Tuesday, February 11, 2014

Want brand loyalty? Scare your customers

Consumers will cling to a product like Coke for comfort if watching a scary movie on their own, a new study from UBC’s Sauder School of Business shows. This finding contradicts industry norms which see significantly fewer product placements in horror films compared to other genres.
“People cope with fear by bonding with other people. When watching a scary movie they look at each other and say ‘Oh my god!’ and their connection is enhanced,” says newly graduated Sauder PhD student Lea Dunn. “But, in the absence of friends, our study shows consumers will create heightened emotional attachment with a brand that happens to be on hand.”
In her forthcoming Journal of Consumer Research paper, Dunn demonstrates that consumers who experience fear while watching a film feel a greater affiliation with a present brand than those who watch films which evoke happiness, sadness or excitement.
A further study reveals that fear stimulates people to report greater brand attachment, even if they are limited to just seeing the product. Finally it was shown that enhanced feelings toward the brand were only generated if it was experienced at the same time as fear. If the product is presented afterward, no bond is created.
“Marketers are afraid of fear. Their worries about negative associations outweigh their desire to tap into the massive market commanded by fear-based entertainment such as horror films or video games,” says Dunn. “But our study shows advertisers should consider offering up their brands as something to cling to in the dark when the knives come out and the blood starts to splatter.”


Friday, January 10, 2014

The Power of Packaging

When it comes to deciding what food to eat, one might expect that people’s choices will be driven by past experience and personal preference, but how does the general appearance of the package impact buying decisions of consumers?

Scientists believe colorful or otherwise noticeable food packages predispose where people look, how long they examine certain options and ultimately, influence which foods they choose, according to a new study published in the Proceedings of the National Academy of Sciences. 

“When choice options are presented simultaneously, eye movements are considered a good predictor of our economic decisions,” said Milica Mormann, senior research scientist at the University of Miami School of Law and co-author of the study. “The big idea here is that perceptual processes happen in the brain in parallel with economic value computations and thus influence how economic decisions are made.”

“These findings can be applied to guide the design of choice environments, to ‘nudge’ people toward making optimal choices, be it selecting a healthy food option to eat or the best retirement plan to invest in,” Mormann said.

In the study, Mormann and researchers from the California Institute of Technology asked participants to search for and choose a snack food item to eat -- such as M&Ms or Twix -- out of four simultaneously presented snack alternatives. Eye-tracking technology recorded what items people were looking at, in real time.

Images of food items were also analyzed using novel neuro-computational simulation of human attentional processes to determine which items attract attention due to the color, brightness and other visual features of their packaging. The experiment showed that visual fixations are driven by a combination of visual attractiveness and preference information. In fact, the visual attractiveness of product packaging influences where people look in a ratio of 1:3 or 2:3 compared to consumer preferences. In other words, visual attractiveness has a smaller, but significant, influence than food preferences on consumer decisions.

Importantly, these findings allowed the scientists to accurately predict eye-movement patterns and subsequent food choices using only the images of food items and participants’ stated liking ratings of these food items. The accuracy of prediction was higher when both visual features and preferences are accounted for than when only the preference information, or asking people what they like, was considered.

Most existing studies on how people make choices do not examine what is visually appealing but, instead, focus on what is economically attractive. A separate body of literature, dedicated to perceptual decision-making, examines what people perceive and pay attention to. The current study bridges these two research approaches to build a more comprehensive understanding of how people make everyday choices.

“Surprisingly, the traditional research approach tends to ignore other, fundamental influences that could impact decision makers at the time of choice, such as how people perceive choice options and how much attention they allocate to different options,” Mormann says.

The new study makes an important observation: during the economic choice process the brain merges and reconciles competing types of inputs, including, but not limited to, the perceptual and taste preference information.

Sunday, December 15, 2013

Social Exclusion and Consumer Product Preference: Drink Pepsi to Fit in, but Fly American to Stand Out?

Social networks are commonplace in this day and age, and how we fit in may depend on anything from political affiliation, to religion, to even our own personality traits. According to a new study published in the Journal of Consumer Research, consumers who are okay with being rejected from a group are more likely to purchase things that set them apart from the norm. 
“We examined when and why exclusion from social networks might lead consumers to prefer distinctive products,” write authors Echo Wen Wan (University of Hong Kong), Jing Xu (Peking University), and Ying Ding (Renmin University of China).

In their research, the authors proposed that consumers who were excluded from social networks would select unique products when they felt that the cause of their exclusion was stable. In other words, when they felt like the reason for exclusion was not because of a personality flaw or something beyond their immediate control, people would interpret choosing a unique product as an extension of their distinctive personalities. 

In two different studies, consumers were either accepted or rejected into a social network or a desired brand community. In both cases, the authors found that when participants were rejected due to an unstable cause (such as a personal character flaw or a changeable company policy), they were more likely to select products already accepted within the group than choose something that set them apart from the norm. 

For brands using a popularity appeal to promote their product line, the authors’ findings offer insight into how consumers’ psychological states of belongingness influence their spending habits. “For consumers who feel excluded from a brand, using a ‘uniqueness’ appeal might elicit a more positive response than emphasizing the popularity of the product,” the authors conclude. 
Consider Pepsi’s slogan “Something for Everyone.” People feeling rejected due to their lifestyle habits might drink a Pepsi in an attempt to fit in. On the other hand, American Airlines’ “Something Special in the Air” campaign might work well for people who have recently broken up with their girlfriend or boyfriend. 

Friday, December 6, 2013

Researchers Create Brand Associations by Mining Millions of Images From Social Media

The images people share on social media — photos of favorite products and places, or of themselves at bars, sporting events and weddings — could be valuable to marketers assessing their customers' "top-of-mind" attitudes toward a brand. Carnegie Mellon University researchers have taken a first step toward this capability in a new study in which they analyzed five million such images.
Eric Xing, associate professor of machine learning, computer science and language technologies, and Gunhee Kim, then a Ph.D. student in computer science, looked at images associated with 48 brands in four categories — sports, luxury, beer and fast food. The images were obtained through popular photo sharing sites such as Pinterest and Flickr.
Their automated process unsurprisingly produced clusters of photos that are typical of certain brands — watch images with Rolex, tartan plaid with Burberry. But some of the highly ranked associations underscored the type of information particularly associated with images and especially with images from social media sites.
For instance, clusters for Rolex included images of horse-riding and auto-racing events, which were sponsored by the watchmaker. Many wedding clusters were highly associated with the French fashion house of Louis Vuitton. Both instances, Kim noted, are events where people tend to take and share lots of photos, each of which is an opportunity to show brands in the context in which they are used and experienced.
Marketers are always trying to get inside the head of customers to find out what a brand name causes them to think or feel. What does "Nike" bring to mind? Tiger Woods? Shoes? Basketball? Questionnaires have long been used to gather this information but, with the advent of online communities, more emphasis is being placed on analyzing texts that people post to social media.
"Now, the question is whether we can leverage the billions of online photos that people have uploaded," said Kim, who joined Disney Research Pittsburgh after completing his Ph.D. earlier this year. Digital cameras and smartphones have made it easy for people to snap and share photos from their daily lives, many of which relate in some way to one brand or another.
"Our work is the first attempt to perform such photo-based association analysis," Kim said. "We cannot completely replace text-based analysis, but already we have shown this method can provide information that complements existing brand associations."
Kim and Xing obtained photos that people had shared and had tagged with one of 48 brand names. They developed a method for analyzing the overall appearance of the photos and clustering similar appearing images together, providing core visual concepts associated with each brand. They also developed an algorithm that would then isolate the portion of the image associated with the brand, such as identifying a Burger King sign along a highway, or adidas apparel worn by someone in a photo.
Kim emphasized that this work represents just the first step toward mining marketing data from images. But it also suggests some new directions and some additional applications of computer vision in electronic commerce. For instance, it may be possible to generate keywords from images people have posted and use those keywords to direct relevant advertisements to that individual, in much the same way sponsored search now does with text queries.

Thursday, November 28, 2013

Big Box Could Combat Online Retailers

Big box retailers may have had the secret to combatting online retailers all along: instant gratification. A new study from Columbia Business School that is published in the Journal of Consumer Research warns that the positive feelings consumers experience when receiving a discounted price fades dramatically if the consumer is then forced to wait for the product.
“This might spell trouble for online retailers like Amazon that offer discounted items and then force consumers to wait for the product,” said Columbia Business School’s Associate Professor of Marketing Leonard Lee, who performed the research with Rotman School of Management’s Associate Professor of Marketing Claire Tsai. “Our research shows that even if the wait is relatively short — as little as 15 minutes — the consumer’s enjoyment of the product decreases dramatically.”
Lee continued: “Keeping in mind that instant gratification has become a hallmark of society, brick and mortar businesses can add value to their bottom lines by offering in–store promotions on the products they know people want to experience immediately rather than waiting for delivery. This is a key competitive advantage they could have over online retailers and one that might secure their long–term survival in an expanding online marketplace.”
The research titled, “How Price Promotions Influence Post–Purchase Consumption Experience Over Time,” defies long–standing conventional wisdom that discounts cause consumers to enjoy products even more.
Lee and Tsai conducted four experiments across a variety of hedonic products to explore the consumer’s relationship between consumption and enjoyment. Lee and his research partner found that the shopping nirvana one feels for a product after they have received a discount only happens when the product is consumed immediately after it is paid for.
One experiment asked participants to purchase orange juice. All of the participants were told that the juice had the same retail price, but half of the participants received a 50 percent discount while the other half paid the full retail price. Then, half of the participants — regardless of whether they received a discount or not — drank the juice as soon as it was paid for, while the other half waited 15 minutes to consume the juice. The researchers found that when participants who had received a discount consumed the juice immediately, the experience was significantly amplified. However, when participants who had received a discount were forced to wait 15 minutes or longer, reviews of the juice were far less favorable than by those who were allowed to consume it immediately. In fact, when asked if consumers would purchase the juice in the future, those who waited said they would be less likely to purchase the item down the line.
Similar discoveries occurred when consumers were shopping for music. In a separate experiment, consumers who had to wait to download their discounted music enjoyed the music less than those who were able to download the music immediately.
“If you consider the consumer relationship from a long–term standpoint, in terms of customer satisfaction and brand loyalty, marketers in big box stores might want to pay more attention to the instant gratification factor because this is something no online retailer can provide at this time.”

Thursday, November 21, 2013

The Semantics Behind the Sale Price: When Does the "Original" Price Matter?

Consumers love a sale. In fact, when asked what makes a sale appealing, most simply say, “The price was good.” But this answer fails to acknowledge that subjective factors also contribute to the perceived value of a deal. According to new research published in the  Journal of Consumer Research, it’s possible to increase the perception of a good deal.  
“We find that the more a consumer relies on the original price when trying to determine a product’s worth, the more valuable they perceive the deal to be,” write authors Christina Kan, Donald R. Lichtenstein (both University of Colorado), Susan Jung Grant (Boston University), and Chris Janiszewski (University of Florida). “If a retailer can get a consumer to pay more attention to a $179 original list price, and less attention to a $99 sale price, when assessing the worth of a winter jacket, then the $99 sale price will seem like a better deal.” 
The study research summarizes three situations in which list prices have more influence on the estimated worth of a product and, by extension, the perceived value of the deal. In three different experiments, the authors reveal that when a consumer focuses on competing product similarities, they are more likely to consider all of the available information when judging the worth of a product. That is, both the original list price and the sale price are used to determine the perceived worth of the product. In contrast, when a consumer focuses on product dissimilarities, the consumer is more likely to consider only the sale price when determining the subjective value of the product. 

“This research provides insights for both retailers and consumers. Retailers can make a sales event more effective by encouraging the consumer to rely on the original price when assessing both the value of the product and the value of the deal. Additionally, by comparing product prices at competing retailers, consumers can lessen the impact of the original price on their assessment of the products’ overall worth,” the authors conclude. o

Wednesday, November 20, 2013

Don't Overwhelm Consumers with Too Many Images

If presented with looking at an image or reading a paragraph describing the same product, consumers often prefer the visual option. However, according to a new study in the Journal of Consumer Research, visual presentation can lead to information overload and result in less systematic consideration especially when making a purchasing decision. 

“Consumers prefer product information that is presented visually in pictures rather than verbally in words. Visual presentation feels easier and faster to process, and with visual depiction consumers perceive more variety in their selection,” write authors Claudia Townsend (University of Miami) and Barbara E. Kahn (Wharton School of the University of Pennsylvania). 
The authors studied how consumers process visual information in both small and large groups of images. Their experiments used eye-tracking software to identify whether the participants processed the image groupings in a more random pattern or in a more systematic, left to right, approach similar to reading. 
The results demonstrated that while people claim to prefer visual depictions, there are choice situations in which they should take more time to process the information more deeply. The authors also determined that small image sets are key to reducing visual overload, the less systematic processing of information resulting in a negative influence on perceptual and behavioral consequences. 
An example of visual overload is in mobile apps, which heavily favor graphics in the user interface. The use of too much imagery can unintentionally lead consumers to bypass the point of purchase. 

“While visual images are fun, there may be a tendency to gloss over them rather than make a purchase,” the authors conclude. “At the point of actual consideration for purchase, a text-based interface should cause consumers to slow down, review each option more carefully, and be less likely to opt out of the choice.” o