Both videos in this discussion are under two minutes, each. In the first video, a speaker explains framing effects in the context of marketing. In the second video, the producers conduct an experiment that attempts to explain how framing effects impact the way people make decisions or think about an issue. Both videos show that many of our rational decision-making is more influenced by outside framing than we realize. Considering the ease with which decisions are changed by simple framing effects, it becomes apparent that system one is susceptible to the ploys multi-billion dollar marketing industries specialize in.
In marketing, the framing effect is an important concept for concept testing. For the marketing industry, making the value relevant enough to consumers that it draws the interest (& ultimately money) from the consumer is a challenge. Marketing is predicated upon drawing value from the customer. Thus the effect of framing value is essential to deployment of successful marketing concepts.
I am tempted to say that framing effects are connected to anchoring effects, though the two may differ subtly. Dr. Carlin recently described the framing effect using housing prices between two cities. The idea was that that the housing prices in a city like Houston anchor one’s idea of what general housing market prices should be, if this person lives in Houston to begin with or for a while. After moving to Boston, the same person has trouble accepting that similar housing is more than double the cost. In this way, I see a similarity in framing effect and anchoring. It could be argued that the framing effect of a housing market in Houston influenced the opinion of livability elsewhere, say Boston or San Francisco. Ultimately, it seems that anchoring effects and framing effects are viewed best when illustrated through financial value. Financial value is an easy way of establishing quantization (that is, a variable’s ability to occupy discrete magnitudes).
Still, Yale’s School of Management clip of Dr. Ravi Dhar suggests that framing effect can be more abstract. For example, a consumer’s emotional attachment to an idea or pitch can be altered by altering the approach of framing. Professor Dhar offers a strong anecdote about closing a library and two alternative approaches to stopping the library’s closing (watch to see).
In conclusion, an effective strategy to influence decision makers in the desired direction is to think about what makes something “consumer-insights driven.” Knowing what drives consumer insights enables firms to market in a way that frames the value most effectively.