Magnitude Encoding Process definition
If you want people to perceive a price as being small, then it can be very effective to associate all of its features with a small magnitude, including the way it is visually presented. Numerical stimuli (prices included) are represented and encoded in our memories as magnitude representations (i. e., judgments of relative “size”). Therefore if you want a number or price to be perceived as smaller it is possible to influence this through the way it is physically represented.
Research has shown that judgements are made based on, often irrelevant, anchors (the Anchoring Effect principle) but Oppenheimer, LeBoeuf and Brewer (2007) found that this also extends to physical and visual anchors. In other words, people will be biased in making judgements depending on any associated visual stimulus. In the following case, the unrelated small visual stimulus presented resulted in people having smaller numerical values in mind. They conducted an experiment whereby students were given three drawn lines (1 straight, 1 wavy and 1 an inverted “u” shape) and asked to copy these without use of a ruler. Group A were given short lines in length and Group B longer lines. The second section of the experiment consisted of a questionnaire where the first question was “How many miles long is the Mississippi River?” followed by 5 more random questions to avoid anyone catching on to the reasoning behind the test. It found that Group A, who had drawn shorter lines, gave an average response of 72 miles in comparison to the 1224 miles given as an average response by Group B, a huge difference that was entirely due to the length of the lines they were first asked to draw. They later repeated the experiment exchanging the question with “What is the average temperature in Fahrenheit in Honolulu, Hawaii?” and once again Group A with the shorter lines gave a much lower average temperature that Group B, showing that the physical anchor doesn’t have to be visually similar.
In marketing, this principle can be used in a wide number of ways to help prices seem smaller. The visual representation itself of the price has a direct influence on how low or high people will perceive that price to be. Most obviously, use of a smaller visual magnitude (such as using a smaller font) can make the price seem smaller but equally, playing with the placement, the colours used or another visual element can also help to reduce their perception of its magnitude.
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