Ethical Considerations in Leveraging the Decoy Effect for Marketing in FMCG

Abstract

This study explores the utilization of the decoy effect as a marketing strategy within the Fast-Moving Consumer Goods (FMCG) sector, focusing on the ethical questions it raises. The decoy effect capitalizes on consumers' cognitive biases by introducing a third product option designed to shift preferences toward a targeted choice without restricting options. Reviewing prior behavioral and neuroscientific research reveals that such tactics effectively shape purchasing behavior and foster brand loyalty. However, potential ethical issues arise, notably the reduction of consumer autonomy and transparency concerns, especially for vulnerable customers. The paper contends that while the decoy effect boosts sales and profits, it is essential to balance these advantages with ethical responsibilities. Through an integrative review of empirical evidence and theoretical insights, the study outlines how marketers can responsibly apply decoy strategies in ways that respect consumers as autonomous decision-makers rather than mere targets for persuasion. Recommendations encourage transparency, fairness, and placing consumer welfare at the forefront to build trust and sustain long-term relationships. Ultimately, responsible application, supported by ongoing research and regulation, can harmonize marketing efficiency with consumer rights, benefiting both businesses and buyers. The paper concludes by advocating ongoing research and the development of regulatory frameworks to ensure that the decoy effect’s use aligns not only with marketing goals but also with consumer rights, ultimately benefiting both businesses and shoppers alike.