Context Effects & Consumer Choice

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  • 0:03 The Context Effect
  • 0:33 Similarity Effect
  • 1:33 Attractiveness Effect
  • 2:52 Compromise Effect
  • 3:40 Lesson Summary
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Lesson Transcript
Instructor: Elisha Madison

Elisha is a writer, editor, and aspiring novelist. She has a Master's degree in Ancient Celtic History & Mythology and another Masters in Museum Studies.

When shopping, there are different environmental aspects that influence you to make a purchase. This lesson will discuss context effects, what they are, and how each of them works.

The Context Effect

When you go out to buy something to drink from the store, what affects this purchase? The context effect theory states that there are three influences on why you buy goods and services, and they are all psychologically based. These are:

  • Similarity effect
  • Attractiveness effect
  • Compromise effect

These three psychological influences affect all decisions of a buyer when they are looking to spend money on a good or service. Let's look at these more in depth.

Similarity Effect

The similarity effect states that if there are three products, and two of them are incredibly similar, and the third is different, even if only slightly, then a customer is actually more prone to choose the dissimilar product.

Let's look at an example: Imagine you go to a household store to purchase a couch. They have two brown couches of similar material and quality, with slightly different designs. However, placed near these two brown couches is a red couch, different in look and material. It's more likely the buyer will purchase the red couch due to its uniqueness or dissimilar properties, even if the red couch is less in quality or more in price.

For marketing purposes, this can be used to determine how you place the products in your store. If you place the products you need to sell sooner next to similar objects that are dissimilar from the product you need to sell, it is more likely you can sell the product. This is also a reason why companies will release a new version of a product every year, to keep buyers interested.

Attractiveness Effect

The attractiveness effect actually has several components to it. First, if a consumer sees a product as attractive, it's more likely they will buy it over less attractive comparisons, even if the less attractive are cheaper. Secondly, if the product is seen as more popular in the customer's social circle, that product then gains additional attractiveness for the buyer. However, attractiveness is in the eye of the beholder, so it's dependent on what the buyer thinks, not just the product.

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