Which of the following is an example of how businesses might use cognitive biases to their advantage in marketing strategies?

• A. They ensure all product information is presented in a completely neutral and unbiased manner.
• B. They use the anchoring bias by displaying a higher original price next to a discounted price to make the deal seem more attractive.
• C. They discourage customers from making quick decisions by providing excessive amounts of information.
• D. They avoid using any emotional appeals in advertisements to prevent influencing consumer decisions.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand what cognitive biases are — they are systematic patterns of deviation from norm or rationality in judgment, which often influence decision-making unconsciously.
2. Step 2: Identify the specific cognitive bias mentioned in the problem, which is the anchoring bias. This bias occurs when people rely heavily on the first piece of information (the 'anchor') they receive when making decisions.
3. Step 3: Analyze how businesses might use the anchoring bias in marketing by presenting a higher original price next to a discounted price, making the discount appear more attractive and influencing customers' perception of value.
4. Step 4: Compare this strategy to the other options, noting that neutral presentation, discouraging quick decisions, or avoiding emotional appeals do not leverage cognitive biases to influence consumer behavior.
5. Step 5: Conclude that using the anchoring bias by displaying a higher original price next to a discounted price is a clear example of how businesses exploit cognitive biases to their advantage in marketing.