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The economic principle I’m exploring is “People generally respond to incentives in predictable ways.”

My research question to help me study the economic principle is “Does experimental marketing have a greater influence on consumers?”

The article published in Psychology Today titled, “More Effective Advertising” demonstrates this economic principle by arguing that experimental marketing, experience, and physical interaction play a pivotal role in better marketing and advertisements.

First, many companies may choose to use experimental marketing because it allows for people to experience their product in a completely new way. If you see a product on television you may just ignore it because you don’t exactly see how beneficial it may be. For example having a store on every corner will have consumers automatically assume that you have a great product. “According to CEO Howard Schultz, the reason that Starbucks doesn’t need to rely just on advertising is that it is in ‘over 16,000 neighborhoods around the world, in more than 50 countries, forming connections with millions of customers every day in our stores, in grocery aisles, at home, and at work.’”

Second, experience marketing is giving out free product to get your name out their and it allows people to how great their product is. This marketing strategy allows consumers to automatically associate your product with a certain action and this has worked very well for a company like Red Bull. According to Psychology Today Red Bull did the following, “The foolproof branding plan was to give hip, young, and influential college students free cases of the energy drink and encourage them to throw their own event, a lucrative tactic that cost the marketer next to nothing.”

Third, physical interaction may have a large impact on consumers. It allows consumers to touch, taste, or experience the product. This is a very impactful marketing strategy because now a consumer would already know that your product is good and therefore have a stronger inclination to purchase it. Psychology Today says, “We learn best by doing. That’s in part because your brain encodes the experiences more deeply through all 5 senses so they are more likely to become purchase habits that become second nature to you.” In my next blog post