How does the halo effect apply to marketing?

The halo effect is important in marketing because it means that an individual product characteristic can influence how consumers perceive the product’s other characteristics.

A product may be perceived as being high quality if the packaging looks expensive, for instance—even if this isn’t the case. Conversely, the halo effect can work in the other direction (the horn effect) and negatively impact sales if the packaging of a high-quality product looks too cheap.