Strategic Planning with the Framing Effect on Psychology and Marketing Framework

Framing Effect on Psychology and Marketing is a technique that enables better strategic planning in business.

First introduced by Tversky and Kahneman in 1981, the Framing Effect is used within sales and marketing strategy.

Psychological research has demonstrated significant changes in behavior depending on how a question or request is phrased. People generally prefer absolute certainty when a choice is presented positively (e.g., certain advantage, or risk of disadvantage); whereas people are risk-seeking when the choice is presented negatively (e.g., certainty of *no* advantage, versus risk of disadvantage)

A much cited example demonstrating the power of framing is provided by Kahneman and Tversky:

'Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as, follows: If Program A is adopted, 200 people will be saved. If program B is adopted, there is a one-third probability that 600 people will be saved and a two thirds probability that no people will be saved. Which of the two programs would you favor?'

The results were as follows: 78 chose Program A; 22 chose Program B. However, when the wording was altered so that the consequences remained the same but referred instead to the number of deaths (e.g. If Program A is adopted, then 400 people will die), the results were nearly reversed.

Fairhurst and Sarr (1996) described the following Framing Techniques:

• Metaphor
• Stories
• Traditions
• Slogans and catchphrases
• Artifacts (e.g., physical relics)
• Contrast
• Spin - to create a positive or negative connotation

Other Strategic Planning Frameworks

• 4P's Marketing Mix
• Seven S (7S) Management Framework
• AIDA - Attention, Interest, Desire, Action - Buying Process
• Ansoff's Matrix - Product-Market Growth Matrix - Expansion Strategy
• BCG Growth-Share Matrix
• Bass Diffusion Model - Product Adoption and Innovation
• Blue Ocean Strategy
• Choice Model for Decision-Making Behavior
• Competitive Advantage
• Core Competence - Collective Learning in the Organization
• Cost-Benefit Analysis
• Delta Model
• ERG (Existence, Relatedness, Growth) Theory of Motivation
• Experience Curve
• Framing Effect on Psychology and Marketing
• GE (McKinsey) Matrix
• Growth Phases
• Predicting Industry Evolution and Change
• OODA Loop - Observe, Orient, Decide, Act
• PDCA (Plan, Do, Check, Act) - The Deming Cycle
• PEST Analysis - Political, Economical, Social, Technological, Environmental, and Legal Factors
• Perceptual Mapping - Brand Marketing
• Porter's Five Forces
• Product and Marketing Positioning
• Product Lifecycle (Industry Lifecycle)
• Root Cause Analysis
• SWOT Analysis - Strengths, Weaknesses, Opportunties, Threats
• Technology Adoption Curve
• Value Chain
• Balanced Scorecard
• Benchmarking
• Customer Segmentation
• Pricing Strategy & Price Optimization
• Mergers and Acquisitions (M&A)