Market research aims to solve tough business problems and decisions through understanding consumer behavior. Given the complexity of human decision-making, this is easier said than done! Humans are not rational actors in most realms of our lives, including how we shop and what we buy. In other words, we don’t always have an unchanging set of preferences that we’re aware of and that we try to maximize for our own self-interest. That takes far more time and mental energy than we have, but we don’t recognize this and instead see ourselves as rational actors.
Daniel Kahneman’s life’s work – captured in his book, Thinking, Fast and Slow – shows that people generally think they are in control of their own decisions and can explain them rationally. But it’s well proven that people often do not act rationally nor do they make decisions logically. Consumers also frequently don’t remember exactly how they made a decision or why, nor do they remember all the parts of their experience – oftentimes consumers are biased by how they want to remember an experience rather than how it actually happened. Despite this, standard research relies heavily on talking with consumers using methods that require them to engage in deliberate and intentional thinking (System 2), but often, their decisions were made in the moment using a fast and intuitive method of thinking that they cannot access (System 1).
Below, we explore System 1 and 2 thinking in more detail, define Dual Process Theory, and touch upon a few practical research methods for both systems.
As Kahneman asserts, we can think of human behavior as a product of System 1 thinking and System 2 thinking. The Dual Process Theory (DPT) framework is a theory based on this two-system idea – the notion that humans experience their world (and the brain processes information) in two fundamentally different ways. Those two different ways in Dual Process Theory are associative thinking and rule-based thinking. Associative processes are fast, intuitive, and automatic (alluding to System 1 thinking). In contrast, rule-based processes are more deliberative (similar to System 2), and they require us to consciously apply a set of predetermined rules or criteria in order to arrive at a decision. These two systems complement each other – one cannot exist without the other, and neither one is better than the other.
Rule-based processes are often more accurate than associative processes, but they can also be more time-consuming and difficult to implement. This is why we often see people relying on their “gut feeling” instead of taking the time to carefully consider all of their options – it’s just easier! But this reliance on System 1 thinking can sometimes lead to suboptimal decisions, particularly when faced with complex problems that require thoughtful consideration. The best decisions are usually made when we use both types of thinking, as often using just one or the other may lead to wasted time, or a poor decision.
When buying a new vehicle, consumers would easily get overwhelmed with decisions if their sphere of consideration was every car available. Cars have so many different aspects from make, size, color, safety features, comfort features, price and many more that must be considered. Most consumers use System 1 thinking to narrow down at least one or two aspects of their decision. For example, if someone grew up in a household that always had one brand of car, they may be likely to only look at that brand when purchasing for themselves. That cuts the realm of possibility significantly to a much more manageable list. From there, a consumer can move into System 2 thinking to decide on things like the size of car they need and safety feature requirements they have to make a logical and informed choice. If the consumer only used System 1 thinking here, they may have ended up purchasing a car that ended up not being right for them whether that be size or features. On the other hand, if they only used System 2, they would likely waste a lot of time debating between every car on the market since the list would be too great.
Dual Process Theory is widely used in the field of psychology but has also been applied to other disciplines, including economics, political science, and marketing. In recent years, DPT has become an increasingly popular framework for understanding human decision-making – particularly as it relates to consumer behavior. After all, if we want to know why people buy (or don’t buy) certain products, we need to understand how they make decisions in the first place!
Let’s dive into understanding the subtle differences between System 1 and System 2 thinking.
In order to get the idea of System 1 thinking, we first need to familiarize ourselves with the concept of heuristics. Heuristics are mental shortcuts that allow us to make judgments and decisions quickly and efficiently. They are developed in a variety of ways from watching the Wizard of Oz and associating Kansas with tornados (availability) to stereotypes like believing someone to be a med student because they act like other med students we know (representativeness). Heuristics are a type of associative process, meaning they involve connecting two pieces of information together without any conscious deliberation on our part. Heuristics can be helpful in situations where we need to make a decision quickly, but they also have the potential to lead to mistakes.
System 1 thinking relies on a multitude of heuristics. For instance, you may have a negative association with suburban life, perhaps based on your experiences, the perspectives of your social circles, or how it appears in the media. You don’t necessarily think seriously about that, so when it comes time for house hunting, you “automatically” discard suburban residences from consideration – it’s a “no-brainer.”
Your decision-making becomes much easier than if you were to carefully consider homes in a range of areas and weigh the pros and cons for each location – suburbia included – to assess their relative merit. (That would be System 2 thinking, we’ll explore that further down.) So, are humans lazy in relying on System 1 thinking? Not necessarily – there is only so much time and cognitive capacity we have. We are continuously confronted with relatively routine questions on a daily basis.
What should I wear? What’s for lunch? What do I need from the grocery store?
Which applicant should I hire for a new position? which car is best for my family?
System 1 is most valuable as a time and energy saver – as humans, we have so many things that need our attention, have so many decisions to be made each day, that choosing a type of gum at the gas station is not something we want to spend a lot of time on. For these everyday questions, then, System 1 is our collective go-to. As Kahneman writes, “System 2 is much too slow and inefficient to serve as a substitute for System 1 in making routine decisions”.
Sometimes System 1 does not provide us with everything we need to make a decision we feel confident about, just as sometimes System 2 thinking would take too long. So when do we engage System 2 thinking? When the decision may be about a topic we have not dealt with much, if at all, before, or requires us to process multiple distinct topics at once. System 2 thinking is a more deliberative, logical form of thought that allows us to analyze problems in a more comprehensive and step-by-step manner. It’s the kind of thinking you do when working through a math problem or trying to solve a complex puzzle – you consciously think through each step in order to arrive at an answer or solution.
Analytical reasoning is a cognitive process that enables us to understand the relationships between concepts and to reason logically. It allows us to solve problems by identifying patterns and inconsistencies, as well as by generating hypotheses and testing them. One of the key advantages of analytical reasoning is that it helps us deal with uncertainty – when we’re confronted with something new or when information is incomplete or ambiguous, analytical reasoning allows us to make sense of it and generate possible explanations.
We want to use System 2 when we want to be as accurate as possible in our judgments and decisions. We also might engage in System 2 thinking when we need to make a decision that has multiple criteria, when we don’t have a lot of experience with the topic at hand, or when the stakes and outcomes of the decision at hand are high. In order to arrive at an optimal solution, System 2 thinkers will often break down complex problems into smaller chunks that can be tackled systematically. This approach is called “analytical reasoning”.
System 2 thinking is often used in business or policymaking contexts, where organizations need to make sound decisions that could have far-reaching implications.
System 2 thinking is often used in business or policymaking contexts, where organizations need to make sound decisions that could have far-reaching implications. Using this system, we are more likely to use research and evidence to support our decisions and judgments than to use emotions or heuristics, and we will seek out data and information that can help us understand a problem from multiple angles.
It’s important to note that neither system is better. People don’t consciously choose how to think about a specific problem, we intuitively know whether a snap judgment requires more thinking or not. From a research perspective, it’s important to understand which decisions are usually made with each system and how to engage in research in a way that allows you to capture both kinds of thinking. Let’s delve into a few methodologies that pertain to each system.
Here’s why all this matters to the field of market research. In asking respondents direct questions about things they don’t typically give much thought to (e.g. Why do you buy that brand of mayo? Why do you shop at GAP?) – we ask them to engage in System 2 thinking. This often occurs through focus groups, surveys, in-depth interviews, or online insight communities. These are valuable means of data collection but can be a bit biased or incomplete when used alone. Why? Because these methods rely on System 2 thinking and recall while a majority of consumers’ real-life decisions are made with System 1 thinking, even though we cannot articulate those decisions verbally. Without tapping into those instinctive System 1 decisions – which traditional methods may lack the ability to do – we might overlook what actually motivates consumer preferences.
Two examples of System 1 research methods include Online Metaphor Elicitation and ethnography. Both of these collect data without asking the respondent to answer a question rationally. It relies on “gut” decisions or in the case of ethnography, interprets behavior.
One method MDRG employs to bypass rational, System 2 thought processes, is Online Metaphor Elicitation. Online Metaphor Elicitation is a research method that uses online tools to allow respondents to answer questions using imagery rather than words. Respondents bring images representing their thoughts and feelings to an interview where they are then asked to describe the image selected and explain why they chose it. The combination of these data points is then analyzed using metaphor theory.
Metaphor theory was introduced to research by Harvard professor, Gerald Zaltman, who theorized that 70% of human interactions can ladder up to 7 Deep Metaphors: Resource, Journey, Control, Container, Balance, Connection, and Transformation. In fact, there are up to 7 metaphors per minute of speech in our interactions. People often use metaphors to express complex emotions or ideas that they can’t easily articulate in words and images. Using Zaltman’s 7 Deep Metaphor framework in analysis, we can tap into people’s intuition and unconscious thought processes, in order to understand the deeper meanings behind their responses.
The main benefit of this methodology is that it allows researchers to get deep and gain insights into people’s subconscious thoughts and feelings and how they view the world around them.
We can look at the finance world for an example of a metaphor in action. Think of the words “cash flow”, “frozen assets”, or “underwater mortgage”, all of these use the idea of money flowing. We communicate the idea of money going in, out, what is owed, etc. through the metaphor of liquidity. When someone says “I’m struggling to keep my head above water” we know exactly what they mean. Ultimately, water ladders to the deep metaphor of resource.
An example of metaphor theory in action in advertising is represented in the tire category. In these ads, two different metaphors are used to sell the same product.
1.The Michelin ad uses the container metaphor. The implication is that with the baby in the tire, the brand keeps you and your loved ones safe. The ad copy didn’t need to say that, because the visual brought the container theory to life.
2.The Pirelli ad is more literal but is another example of using a metaphor in advertising. In this instance, the deep metaphor is control. It feeds on consumers’ need to control their environment.
This is a clear example of System 1 in action. Consumers may not be able to consciously articulate why these ads resonate, but their subconscious generates a response nonetheless. This type of research can be extremely helpful in understanding how people feel about a brand or product, and what emotions they associate with it.
Another method MDRG uses is ethnography – a qualitative research method that uses observation of individuals in their own environment to understand behavior. It involves studying people in their natural environment and trying to understand their way of life and how they interact with one another. In market research, ethnography can be used to understand consumer behavior and preferences since it relies on our observations of what consumers do in the moment (their behavior), rather than on what they say they do or want (their attitudes).
One of the main benefits of ethnography is that it gives us a more holistic view of consumer behavior. It allows us to see how people interact with each other and with their environment, as well as how they think and feel about different aspects of their lives. This can be extremely valuable in understanding why people make the choices they do. And by being in a comfortable environment (for example, a participant’s home), they are likely more forthcoming with their opinions than in other settings. In interviews or focus groups, for example, respondents may tell us what they think we want to hear so they are not perceived negatively. However, this phenomenon of “social desirability bias” emerges less in System 1 methods and, as a result, we get a truer sense of consumer behavior.
One example of this is understanding individuals’ gift-giving behavior and why they gift certain things to certain people. This could be based on the relationships they have with someone (for example, giving a more personal gift to a friend than to a colleague). People also often use gifts as a way to express their own identity. We might give someone a gift that reflects our own interests, or that we think will be seen as cool or fashionable by the recipient.
In some cases, we also use gifts as a way to show status. For example, someone might give a more expensive gift to their boss than they would to a friend. Ethnographic research on gift-giving helps us to understand the complex social and cultural factors that influence people’s decisions about what to give as a gift through prompting System 1 thinking. These decisions are not based on research or reasoning but rather on “gut feeling”.
Another example is research about the way consumers shop the grocery store for plant-based chicken. A research plan was created to understand how people think and feel about shopping for plant-based chicken. Where do they go for these products? What types of brands and claims are they looking for on the packaging? Consumers were observed in their natural environment – in this case, their preferred grocery store. They walked the aisles. Some gravitated towards the frozen section and others the refrigerator spaces. They scanned areas for their preferred brand and sometimes picked up multiple items to cross-shop.
The findings showed that consumers are often confused about where to go in stores for plant-based products including chicken. It also showed that consumers are buying plant-based products based on a number of factors. They didn’t really know how to distinguish which option was preferred among fresh or frozen but they did want a good value. Consumers, many of whom were new to the plant-based meat category also preferred brands they were aware of. This research provides valuable insights into how people think and feel about shopping for plant-based chicken, and what emotions are associated with it. Ethnography is essential in understanding how people think and feel about a brand or product. It allows us to see the world in real-time through our consumers’ eyes and understand their behavior in a broader context.
It would be wrong to have a singular focus on System 1 methods. After all, one set of methods is no better than the other. To achieve a comprehensive understanding of consumer behavior, both are necessary. System 2 research methods are those that rely on conscious thought and reason. As noted, researchers typically use surveys, focus groups, in-depth interviews, and online insight communities to gather data.
Two examples of System 2 research methodologies include focus groups and traditional quantitative surveys. Online surveys allow us to reach a large number of respondents quickly and easily, while focus groups give us the opportunity to observe how people interact with one another and probe deeper into their thoughts and feelings about a particular topic.
Focus groups are a qualitative research method that brings together a small group of respondents (usually six to eight) to discuss a particular topic (a product, brand, or advertising campaign). The focus group moderator will ask questions, generate discussion, and probe deeper into responses. These groups are valuable for understanding different perspectives on a given topic, and data can be much richer when participants trigger ideas or opinions in other respondents (“I never thought of that” or “that makes me think of…”).
Because focus groups ask respondents questions about why they like or buy or use a particular product or brand, they engage System 2 thinking and allow researchers to explore the conscious factors behind consumer behavior.
For example, in the 1950s, American automobile manufacturer Chrysler was having trouble selling their convertible model. It was then discovered through focus groups that housewives influenced their husbands’ decisions on what type of car to buy. While men preferred youthful, luxury cars, women preferred sedans. Chrysler then adapted their advertising strategy and managed to increase sales. As a result, it was discovered that women buy cars at the same rate if not more than men, resulting in a major shift in how vehicles are designed, marketed, and sold.
Focus groups that are conducted properly and ask the right questions can yield hugely beneficial and valuable information for a company, not to mention they allow us to explore people’s conscious thoughts and reasoning about a particular topic.
A quantitative survey is a research method that uses primarily closed-ended questions (questions with fixed responses) to gather data. This type of survey is typically administered through the internet, making it convenient and easy for respondents to complete.
One of the benefits of using quantitative surveys is that they provide us with large amounts of data that can be analyzed statistically. They allow us to ask questions in a structured format and get specific insights into how people think about a particular issue. Respondents have time to think about their answers and engage System 2 thinking. Quantitative surveys are often used to understand the demographics of a target market, assess brand awareness and loyalty, and track changes in consumer behavior over time.
One place where surveys should be done is when researchers are trying to make decisions that require understanding how impactful a specific feature or message is for a given product. Using cell phone providers as an example, a survey could be done to provide rich data on what parts of a phone plan are most important – data, price, coverage, calls/texts, etc. It could also be important in understanding how big a group you’re looking for is (i.e. if you’re targeting a specific consumer segment for a new product launch and want to understand how many people fall in that segment).
However, it’s important to be aware of the limitations of this methodology. Surveys tend to be less effective at getting respondents to share their thoughts and feelings about a topic. And, because they rely strongly on closed-ended questions, they may not provide us with the depth of information that we need to fully understand consumer behavior.
The System 1 and System 2 framework holds great potential for explaining human behavior, and the market research field – in particular, MDRG – has leveraged its explanatory power to better inform clients’ decision-making. However, while the value of this framework lies, in part, in its simplicity and intuitiveness, there is an open question as to whether it can capture additional layers of complexity. For instance, how best can we account for the role of context (our environment, the people we’re around, our status in society, etc.) and time (how we – including our behaviors – evolve over years and decades) in impacting our System 1 and 2 thinking?
Although there are several questions left to answer, Kahneman’s framework reveals the importance of utilizing research methods that engage both System 1 and System 2 thinking. Doing so provides a well-rounded, more holistic view of how consumers think, feel, and behave. By understanding the world through our consumers’ eyes, we can create products and messaging that resonates with and appeals to them on both a conscious and subconscious level.
https://academic.oup.com/jcr/article-abstract/44/2/276/3858915?redirected From=fulltext
https://journals.sagepub.com/doi/abs/10.1177/0735275113489806Kahneman, Daniel. Thinking, Fast and Slow. Farrar, Straus, and Giroux: 2011.
https://www.thescienceofpersuasion.com/single-post/2019/01/23/how-system-1-and-system-2-thinking-is-used-in-consumer-neuroscience
https://www.research-live.com/article/features/five-focus-groups-that-changed-the-world/id/5018642
