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Why marketing is dependent on psychology

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3 – Point Essay Why marketing is dependent on psychology



We will be studying about marketing, branding, and the truth about Apple and other large corporations. There is a lot of overlap between marketing and psychology, in order to be effective at marketing, you must first learn psychology. Rory Sutherland is the author of Alchemy, and he was a guest on The Diary of a CEO podcast. We will be going through Sutherland’s and Steven Bartlett’s thoughts and understanding on marketing and psychology. “Magic is possible in psychology even if it isn’t in physics.” Rory Sutherland


Understanding branding is extremely valuable. We will address the question of why determining the investment cost of a brand is so difficult. the benefits of having a strong company culture for branding. Andrew Beattie will fill us in on everything.

2     Changing the value and quality of the journey


Finding psychological moonshots is much simpler than finding technological moonshots if we’re looking for a 10x improvement.

He uses a train as an example; it is very difficult to make a train go 10 times faster than it did in 1820, but it is still possible to make the train journey 10 times more enjoyable.

Most of us are unaware that the Uber map is based on human psychology. We would say that we dislike taxes that take a long time to appear and prefer those that do not. A rational person or engineer would argue that we need a predictive algorithm to make taxes close to the customer, there is nothing wrong with that, but it would require a massive amount of scale. The thing that bothers us about taxes is the degree of uncertainty that it will actually turn up, what if he doesn’t find my location? What if the person I spoke with was lying? All of these things cause us stress, and while you can shorten the period of stress by having the taxi arrive quickly, the stress remains. You feel more confident and relaxed when you have a map that shows you where the taxi is. It’s the same amount of time, but the quality of the waiting has changed. (Sutherland, The Diary Of A CEO, 2022.)




3     Having low pricing is bad (recursive fashion)

Increasing the difficulty of the process can sometimes make it more appealing to customers. According to Rory Sutherland, this is known as the Ikea effect. Ingvar Kamprad, one of Ikea’s founders, believes that assembling your own furniture adds to its perceived value. According to Rory, you could also argue that it de-stigmatizes low prices.

For instance, there is a distinction between cheap strawberries and pick your own strawberries, pick your own strawberries are cheap, but there is a story behind why they are cheap: you put some effort into getting the strawberries.

Sometimes you have to make something more expensive to make them more trustworthy. It may seem too good to be true. It has to have a narrative to why it is cheap.

For example, low-cost airlines spend a lot of time talking about what you didn’t get, how you have to pay to check your luggage, and so on, all to give you the impression that there is a legitimate way to save money.

Assume you launched EasyJet and claimed it was as good as British Airways. How are you doing this, the untrustworthy customer will ask? Is this because you are not servicing the engine or because the pilots are on day release from prison? There will be questions unanswered which is bad thing.

Interestingly, negative stories about a product can sometimes be used to offset the negatives that a consumer would expect.

There is also the Ikea effect, which states that the effort of going to Ikea and navigating the maze makes it more difficult to leave empty-handed. To validate your trip, you must purchase something.

Human behaviour is driven by habit and social imitation, so if you have never done something and none of your friends have either. Doing something is much more difficult to do. Buying a good car from China, for example, is difficult if the car is unknown to your social circle, even if it is as good as a Mercedes.

One of the curses of capitalism is recursive fashion. (Sutherland, The Diary Of A CEO, 2022.)




4     Valuing Rarity


Jermey Bulmer, a creative director at J Walter Thompson, stated that when he was a child, all cheddar cheese came with a rind, and most cheese you buy is cut from a wheel and has some kind of wax on the exterior. Someone at the time began selling rindless cheddar and charging a premium for it. About 30 years later, people began to introduce farmhouse cheddar with the rind still attached, and they charged a premium for it. “It’s partly human neophilia, so what’s different attracts our attention,” Rory believes.

But why does this not apply to, say, a car company, or is it the item’s rarity that makes it valuable?


When a recursive trend appears a second time in a different context, it means something different.  The podcast host Steven Bartlett mentions brands like Fela, saying that when he was 10 years old, buying Fila meant you had no money, but that when he was 20 years old, having Fila meant you were the coolest person.


The host made Rory drink a healthy drink that he was promoting. Rory thinks it’s good, but he thinks it’s good that it’s not very tasty because we wouldn’t believe it’s healthy. To believe it, diet Coca-Cola must taste slightly bitterer than regular Coca-Cola.

Making something more difficult is beneficial to people and has a stronger placebo effect. Also in some cases it makes you trust them even more for instance, you are searching for a trip on the internet and the after you press that search it tells you, we are searching all these airways give us 15 seconds. You believe this more because you believe they did a good job.

(Sutherland, The Diary Of A CEO, 2022.)








4.1      The Problem with the internet

The other great problem of the internet is that it allows you to do is to plan your entire holiday on a granular level of detail which is inimical to having a good time. Good time often requires spontaneity.

The whole purpose of what you would call Silicon Valley technology is to make location irrelevant. He means by this that, where you are is irrelevant to the performance of a particular function. There are negatives and positive to this.

For instance, when you left work you couldn’t work because your computer was on a desk, and you photocopied in the photocopier room. Where you were determined what you were doing, and a certain focus arose from that. Which is being destroyed by mobile phone to some degree.

“Trillions of dollars are invested in the capacity to obtain effects remotely hadn’t made a dent in the commute at tall.” Rory Sutherland

(Sutherland, The Diary Of A CEO, 2022.)





5     Branding


Steven Bartlett the host saw one of his favourite brands showing their warehouse, he saw the item that he bought and he saw thousands of them. It made him think of why apple lay down one product in the store, to give it more value. Knowing the story of the product is very valuable to the customer and to your brand.

“The worst thing you could do is create under-appreciated value, manufacturing something without working out how to make people realize how great it is.” (Sutherland, The Diary Of A CEO, 2022.)

Branding is very important to a company it is what the customer sees, hears, or experiences. It is a lasting impression.

Defining the brand is a must, write down three things that define your business. For example, our upcoming business TeaTak, It is clean, good customer service and different aesthetic.

Be consistent in your branding, you want it to have the same message to all your customers. The example of this is MacDonalds. You could go anywhere in the world and find a MacDonalds that has the same menu with the same tasting food and you don’t even need to speak the country’s language to order food. People go there because they know what to expect and they like it.

Differentiating your brand is essential for a one up on your competitors. Generally speaking, companies in the same industry offer 99.9% identical to non-specialists. You must identify the small difference between yourself and your competitors and then popularise the difference. By differentiating your brand you will make the customer chose you over your competitors because of the branding.

Innovative ideas and distinct messages always elevate a brand’s status. Apple had upsurge in sales from 2000-2010. The reason behind that was because they changed their brand to embody creativity. Apple associated their computer with people on the cutting edge. Just like mentioned after separating yourself from your competitor, hype it up. Apple did just that in 1985 with ads, like Super Bowl commercial of blindfolded businessmen marching off cliffs. This concept has been hammered into customers’ heads for decades, with many advertising emphasizing the same theme.

Making an emotional connection with your customer increases the chance of building brand loyalty. For example Folgers coffee make ads with many senarios, hockey in winter, camping in the mountains, bad coffee at home. They give you the problem that you can relate to and make the emotional connection with the scenarios. It doesn’t always have to be a positive memory. Insurance companies do this by showing a house flooding or on fire and the voiceover says something like “we will always be there for you”. With each marketing campaign, strive to improve your brand’s emotional appeal. (Investopedia, Andrew Beattie.)


6     Monitoring your brand

You will have to watch your brand carefully. Don’t make the mistake of mix singling your customers. Your promotional materials for the business should have the same look, feel and message. For example, making one poster full of text and the colour theme is green then the next poster that you make is blue and different feel, this is a big mistake that you should avoid. Make sure that everything is connected and that they match your business as well.

Your company culture also effects your brand. Your employees become part of the message. For example, If you are running a healthy food chain, you should hire healthy people who exudes good health. Same for accounting firms, you are going to want to employee people who exude a sense of responsibility.

It is difficult to assess the worth of a brand. The time and effort that corporations like Coca-Cola and Apple have invested into branding has built an economic moat around them.

Bottom line good brands take time to develop. from the perspective of investors companies that invest time and money in effective branding have the potential to receive financial rewards in the future. (Investopedia, Andrew Beattie.)




The Diary of A CEO, 1.8.2022, The Marketing Secrets Apple & Tesla Always Use: Rory Sutherland | E165, https://www.youtube.com/watch?v=Hz3RWxJck68&t=2844s&ab_channel=TheDiaryOfACEO


Names mentioned in this essay by, The Diary of A CEO

Ingvar Kamprad

Jermey Bulmer, a creative director at J Walter Thompson



Investopedia, read on 12.3.2023, How a Company Creates a Brand, Writer Andrew Beattie, https://www.investopedia.com/articles/professionaleducation/11/how-companies-create-brands.asp


  • Terēze Teibe

    Good examples and ideas shared in this essay! Made me think. 🙂

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