Cognitive Reference Points in Consumer Decision Making

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: The Effects of Framing on Consumer Behavior

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:03 Consumers on Auto Pilot
  • 0:46 Reference Points
  • 2:20 How to Use Reference Points
  • 4:18 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
Speed
Lesson Transcript
Instructor: Melanie Lawson
In this lesson, you'll learn about reference points in marketing and how the reference points are used to impact a consumer's decision-making process for both big and small purchases.

Consumers on Auto Pilot

The modern day consumer shops on auto pilot. We're constantly viewing advertisements on television and on our electronic devices telling us about the latest products we simply can't live without. Many of us also do our shopping online, making it even easier to get what we want with just one click.

Part of what makes this shopping process easier is that companies seem to know what you like and want even more than you do. Your browsing behavior is tracked online and this leads to pop-up ads telling you what style of clothing you like and what shoes you should be buying. Companies use these reference points to allow you to compare what you're being shown to what you already know and like. This strategy almost takes the decision making out of shopping.

Reference Points

Cognitive scientist Eleanor Rosch defined a reference point as ''any stimulus which other stimuli are seen in relation to.'' In marketing, this means that the consumer sees the marketing material (such as a television commercial or print advertisement), and relates it to their expectations, knowledge, and what they like.

Marketing reference points attempt to tap into what consumers already know and use cognitive shortcuts, or heuristics, to reach the consumer. For example, clothing companies often use physically attractive models in their marketing to quickly grab the consumer's attention. The idea is the consumer believes they will look like the supermodel in the commercial if they purchase those jeans. If we purchase the jeans online, the shortcuts become even easier to make because we have an online browsing and buying history. Next time the buyer want jeans, the same pair in the same size is just a click away.

Reference points can also be used by companies for products that require more complex thinking before making a purchase. In these scenarios, reference points can also include price and historical buying experience. For example, purchasing a car is a complex decision and the consumer often does a lot of research before making this type of purchase. The car company might still use a physically attractive celebrity to initially capture the attention of the consumer, such as Matthew McConaughey driving a Lincoln. They may then further intrigue the consumer by saying 'starting at just…' and showing a price which might be lower than anticipated. Another similar technique, sales get the consumer to think the price is lower than they expected.

How to Use Reference Points

We've already discussed examples of how reference points are used - physical attractiveness, celebrity endorsement, and low price communication - but there are a few other marketing tactics that use reference points worth discussing.

One tactic is often referred to as the 'foot in the door' technique. This technique, often used by non-profit organizations, refers to getting the consumer to commit to a small request initially, hoping that they will later commit to a much larger request. The small initial request is used as a reference point for the consumer to then make a much larger donation or comply with a larger request.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create An Account
Support