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Decision making and the the role of brands

Decision making is a subject close to my heart. How do people arrive at a decision to buy something and why does this journey differ so much between people? I remember asking someone why they bought a Porsche and they told me that it was because it holds its value! That’s my point. People find it very difficult to articulate how they arrive at a decision.


Our starting point is to think about how decisions are made for different products. We think and act differently when buying a house or a car compared to a bar of chocolate. The consequences of making the wrong decision are clearly very different depending on the cost of the purchase and the effect it will have on our lives.


We then have to consider what we know about the product we are purchasing. If we assume that the purchase is being made for the first time, it is likely that we will have done a little bit of research into the product. If it's an expensive life changing product the research can be expected to be deeper and to take longer than something that is fairly inconsequential. The time spent in research will uncover things that are of different interest to different people. Some may want a considerable insight into how the product is made, what ingredients are used in its manufacture, and where it originated. Some may be less interested in such detail and be prepared to trust a well-known brand. In the past, research of this kind into a product involved reading advertisements, speaking to people who have bought the product, and in certain circumstances, speaking to the supplier. Nowadays, we get this stuff online.


We should bear in mind that one of the oldest decision-making models is AIDA - awareness, interest, desire and action. The model assumes that we have to go through a sequence of events before the purchase can be made and everything starts with building awareness and interest. Living with Google this awareness and interest can easily and quickly take place. Various research studies suggest that over 80% of people carry out a Google search on a product that they are interested in before making the purchase. What people look for and find out on this journey can be messy. It depends what they are looking for and how they will use it. It is an occasion when the left hand of our brain (the emotional part) plays with the right hand side of our brain (the rational part). Jonathan Haidt, psychologist and Professor of Ethical Leadership at New York University, likens the relationship to that between an elephant and its rider. He suggests that for most of the time the rider of the elephant is in control. They know where they are going and signal this to the elephant. However, the elephant could have motives of its own and these can sometimes be a mystery to the rider. If the elephant insists on going in a particular direction, you will never quite understand the reasons why it does so. In decision-making this play between left and right hand of the brain can result in decisions that we post rationalise because frankly we don’t know what the heck happened.


The way that we explore and evaluate a decision will trigger actions that aren't always the same across a group of people. People interested in low prices will move in a different direction to those who are seeking quality and longevity from the product. Those who take comfort in recommendations from a well-known influencer may evaluate the purchase in a different way to those who dismiss such testimonials. As already stated, well-known brands can influence people who may know very little about the product but who trust the manufacturer because they know something of their reputation.


This knowledge of brands is truly critical in decision-making. Research by Google has shown that when people are asked to research products in different categories, a fictional brand which offers a better deal is frequently dismissed in favour of a brand that is known. This appears to especially be the case for breakfast cereal s, cars and detergents. On the other hand, someone buying car hire or a new sofa or possibly insurance can more easily be persuaded to buy a new brand, unknown to them but with a superior offering. What is going on here? It seems that the branding of sofas and the branding of insurance carries less emotional weight and brands attached to cereals and cars.


So, as with everything, the answer to how we make decisions is “it depends”. The decision-making process is always going to be messy because when we search for information to help improve our choice, we are always subject to bias. No matter how much research we do, there is always going to be a bias in favour of the brands we know. And the likelihood is we know far more confectionery and car brands than brands of sofas and insurance.