Do We Overvalue Our Creations? – The IKEA Effect


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A marketing case - study: The curious case of Betty Crocker

There’s a famous example that is often quoted by marketing veterans. In the 1950s, General Mills launched a line of instant mixes under the brand name, Betty Crocker. All the baker had to do was to add some water.

Despite all the conveniences which appear on paper, in reality, the product wasn’t with great enthusiasm. After research from external experts, it was found that the reason for this reluctance was not its taste, but the feeling of guilt.

A cake carries great emotional significance for the baker and symbolizes a special occasion. Making a birthday cake from “just a mix” hardly qualifies someone to be called a baker (pretty much in the same way that preparing a bowl of Maggi doesn’t mean someone is deemed to be a cook).

To resolve the issue, the manufacturers left out some of the ingredients from the mix, which allowed the baker to add them to the mix. This feeling of putting some hard work into creating something (in this case, a cake) was enough to skyrocket the sales of Betty Crocker.

The IKEA Effect

Dan Ariely, a professor of Psychology and Behavioural Economics at Duke University, has explored this phenomenon in his book, 'The Upside of Irrationality'.

The author has reflected upon his experiences while building a self-assembly bookshelf he purchased from IKEA. Hence, he named this effect – The IKEA Effect, which has been described as “the overvaluation resulting from labour”.

The basic idea is this: an investment of labour leads to attachment, and an increase in effort can increase the perceived value.

Pride of creation and ownership is deeply ingrained in human beings. When we make a meal from scratch, we smile and say to ourselves: “I created this, and I am proud of what I just made!”.

In those moments, we are even ready to forgo the flaws that are visibly present, thus blinded by the appeal of our creation.

Based on his team's different experiments, Professor Ariely found that creators tend to see their work as almost as good as the work of an expert in the field. The effort involved in the building process is crucial in the process of falling in love with our creation.

Use cases in businesses and life

This insight into human behaviour has been used extensively by businesses across the world. You see in the self-assembly furniture at IKEA or the sandwiches created at Subway, wherein the customers are involved in the preparation process as they choose the different sauces and ingredients.

Fundamentally, this phenomenon partly explains the parents’ love towards their child, and why they tend to overvalue his/her abilities.

Although PepsiCo’s Kurkure doesn’t have any such customizable abilities, they perfectly summed up this phenomenon in just one line: “Tedha Hai Par Mera Hai”.

Written by - Snehil Kesarwani

Edited by - Chhavi Gupta

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