Marketing Insight: Kahneman's and Barden's Dual System Theories

Dual System Theory
of Daniel Kahneman
and Phil Barden

I have always been interested in how the human mind works and what drives our behavior. That's why I recently became fascinated with reading books on marketing and psychology.

I was especially captivated by the work of Daniel Kahneman and Phil Barden. In his book "Thinking Fast and Slow," Kahneman describes two systems of thinking - the intuitive System 1 and the logical System 2. And in "Decoded: The Science Behind Why We Buy," Barden talks about the "pilot" and the "autopilot."

I realized these are essentially the same thing. The autopilot is our instincts and emotions, while the pilot is logical thinking. Interestingly, they work in tandem.

For example, when I walk through a supermarket, my gaze first catches on a bright package or appetizing smell - that's the autopilot at work. But then the pilot kicks in and starts analyzing - is it worth buying this product, is it too expensive?

The same happens with brands. When I see the Starbucks logo, the autopilot immediately elicits positive emotions - aromatic coffee, cozy atmosphere. And the pilot then decides if I'm willing to overpay for the brand.

Understanding how these two systems operate is a key point in marketing. Companies try to create an attractive "framing" for the product to appeal to our autopilot. But it's also important to logically convince the pilot that the purchase makes sense.

The
Systems
of
Thinking
in Action

System 1, or the "autopilot," represents our intuitive reaction to the outside world. It quickly makes judgments and perceives external factors like product design or store atmosphere. This process happens instantly and subconsciously, and we often don't even realize it.

System 2, or the "pilot," represents a more conscious, analytical approach. This system requires effort and concentration. The pilot analyzes specific product characteristics, makes comparisons, and evaluates them.

It's important to understand these two systems don't act independently of each other. They interact and influence our decisions. For example, when choosing a product in a store, the autopilot may draw our attention to an attractive package or aroma, while the pilot will analyze the price and quality.

In marketing and advertising, understanding this interaction can be key. Knowing how both systems influence consumer decisions, marketers can create effective strategies that appeal to both the intuitive and rational sides of consumers.

The
Framing Effect
and
Brand Influence

The "framing" effect is a phenomenon Phil Barden describes in detail in his book "Decoded: The Science Behind Why We Buy." It refers to how external factors and context influence the perception of a product or service.

Imagine you are in a supermarket aisle facing the coffee section. One coffee tin stands out with stylish packaging and is under bright lighting. Another tin has modest branding and sits in a less lit corner. This is the framing effect – the surroundings and design influence your perception of the product.

Now imagine one tin belongs to a famous brand like Starbucks, while the other is from a local cafe without a well-known name. Regardless of the actual coffee quality, the Starbucks brand creates a sort of "framing" for its product.

The Starbucks brand is associated with the atmosphere of cozy cafes, stylish design, and high quality. So many consumers are willing to overpay for Starbucks coffee, even when a similar coffee at a local cafe costs less.

This example shows how a brand can create "framing" that appeals to the consumer's System 1 or autopilot. The emotions and associations tied to the brand can alter the perception of the product and influence the purchase decision.

For marketers, this means brand-building and creating positive associations can be a powerful tool for influencing consumer behavior. Understanding how brand interacts with System 1 allows developing marketing strategies that account for this "framing" effect.

Thus, the framing effect and influence of brand can significantly impact consumer decision making.

Interaction Between
the Pilot and Autopilot
in Marketing

We've already looked at the two systems of thinking - the "pilot" and the "autopilot" - and how they influence consumer decision making. Now let's discuss how these systems interact in a marketing context.

The pilot is the conscious system that analyzes specific product characteristics like price, quality, utility. The pilot is similar to System 2 described in Daniel Kahneman's "Thinking Fast and Slow." It's the effortful, aware system.

The autopilot is the intuitive system that instantly reacts to external factors and creates "framing" around the product. This can be packaging design, store atmosphere, music, scents, and other stimuli. The autopilot is akin to Kahneman's System 1 – the fast, emotional system.

It's important to understand the pilot and autopilot work closely together when making purchase decisions. Imagine you are standing in front of a shelf with a product, and your gaze falls on it. At this moment, your autopilot starts evaluating the "framing" - the design, color, brand associations. Emotions and first impressions are formed quickly and subconsciously.

Then your pilot kicks in. You start analyzing the price, quality, usefulness of the product. The pilot requires effort and concentration, and at this point you may ask yourself questions like "Do I really need this?" or "Can I find a better deal?"

The final purchase decision is shaped at the intersection of the pilot and autopilot's work. If the "framing" elicits positive emotions and associations, the pilot is inclined to confirm the choice. But if the pilot finds downsides like a high price, it may object.

For marketers and brands, it's important to understand this interaction. Creating positive "framing" around a product, backed up by conscious arguments, can significantly increase purchase likelihood. Brand strength and external design can convince the autopilot of the right choice, while price and product characteristics convince the pilot.

In marketing, it's crucial to work with both consumer thinking systems, accounting for their interplay. This allows creating the best conditions for a successful sale.