How Wellness Brands Can Navigate Expectation Assimilation and Price Relativity

When you sit down to a healthy meal, perhaps a salad for lunch or a green juice for breakfast, you aren’t expecting to have the tastiest meal of your life, right? We typically pick a healthy meal option to feel better, boost energy, or support specific health goals. We’re not expecting to indulge in the best meal of our lives – it's a tradeoff.

Similarly, when you’re told something is unhealthy, your expectations are set in a different way. We expect it to be really, really tasty, or we’d be disappointed.

This is a great example of expectation assimilation – an important phenomenon where our expectations about an experience can influence how we perceive that experience. You have expectations about something before trying it and it becomes a self-fulfilling prophecy. And, you go and look for evidence to prove that assumption.

A similar concept related to expectation assimilation is price relativity – a concept rooted in consumer psychology. Price relativity uses relative price in the market to make your brand and offer seem much more. This strategy often plays a crucial role in shaping consumer perceptions in the wellness industry.

How can wellness brands navigate the balance between setting realistic expectations and delivering on promises? How can they leverage price relativity to position their offerings as not just commodities, but essential and important solutions to consumer needs?

By understanding how these factors work, you can develop strategies to overcome potential challenges and effectively position your health and wellness brand for success.

Expectation Assimilation and Self-Fulfilling Prophecies

Expectation Assimilation is a psychological phenomenon that we’ve all experienced at some point in our lives. We all have expectations, or preconceived notions, that can influence our perception of reality more than reality itself. It’s an important concept in the world of marketing and branding and can help companies shape consumer experiences. It’s all about setting expectations

How It Works

Our brains love routine and naturally gravitate towards coherence and consistency. When we encounter something new, whether it’s a product, service, or situation, we subconsciously compare it to our existing knowledge and expectations. Without even realizing it, our brains look for ways to “fill in the gaps” by subtly adjusting our perception to align more closely with our original expectations.

The Red Bull Effect

Red Bull, a popular energy drink, was inspired by a Thai drink called Krating Daeng. While its functionality was the key selling point (energy!), the taste is a little medicinal – slightly sweet and syrupy.

As Red Bull gained traction and explored expanding into Western Markets like North America, market research indicated that consumers generally disliked the unique flavor. Instead of reformulating the drink, Red Bull leaned into it. And here’s where the expectation assimilation comes into play:

• They heavily leaned into messaging around its functional benefits and ability to boost energy, alertness, and performance. (Ahem, “Red Bull Gives You Wings.”
• Taste: The slightly unpleasant, syrup-y flavor reinforced the perception of potency. It fits into the pre-existing mental framework of a product that would provide a jolt of energy. Consumers think to themselves, “Well, if I want energy and alertness, I need to tolerate this taste.”

Red Bull’s unique approach proved successful. The unpalatable taste became a sort of badge of honor – it signaled to others that you were consuming something powerful and effective, differentiating itself from typical sugary soda options.

By setting up an expectation of functionality and unconventionality, the less-than-ideal taste was not only tolerated but became associated with the desired effect of the product.

Buckley’s Cough Syrup

Similar to Red Bull, Buckley’s Cough Syrup, a Canadian brand, made a name for itself through a bold marketing strategy and embraced its notoriously awful taste. In fact, the messaging for their campaign was centered around, “It tastes awful. And it works.”

At the time, cough syrups often tried to mask their medicinal taste with artificial sweeteners and flavors. But Buckley's took a different approach, admitting that their syrup tasted bad, instead of hiding it. They believed this honesty would resonate with consumers and position their product as more effective than its competitors.

The campaign was successful. Like the Red Bull Effect, consumers often associate an unpleasant taste with powerful medicine. By owning the “awful taste,” Buckley was able to stand out from its competitors and solidify its place in the marketplace as an effective cough medicine. It helped people focus on the benefits and solving common cold and flu problems like soothing a cough fast. While it may seem counterintuitive, this marketing campaign shows it’s okay to “own” your weakness (in this case, awful taste) in order to build trust with the consumers.

The Bottom Line

Remember, expectation assimilation shows that marketing isn't just about the objective qualities of a product, it's about carefully managing consumer perceptions. By subtly influencing expectations, companies can sometimes turn perceived flaws into strengths or reinforce desired attributes.

Tips for Overcoming Expectation Assimilation

While expectation assimilation can be leveraged strategically, like in the Red Bull and Buckley examples, it can also pose challenges for brands in the health and wellness industry. Consumers often associate healthy products with less desirable taste or experience, potentially hindering their adoption.

So, what can brands do?

It may feel counterintuitive, but when given the option to focus on health claims or taste, focus on taste.

In a 2006 experiment led by Raj Raghunathan, a professor at McCombs School of Business, he found that people assume healthy or diet foods to taste worse.

Raghunathan invited a group of diners to sample a selection of Indian food and drink. Half of the guests were told that the lassi (a yogurt drink) was healthy, while the other half were told that it was unhealthy. When the guests later rated the taste, those told the lassi was unhealthy scored it 55% higher than the others.

Since people assume “healthy” foods taste worse, what can brands do?

Well, a 2017 study led by Bradley Turnwald at Stanford University suggests an alternative. Turnwald created menus for a cafe that sometimes emphasized the taste of the dishes, for example ‘twisted citrus-glazed carrots’ or ‘dynamite chili and tangy lime-seasoned beets.’ On other occasions, he described the dishes in terms of their healthiness, such as ‘carrots with sugar-free citrus dressing’ or ‘lighter-choice beets with no added sugar’.

He then monitored the effect on sales. The descriptions that focused on taste boosted sales by 41% compared to those emphasizing nutrition.

So, if given the choice, tailor the marketing message to touch on the consumer’s senses and focus on taste, rather than health claims. Be sure to use descriptive language that paints a picture for the consumer.

To reinforce your message, you can use social proof or leverage influencers to vouch for the taste/effectiveness of your products.

Price Relativity in the Health and Wellness Industry

Ever wonder why health products can justify a higher price point?

People don't behave like rational calculating machines. They aren’t doing mental math to work out a fair price in their head relative to your product or service. Instead, they are using little mental shortcuts to compare your product to a benchmark in their brain.

This is known as price relativity. It suggests that consumers judge the value of a product or service based on its relation to other options in the market, not just its absolute cost. In simpler terms, it's not just about how much something costs, but also how it compares to similar offerings.

Let’s explore how Red Bull used price relativity in the marketplace.

Red Bull is priced significantly higher than traditional soft drinks like soda or juice. However, it's not directly competing with those products. Instead, Red Bull positions itself in a different category – energy drinks – and justifies its premium price by offering unique benefits like increased energy and focus.

The energy drink brand intentionally avoided using a standard 330ml can. Instead, they opted for a smaller, taller can with a distinct design. This visual differentiator disrupted the price comparison consumers would instinctively make with familiar soft drinks. It allowed Red Bull to charge a significant premium, which consumers may not have been willing to pay if it perceived it as similar to existing options.

Furthermore, by emphasizing its unique functional benefits (energy! focus!), Red Bull was able to justify the premium price beyond just the packaging.

Tips for Apply Price Relativity to Health and Wellness Brands

If you’re in the health and wellness space, here are four actionable tips for leveraging price relativity to solidify your place in the marketplace.

1.   Emphasize your Unique Value Proposition:

Differentiate yourself from competitors by emphasizing the unique features and benefits that set you apart from others. Is it organic sourcing? Sustainable practices? Specific features or benefits like Red Bull’s increased energy and focus? Focus on these key characteristics to justify a premium price in the marketplace.

2.   Create Value Tiers:

If it makes sense for your business, you can cater to different budgets and needs by offering multiple product lines with varying price points. Maybe your medical spa that offers monthly packages with unique offerings. This gives consumers the flexibility to choose what they are willing to pay for.

3.   Consider the Entire Experience:

Similar to the value proposition, we challenge you to think beyond just the product or service and extend the value proposition to the entire customer experience. Do you offer personalized consultations? Delivery? Exceptional customer service? What about your experience helps you justify a higher price point compared to competitors who solely focus on the product?

For example, Noom, a weight loss program that pairs users with a personal coach, can justify a higher price point than traditional diet plans because of its personalized approach and 1-1 coaching sessions.

4.   Packaging and Branding: First impressions are everything – Develop clear brand standards, high-quality (or unique!) packaging, and clear communication to convey sophistication and premier quality.

Two Actionable Strategies for Health Brands

The health and wellness industry faces unique challenges when it comes to consumer perception. Expectation assimilation can lead to preconceived notions about taste and effectiveness, while price relativity can influence how consumers value your offerings compared to similar products.

Understanding the science behind these concepts is crucial. Brands can develop effective strategies to overcome these hurdles. For example, you can focus on taste rather than health claims, highlight unique selling positions, and utilize strategic pricing to position yourself in the marketplace.

Interested in decoding some of the world’s most famous brands? Check out our Behavioral Science for Brands Podcast as part of our Consumer Behavior Lab. Ready to boost your own marketing strategy with science-backed tactics? Get in touch with the experts at Function Growth.