foreign supermarket is such a hard problem.

Contributed to Branding Strategy Insider by: Richard Chataway, President of BVA Nudge Unit UK and excerpted from his book The Behaviour Business, published by Harriman House.

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