Cognitive Biases in marketing are key to make marketing campaigns successful and are

strategically applied by firms at various consumer touch-points to directly influence

consumer decisions while interacting with products.

What is Cognitive Bias?

Let us take an example to understand.

Is a person more likely to die of a shark attack or by getting hit by a falling

plane part? If you said to yourself, “Of course shark attacks!” then you have fallen prey to
what they call a cognitive bias

Cognitive bias is a predictable pattern of error in thinking that we exhibit

while trying to process the information that is presented to us.

EdTech Industry in India

An investment of more than $1.5 billion has been raised by Indian Edtech
firms like Vedantu, Byju’s, Unacademy etc in 2020 alone, which is more than
the last 5 years combined. There also have been 7 acquisitions in this sector
in just the first 6 months of 2020 and 3 of which were done by Unacademy.

1. Halo Effect Bias

Byju’s made a grand entry into the market with Shah Rukh Khan as its brand
ambassador. In fact, according to the Indian Institute of Human Brands (IIHB) report,
Byju’s ads featuring SRK was rated as the most recalled celebrity ad during the ICC
World Cup 2019.

The answer is the Halo effect bias. It is the tendency of people to allow the
positive impressions of one person/brand/product to positively influence
their opinion onto something else.
In this case, SRK’s likeability influences the opinion people have for Byju’s.
Following suit, Vedantu roped in Aamir Khan as their brand ambassador recently.
Given that Aamir Khan has been a spokesperson for education in various ways, he
makes for a good choice and can bring his credibility to the brand.

2. Survivorship Bias

Survivorship Bias - error of focusing on the people/companies who were

successful at something and overlooking those who failed due to their lack of
visibility. Eg, White Hat Jr’s featuring Bill Gates and Mark Zuckerberg in their
childhood to convey coding at a young age leads to more chances of success.

3. FOMO

Fear Of Missing Out - Creating anxiety for missing out on something. Eg,
Edtech companies creating FOMO for parents by promoting they make kids
smarter and increasing their chances to score more.

4. IKEA effect

IKEA Effect - tendency to place a disproportionately high value on the things

that you create even though others might not perceive it to be valuable. Eg,
White Hat Jr allowing kids to create their own game apps.

5. Mere Exposure effect

Let's say you have wanted to buy a new phone for a while and you go to an
eCommerce site and search for a smartphone. Hence begins the chase for
exposure. Every website you visit, every social media platform you browse, you start
seeing phone ads everywhere. If only companies could advertise in our dreams!

Let's see a mere exposure cognitive bias example in the Edtech industry, a Bright
Eye VC report states that 12 global public Edtech companies on average had their
marketing budget at 25% of their revenue. By overspending on marketing these
companies overexpose their offerings to customers.
Right from TV ads, social media ads salespeople visiting the homes of the
customers, companies like Byju’s leave no stone unturned to be in the face of the
customer.