Decoded: The Science Behind Why We Buy By Phil Barden
We have a new entry for our book club! This one comes from Adam Lunt, who had the pleasure of reading Phil Barden’s book Decoded: The Science Behind Why We Buy.
This book is aimed primarily at those who have an interest in marketing. However, it will also appeal to anyone interested in brand strategy, psychology and behavioural economics.
About Phil Barden
Phil Barden is a proven marketer with over 25 years of experience, including senior and international roles at high-profile companies such as Unilever, Diageo and T-Mobile. Fascinated by the insights from decision science and by the value these can bring to marketing, he quit his post at T-Mobile in order to immerse himself in this new field. This book introduces this approach and provides a framework for how it can be applied, covering brand strategy, positioning, and interactive media.
Outline of Decoded
This book introduces this approach and provides a framework for how it can be applied, covering brand strategy, positioning, and interactive media.
The book talks a lot about System 1 & System 2 thinking, which is based on the work of Daniel Kahneman. Kahneman believes that System 1 relates to perception and intuition and involves fast decision-making, which uses little energy. Whereas System 2 is a slower, more thought-out decision-making process, which consumes more energy. Essentially, all of the biggest and best brands are processed by System 1 thinking and bypass System 2, meaning consumers don’t have to think about decision-making – they just do it.
First choice brand effect & Decision Science
In a study which involved looking at two brands, neuro-economists looked at brain scans of respondents who had been shown 2 different brands, where one of the images respondents’ were shown was their favourite brand in that category. This study uncovered two things. Firstly, when shown their favourite brand, brain activity was different when compared to their non-favourite brand. The brain showed much less activity in areas related to reflective thinking, called cortical relief. Secondly, this cortical relief only happens with respect to a number one brand – even a second-placed brand doesn’t trigger this effect. This effect causes quick decision-making and needs less thinking, which leads to intuitive decision making. This highlights the need to be the number one choice and the ‘go-to’ brand or service.
All of our decisions are made via a complex series of related senses, such as perception, smell, taste and so on. All of these perceivable signals ‘frame’ the way we make our decision. For example, subtle changes in signal (such as the shape of a jar or bottle) can have a massive impact upon how a product is perceived and, in turn, on the overall product experience. We’re not aware of this process occurring as it is an implicit reaction and involves both the autopilot (system1) and pilot (System 2) working together. This is relevant for brands as it allows them to ‘frame’ their offering, which in turn has an impact on how a product or service is costed. As an example, ‘Voss Water’ has created a ‘frame’ that their product is an essential accessory due to the shape of the bottle, and the purity of the water, this enables them to charge a premium for their product. This ties into brand equity, as the higher a brands equity, the more they are able to charge for their product.
I found Decoded really interesting and highly recommend it. It provides both theory on the subject as well as real-life examples of how it can be applied, which really help to bring the ideas to life. It gives a lot of food for thought and, given the impact it had on Philip’s own career, this is a must-read for anyone in marketing or with an interest in brand and brand strategy. If you like this book then we would suggest you also read The Choice Factory by Richard Shotton.