It is your best friend’s birthday and she has invited you over for dinner and a small get together with her closest friends. You accept the invite with great joy and immediately panic on what to bring her. After giving it a bit of thought, you remember that she has a love for red wine, bingo! You rush to the nearest package store in search of the perfect bottle. As you scan the aisle of hundreds of different types of red wine and different brands, you see Apothic Red. “Perfect, this is our favorite!” You go to grab it and notice that it is only $12. Hmm, you quickly question your selection and decide that there must be a superior bottle on the shelf that is worth more than $12. It is her birthday and all. You look up and see a nice bottle with a label that reads: 2012 Peju Merlot Napa Valley. You scan down and see it is on sale for $99.99. You quickly decide that this wine must be amazing. Since this is your best friend and you want to be the best gift giver at the dinner, you decide to make the purchase. You arrive to her apartment and while dinner is cooking you all decide to give her your special birthday gifts. She opens a few envelopes enclosed with kind cards and Starbucks gift cards. She then gets to your gift. She reaches into the bag and pulls out your pricy bottle of wine and shrieks with excitement, “You know how much I love Merlot!” she exclaims. As dinner is being served your friend runs into the kitchen and you hear her pop open your bottle of wine. She comes out with two glasses and gives you one with a smile and a wink. After a hardy cheers filled with well wishes and happy birthdays, you take a sip from your glass and your eyes light up. “Wow! This is the best thing I have ever tasted!” You finish your glass and follow your friend into the kitchen where she thanks you for coming and for her bottle of wine. “Is it not the best wine you have ever had?” you ask with excitement. “It definitely isn’t your typical bottle of cheap wine” you say with a smile, knowing that you paid a pretty penny. “I haven’t tried this kind, but I’m so excited to taste it!” she responds. Puzzled, you look at the countertop and see that your bottle is sitting there unopened. “Oh, well what wine did we have at dinner?” you ask. She laughs and says “only our favorite.” She proceeds to grab the bottle of Aphotic Red behind her and pours another glass. You are at a loss of words. How could the wine taste so different, so much better this time than ever before? You pour another glass of Apothic Red and all of a sudden it doesn’t taste quite as good. What happened here? Why did the wine taste so much better when you thought you were drinking from a $100 bottle instead of a $12 bottle?

Your expectations mold your reality. Your perception of brands, products, and even people are all framed by the packaging, the price, and the appeal that comes along with it. Unless you have an advanced pallet and you are a wine enthusiast, you would not be able to tell the difference between an expensive bottle of wine and a cheap bottle.

The effects of expectations were examined in an experiment conducted by Leonard Lee (Professor at Columbia Business School), Shane Frederick (Professor at MIT), and Dan Ariely (Professor at Duke University). In the study, the trio of researchers set up shop at a bar located on the campus of MIT. In the study, the theory being tested was whether or not people’s expectations influenced their views on following events. In this scenario the indicator being measured was whether the bar customer’s expectations for a particular type of beer would mold their perception of the taste. As students began flooding into the bar after a long day of class, Leonard would approach them with an offer of two free samples of beer and whichever beer they enjoyed the most he would buy them a glass. One sample would be Budweiser, and the second sample would be an “MIT Brew” that was simply Budweiser with two drops of vinegar for each ounce of beer. However, the participants would not know this. The first student that Leonard approached accepted the offer and was presented with two pitchers, one labeled A and the other labeled B. Leonard poured a glass of each and the student carefully tasted both. After evaluating his options, the student chose pitcher B that contained the “MIT Brew.” Leonard approached the next participant and instead of simply offering her a taste of label A or B, he went into more detail and informed her that one was a standard commercial beer and the other was a beer that had been altered with drops of vinegar. She sampled pitcher A containing the Budweiser and nodded with approval. She then tried pitcher B and immediately wrinkled her nose with disgust. Needless to say she chose pitcher A for her free glass of beer. After testing hundreds of participants, there was a common trend. Without knowledge of the ingredients of the two beers, most all participants chose the “MIT Brew.” However, when they knew they were drinking beer laced with vinegar they preferred the Budweiser.

After this study was conducted Ariely decided to reframe this experiment, this time with coffee. He set up a popup coffee shop at MIT along with his colleagues. The question poised to the participants was should MIT begin selling this roast of coffee in their cafeteria. Along with the coffee, he would offer traditional add ins such as milk, half-and-half, sugar, etc. Alongside the traditional condiments were some odd ones such as cloves, nutmeg, orange peels, and sweet paprika. The way the condiments were presented were frequently altered from Styrofoam cups to fancy metal containers and brushed metal trays. As the students drank the coffee, they would fill out a survey. While no one dared to try the odd condiments in their coffee, there was a unique finding in the experiment. If the odd condiments were presented in the fancy containers and trays, the participants were much more likely to like the coffee and also more likely to pay a higher price for it.

Many companies do a great job of managing your expectations to value their product highly. Hundreds of millions of dollars are spent annually on research to determine how to get you to desire their product and how to shape your thoughts about the brand. It is important for you to realize when your thoughts on a product are your own versus when they are thoughts you have been fed to believe. Consumers control the market however marketers often times control the consumers.

What products do you feel are overpriced based off of hype? Have you ever overvalued a product or service based on price or presentation alone? If so, share your stories in the comments below and follow the blog to be the first to know of a new post.

One thought on “ How Expectations Shape Your Reality ”

  1. Great read! Just a couple of comments. “Nothing runs like a Deere”. “Porsche….there is no substitute “.
    Everyone knows that Kia autos suck because they are built in Korea. I often wonder why they offer such a great warranty….


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