How Brands Grow

Professor Byron Sharps most interesting presentation from the on the subject can be sownloaded by clicking here.o

How Brands Grow

Growing middle classes in China, India and Brazil are creating new opportunities, but some short-term headwinds are pressuring consumer-focused stocks in these and other countries, according to David Ruff, co-manager of Forward International Dividend Fund, who has perspective on this emerging-market trend. Jonathan Burton reports.

o

Consumer Trends 2011

o

Consumer Trends 2011

The Language of Young Love: The Ways Couples Talk Can Predict Relationship Success

We know that people tend to be attracted to, date, and marry other people who resemble themselves in terms of personality, values, and physical appearance. However, these features only skim the surface of what makes a relationship work. The ways that people talk are also important. A new study published in Psychological Science, a journal of the Association for Psychological Science, finds that people who speak in similar styles are more compatible. 

The study focused on words called “function words.” These aren’t nouns and verbs; they’re the words that show how those words relate. They’re hard to explicitly define, but we use them all the time—words like the, a, be, anything, that, will, him, and and. How we use these words constitutes our writing and speaking style, says study coauthor James Pennebaker of the University of Texas at Austin. 

“Function words are highly social and they require social skills to use,” he says. “For example, if I’m talking about the article that’s coming out, and in a few minutes I make some reference to ‘the article,’ you and I both know what the article means.” But someone who wasn’t part of that conversation wouldn’t understand. 

Pennebaker, Molly Ireland, and their colleagues examined whether the speaking and writing styles couples adopt during conversation with each other predict future dating behavior and the long-term strength of relationships. They conducted two experiments in which a computer program compared partners’ language styles. 

In the first study, pairs of college students had four-minute speed dates while their conversations were recorded. Almost every pair covered the same topics: What’s your major? Where are you from? How do you like college? Every conversation sounded more or less the same to the naked ear, but text analysis revealed stark differences in language synchrony. The pairs whose language style matching scores were above average were almost four times as likely to want future contact as pairs whose speaking styles were out of sync.

A second study revealed the same pattern in everyday online chats between dating couples over the course of 10 days. Almost 80 percent of the couples whose writing style matched were still dating three months later, compared with approximately 54 percent of the couples who didn’t match as well. 

What people are saying to each other is important, but how they are saying it may be even more telling. People aren’t consciously synchronizing their speech, Pennebaker says. “What’s wonderful about this is we don’t really make that decision; it just comes out of our mouths.”

o

The Language of Young Love: The Ways Couples Talk Can Predict Relationship Success

Kids Learning Computer Skills Before Life Skills

AVG research shows that today’s kids are learning computer skills before life skills. 

The key results are as follows:

1 - More small children can play a computer game than ride a bike. 58 percent of children aged 2-5 know how to play a 'basic' computer game. For the U.K. and France that jumps to 70 percent. Even 44 percent of 2-3 year olds have the ability to play a computer game. By comparison, 43 percent of kids 2-3 can ride a bike

2 - More kids aged 2-5 can play with a smartphone application (19 percent) than tie his or her shoelaces (9 percent). Almost as many 2-3 year olds (17 percent) can play with a smartphone application as 4-5 year olds (21 percent)

3 - More small children can open a web browser (25 percent) than swim unaided (20 percent)

4 - There is no tech gender divide between young boys and girls. As many boys (58 percent) as girls (59 percent) can play a computer game or make a mobile phone call (28 percent boys, 29 percent girls)

5 - Mothers aged 35 and over are slightly better at teaching their kids 'life skills.' For example 40 percent of toddlers with mothers aged 35-plus can write their own name compared with 35 percent of toddlers with mothers aged 34 or younger

6 - European children aged 2-5 lead their U.S. counterparts in knowing how to make a mobile phone call (44 percent in Italy vs. 25 percent for the U.S.), playing a computer game (70 percent U.K. vs. 61 percent U.S.) and operating a computer mouse (78 percent France vs. 67 percent U.S.)

Read more by clicking here. 

o

Kids Learning Computer Skills Before Life Skills

Retail Trends 2011 by Peter Fisk

Retail 2011 ... What's hot and next in the world of retail

View more presentations from Peter Fisk.

o

Retail Trends 2011 by Peter Fisk

The IKEA Layout, a Tool To Make People Buy More Than Planned

Professor Alan Penn describes the way that architects use space to sell you things, showing how space creates patterns of movement, bringing you into contact with goods. In IKEA though, the story gets more interesting, here the designers deliberately set out to confuse you, drawing you into buying things that are not on your shopping list. You can also down load Penn´s research paper by clicking here. If layouts interest you, click here to read an earlier post on how to create effective store layouts.

o

The IKEA Layout, a Tool To Make People Buy More Than Planned

Study suggests economic insecurity can make you obese

An Oxford University study suggests that people living in countries with ‘free market’ regimes are more likely to become obese due to the stress of being exposed to economic insecurity. The researchers believe that the stress of living in a competitive social system without a strong welfare state could be causing people to overeat. According to the study published in the latest issue of the journal Economics and Human Biology, Americans and Britons are much more likely to be obese than Norwegians and Swedes.

Oxford researchers compared 11 affluent countries and found that those with a liberal market regime (strong market incentives and relatively weak welfare states) experienced one-third more obesity on average. Their analysis of nearly 100 surveys*, carried out between 1994 and 2004, revealed that the highest prevalence of obesity reported in a single survey was in the United States where one-third of the population was classed as obese. By contrast, Norway had the lowest prevalence of obesity in a single survey at just five per cent.

The study compared ‘market-liberal’ countries (United States, Britain, Canada and Australia) with seven relatively affluent European countries that have systems that traditionally offer stronger social protection (Finland, France, Germany, Italy, Norway, Spain and Sweden). It concludes that economic security plays a significant role in determining levels of obesity. Countries with higher levels of job and income security were associated with lower levels of obesity.

In the past, the rise of obesity in affluent societies has frequently been attributed to the ready supply of cheap, accessible, high-energy, pre-processed food in fast food outlets and supermarkets. This cause is known by researchers as the ‘fast food shock’. Oxford researchers measured the impact of fast food by using a price index, constructed by The Economist magazine*, showing the international variation in the cost of a Big Mac hamburger (sold by the fast food chain McDonald’s). They found that the availability of fast food may not be as significant as previously thought, as they calculated it had half as much an effect on the prevalence of obesity as the effects of economic insecurity.

Lead author Professor Avner Offer, Chichele Professor of Economic History at the University of Oxford, said: ‘Policies to reduce levels of obesity tend to focus on encouraging people to look after themselves but this study suggests that obesity has larger social causes. The onset and increase of large-scale obesity began during the 1980s, and coincided with the rise of market-liberalism in the English-speaking countries.

‘It may be that the economic benefits of flexible and open markets come at a price to personal and public health which is rarely taken into account. Basically, our hypothesis is that market-liberal reforms have stimulated competition in both the work environment and in what we consume, and this has undermined personal stability and security.

’The Oxford research team based this study on observations in academic literature about animal behaviour. Animals, both in captivity and in the wild, have been found to increase their food intake when they are faced with uncertainty about their future food supply.

These latest findings suggest that obesity in affluent societies is a response to the stress of economic insecurity. The researchers found that the effects of economic security were considerably greater in causing obesity than other factors measured (the existence of a market-liberal regime; inequality, the price of fast food, and the passage of time). 

The researchers only examined data at a national level and they are now examining data at an individual level to try to establish what drives people to overeat. The study also raises the possibility that the causes of overeating could have deep historical roots. It suggests that different cultural norms may make certain nations more predisposed to excess or moderation, and to risk-taking or security. Although obesity today could be triggered by the current food environment, the study raises the possibility that our reaction may also reflect our deeper cultural heritage.

o

Study suggests economic insecurity can make you obese

Shopping Habits in Uncertain Economy

US consumers are making more frequent shopping trips but buying less each trip, according to research by Nielsen. In the research, shopping trips were segmented into four types:

• Immediate: low-value, instant -need driven baskets with an average basket ring of $15 per trip
• Fill-In: slightly higher value baskets averaging $51 per trip
• Routine: weekly, high-value shopping trips averaging $98 per trip
• Stock-up: large trips averaging $242 per trip

The research also shows the various channels roles in perspective of the different type of shopping trips and also the habits for different levels of household income:

"

By Channel

• Grocery – Immediate trips fell in importance by almost one percent as the channel saw minor gains in fill-in, routine and stock-up trips.
• Supercenters – Immediate and fill-in trips have gained in importance over the past two years, while routine and stock-up trips declined.
• Mass merchandisers (excluding supercenters) – Fill-in trips showed slight gains, while all other trip types posted minor declines.
• Drug – Fill-in and routine trips were up, while immediate trips declined.
• Warehouse Club – There was an up-tick in immediate trips, but the staple of club stores – routine and stock-up trips declined.
• Convenience/gas – Immediate trips – the hallmark of this channel – have declined by more than two percent, most likely due to rising gas prices.
• Dollar – Basket size increased, but the immediate trip type continued to dominate.

By Household Income

• Affluent ($100k+) – Increased the percentage of smaller trips within supercenters and club stores, and drove more frequent and larger trips in smaller formats such as drug, convenience and dollar stores.
• $70k – $99.9k – This group reduced larger trips across most channels, but increased smaller trips within supercenters and club stores. Stock-up trips were generally off among these households.
• $50k – $69.9k – Middle income households shopped less frequently overall while increasing their trips to value-centric supercenters and dollar stores.
• $40k – $49.9k – Trips declined across most channels, but these households increased their immediate, fill-in and routine trips to club stores, with smaller and stock-up trips to dollar stores also up.
• $30k – $39.9k – Small trip growth within supercenters, while stock-up trips declined by 10% in that channel and in all measured channels. All but the very large dollar store trips grew among these households.
• $20k – $29.9k – Smaller supercenter and club trips grew slightly, while stock-up trips declined by 10% in all measured channels. Dollar stores are performing well among this income group that retailers are targeting.
• Less than $20k – Drastic cutbacks on small grocery trips, while increasing larger grocery and club trips. This may be indicative of pay period buying behavior. This income group shows big drops in larger supercenter trips and softness in dollar store trips."

Source Nielsen.

As small trips are gaining in importance, there seem to be opportunities in store layout, assortment and promotional support to attract consumers with "short horizon shopper missions" in mind. 

  

o

Shopping Habits in Uncertain Economy

Research discovers why first impressions are so persistent

New research by a team of psychologists from Canada, Belgium, and the United States shows there is more than a literal truth to the saying that ‘you never get a second chance to make a first impression’. The findings suggest that new experiences that contradict a first impression become ‘bound’ to the context in which they were made. As a result, the new experiences influence people’s reactions only in that particular context, whereas first impressions still dominate in other contexts.

"Imagine you have a new colleague at work and your impression of that person is not very favourable” explains lead author Bertram Gawronski, Canada Research Chair at The University of Western Ontario. “A few weeks later, you meet your colleague at a party and you realize he is actually a very nice guy. Although you know your first impression was wrong, your gut response to your new colleague will be influenced by your new experience only in contexts that are similar to the party.  However, your first impression will still dominate in all other contexts.”

According to Gawronski, our brain stores expectancy-violating experiences as exceptions-to-the-rule, such that the rule is treated as valid except for the specific context in which it has been violated.

To investigate the persistence of first impressions, Gawronski and his collaborators showed their study participants either positive or negative information about an unknown individual on a computer screen. Later in the study, participants were presented with new information about the same individual, which was inconsistent with the initial information. To study the influence of contexts, the researchers subtly changed the background color of the computer screen while participants formed an impression of the target person.

When the researchers subsequently measured participants’ spontaneous reactions to an image of the target person, they found the new information influenced participants’ reactions only when the person was presented against the background in which the new information had been learned. Otherwise, participants’ reactions were still dominated by the first information when the target person was presented against other backgrounds.

Although these results support the common observation that first impressions are notoriously persistent, Gawronski notes they can sometimes be changed. “What is necessary is for the first impression to be challenged in multiple different contexts. In that case, new experiences become decontextualized and the first impression will slowly lose its power. But, as long as a first impression is challenged only within the same context, you can do whatever you want. The first impression will dominate regardless of how often it is contradicted by new experiences.”

According to Gawronski, the research also has important implications for the treatment of clinical disorders. “If someone with phobic reactions to spiders is seeking help from a psychologist, the therapy will be much more successful if it occurs in multiple different contexts rather than just in the psychologist’s office.”

o

Research discovers why first impressions are so persistent

Beating the Competition

Scientists from the Max Planck Institute for Dynamics and Self-Organization discover how the size of networks can skyrocket

A single new connection can dramatically enhance the size of a network – no matter whether this connection represents an additional link in the Internet, a new acquaintance within a circle of friends or a connection between two nerve cells in the brain. The results, which are published in Nature Physics, were part of a theoretical study carried out by researchers from the Max Planck Institute for Dynamics and Self-Organization, the Bernstein Center for Computational Neuroscience Göttingen and the University Göttingen. This study mathematically describes for the first time the influence of single additional links in a network. (Nature Physics, published online on January 16^th, 2011

Imagine the following scenario: In your sports team you get to know a new player and arrange to go out and see a movie on the next weekend. The new team member brings along three friends - and suddenly by adding one new contact, your own circle of friends has grown by four people. Growth processes of this sort occur in many networks: Neurons in the brain constantly establish new connections, websites link to each other and a person travelling infected with influenza creates a network of infected places with each intermediate stop. From a scientist's point of view, such growth processes are still poorly understood: How does a network change when single links are added? How quickly does a network grow in this way?

To answer these questions, the scientists from Göttingen tracked the growth of networks link by link. A new connection, however, can not only add one new element. It can also merge two networks (as in the example in the sports team above). The researchers focused on a special form of network growth that introduces a form of competition between possible links: If several new connections are possible, only the one connection is created: the one that results in the smallest new network. "There is evidence, that growing networks of neurons at first prefer forming small groups and thus roughly follow the growth process we discuss", says Jan Nagler, staff researcher at the University of Göttingen and the Max Planck Institute for Dynamics and Self-Organization.

The situation can be compared to the social contacts established in a summer camp for children, whose participants all don’t know each other at the beginning of their vacation. Most likely, the children will at first team up in small groups and pairs. If such a pair wants to expand its social circle, it typically proceeds cautiously, approaching another pair or a small group rather than a large clique. At the beginning of the vacation, the social networks within the camp therefore grow slowly. At the end, all children will have become acquainted: The network has then reached its largest possible size and connects all elements of the system.

“In our study we zoomed in on an intermediate growth phase. This phase arises after the elements have begun to sporadically connect into small groups, but before the entire system is linked”, explains Marc Timme, head of the Network Dynamics Group at the Max Planck Institute for Dynamics and Self-Organization. How do the many small networks link to form a whole? Are several large networks created at the same time or does one dominant network develop that towers above the others? In addition to performing computer simulations, the Göttingen researchers were for the first time able to derive mathematical expressions that describe this growth phase link by link.

The scientists found that after a certain number of new links, a sudden growth spurt occurs: The size of the largest network within the system is enhanced dramatically. “With respect to the size of the system, this jump is more dramatic in small systems than in large ones”, says Nagler. However even in systems that consist of a huge number of elements – comparable for example to the number of neurons in the brain – the size of the largest network can double. “At first, many networks of moderate size develop in this way”, says Timme. Thus, a dominant spanning network emerges only at a late stage in the growth process.

In a next step, the researchers now want to identify which forms of competition in natural systems from biology and physics imply this rapid growth and study the consequences of these growth spurts.

o

Beating the Competition

Students Are More Likely to Retake the SAT if Their Score Ends With “90”

High school students are more likely to retake the SAT if they score just below a round number, such as 1290, than if they score just above it. That’s the conclusion of a study published in Psychological Science, a journal of the Association for Psychological Science, which found that round numbers are strong motivators. 

The work was inspired by a study that found that a car’s value drops suddenly when it passes a 10,000 mile mark—so a car that has 70,000 miles is worth markedly less than one with 69,900 miles. “We were talking about that and we started thinking about SAT tests,” says Uri Simonsohn of the University of Pennsylvania, who cowrote the study with Devin Pope of the University of Chicago. 

Pope had a set of SAT scores from 1994 to 2001—before the SAT scoring system changed—when the maximum score was still 1600. These scores were only the last score attained by each student, so if they retook the test, their first score didn’t appear. The researchers found gaps just below 1000, 1100, 1200, and so on, indicating that people who got those scores were more likely to retake the test and have that just short of a “00” score replaced by something else. 

The change in SAT scores probably doesn’t make a big difference in the students’ lives, Simonsohn says. “The SAT doesn’t matter nearly as much for admission as people think, so 10 points probably don’t make a difference.” (In fact, when Simonsohn looked at actual admissions data, he found that students who scored 1390 were just as likely to be accepted as students who scored 1400.) His only worry is that students might be wasting their time retaking the SAT to reach a pointless goal rather than doing something more productive. 

In experiments, the researchers also found that people who imagined running laps were more likely to say they’d do another lap if they’d just finished 19 than if they had already run 20. A look at baseball stats found that that players are four times more likely to end a season with a .300 batting average than a .299 average—they manipulate their batting average by making decisions about whether to walk or swing, or whether to have a pinch hitter come in. 

The research “tells you how important self-motivation is,” Simonsohn says. People are surprisingly driven by round numbers and will take major action—like sitting through a day of standardized testing, which hardly anybody enjoys—to reach these arbitrary goals. Economists in particular tend to focus on actual awards that come from outside, like money or another reward, he says, but this is a clear example of motivation coming from within.

o

Students Are More Likely to Retake the SAT if Their Score Ends With “90”

The Future of Retail 2011-2021 part 3/10

In order to watch in full screen, click on the Slideshare link in the bottom right hand corner and choose "full screen" in the new window.The Future of Retail 2011-2021 part 3/10

View more presentations from MAgnus Ohlsson.

o

The Future of Retail 2011-2021 part 3/10

Apologies Aren’t as Good as People Imagine They’ll Be

We all want an apology when someone does us wrong. But a new study, published in Psychological Science, a journal of the Association for Psychological Science, finds that people aren’t very good at predicting how much they’ll value an apology. 

Apologies have been in the news a lot the last few years in the context of the financial crisis, says David De Cremer of Erasmus University in the Netherlands. He cowrote the study with Chris Reinders Folmer of Erasmus University and Madan M. Pillutla of London Business School. “Banks didn’t want to apologize because they didn’t feel guilty but, in the public eye, banks were guilty,” De Cremer says. But even when some banks and CEOs did apologize, the public didn’t seem to feel any better. “We wondered, what was the real value of an apology?” 

De Cremer and his colleagues used an experiment to examine how people think about apologies. Volunteers sat at a computer and were given 10 euros to either keep or give to a partner, with whom they communicated via computer. The money was tripled so that the partner received 30 euros. Then the partner could choose how much to give back—but he or she only gave back five euros. Some of the volunteers were given an apology for this cheap offer, while others were told to imagine they’d been given an apology. 

The people who imagined an apology valued it more than people who actually received an apology. This suggests that people are pretty poor forecasters when it comes down to what is needed to resolve conflicts. Although they want an apology and thus rate it as highly valuable, the actual apology is less satisfying than predicted.

“I think an apology is a first step in the reconciliation process,” De Cremer says. But “you need to show that you will do something else.” He and his authors speculate that, because people imagine that apologies will make them feel better than they do, an apology might actually be better at convincing outside observers that the wrongdoer feels bad than actually making the wronged party feel better.

o

Apologies Aren’t as Good as People Imagine They’ll Be

Don’t Understand What the Product Is? Ask a Woman

A new study in the Journal of Consumer Research shows that women are better than men at figuring out unusual products when they’re among competing items.

“A lot of times when we look at how consumers respond to innovative change in a product’s physical form, we fail to consider that the context where they see the product plays a major role in how they evaluate and interpret it,” write authors Theodore J. Noseworthy, June Cotte, and Seung Hwan (Mark) Lee (all University of Western Ontario).

The researchers examined consumer reactions to innovative products, like a car without visible wheels or a soft drink packaged in a strange way. In their experiments, some participants viewed advertisements for normal-looking products, whereas others saw extremely unusual products. Sometimes the ads for the unusual items were alongside similar products and other times they were alongside completely unrelated products.

“Our results show that women are better than men at figuring out an extremely unusual product, as long as the product is promoted among competing products,” the authors write. For example, female participants understood that a car without visible wheels was a car if the ad appeared in a magazine with other car ads, while men had trouble.

Perhaps not surprisingly, once the women figured out what the products were, they liked them more. But here’s the catch: When women used the other ads to identify the unusual products, they had trouble accurately remembering the claims within the ads. “Women, as compared to men, are more likely to mix in claims from ads for competing products when they are using those products to make sense of an unusual product,” the authors write. This confusion only happened with the female participants.

“There are dramatic differences in how males and females process the advertising context,” the authors write. “Consumers—female consumers in particular—may be able to understand greater levels of visual incongruity than traditionally thought. For example, women in a cell-phone store should be better able to use store context to understand a radical new cell phone than would women in an electronics store.”

Theodore J. Noseworthy, June Cotte, and Seung Hwan (Mark) Lee. “The Effects of Ad Context and Gender on the Identification of Visually Incongruent Products.” Journal of Consumer Research: August 2011. 

o

Don’t Understand What the Product Is? Ask a Woman

Self-Control and Choices: Why We Take the Easy Path after Exerting Ourselves

After a rough day at the office, you might opt for a convenient, pretty restaurant over one with a top-notch menu, according to a new study in the Journal of Consumer Research.

“If you’ve had a tough day at work, how will that affect the decisions you make, like where to eat, what to do, and what to buy?” ask authors Echo Wen Wan (University of Hong Kong) and Nidhi Agrawal (Northwestern University). Their research revealed that people who are tired from a demanding task will tend to pass up the most desirable choices and go for options that seem to have attractive low-level features.

“After a depleting task people were more likely to pass up the option that was most desirable, widest in scope, and best in primary traits and instead chose the option with lower-level features,” the authors write.

For example, the authors predict that after a difficult flight, a consumer would most likely choose a restaurant with a great view over one with excellent food. And someone who just finished a big presentation would opt for a convenient concert over one by a favorite band. They discovered that participants who felt depleted after completing a self-control task chose easy jobs over interesting ones and weekly calendars over months ones—demonstrating a preference for short- term value.

“When we feel fresh it’s relatively easy for us to focus on the primary features of a product, consider the outcome of a choice, and value the long-term benefits of an action,” the authors explain. “However when we feel depleted from exerting self-control, we start to attend to the non-central minor aspects, think about how feasible it is to engage in the choice, and sometimes emphasize short-term rewards.”

The authors also found they could prompt participants to think at higher levels. In one experiment, depleted individuals chose an art exhibit that was convenient. But when they were primed to think at a higher level, they chose the exhibit by an artist they liked.

Echo Wen Wan and Nidhi Agrawal. “Carry-Over Effects of Self-Control on Decision-Making: A Construal Level Perspective.” Journal of Consumer

Research: August 2011.

o

Self-Control and Choices: Why We Take the Easy Path after Exerting Ourselves

Don’t Understand What the Product Is? Ask a Woman

People feel closer to businesses and nonprofits that solicit their advice, but soliciting expectations can distance potential customers, according to a new study in the Journal of Consumer Research.

“Marketers and nonprofits alike regularly solicit input from customers or donors for myriad reasons, most notably to measure consumers’ preferences, expectations, and satisfaction,” write authors Wendy Liu (USCD) and David Gal (Northwestern University). Interactive media such as Facebook and Twitter are providing even greater opportunities for interaction with customers.

The researchers looked at whether providing input affected the customer’s subsequent interactions with the organization. In experiments they found that participants expressed a greater likelihood that they would patronize a fitness center (“EcoGym”) and a restaurant business (a healthy fast-casual restaurant called “Splash”) after they provided advice to those organizations than when they were not asked for their input or after they were simply asked for their opinions of those organizations. “Relative to no input, soliciting advice tends to have an intimacy effect whereby the individual feels closer to the organization,” the authors write.

On the other hand, soliciting expectations has the opposite effect, distancing the individual from the organization and diminishing their likelihood of donating to or purchasing from the organization. “Stating expectations tended to make consumers focus on themselves and their own needs, and that the organization existed merely to service their needs,” the authors explain. “This perspective created a sense of distance between the participant and the organization, thereby reducing subsequent purchase.”

The authors also found that when companies pay customers for advice, it does not increase purchase likelihood, as it shifts the customer’s relationship to one based strictly on economic exchange. They also found that if consumers detect insincerity (companies merely asking advice to get them to donate or purchase) such efforts could backfire.

o

Don’t Understand What the Product Is? Ask a Woman

Why Do the Abbotts Wait, While the Zimmermans Rush to Buy?

The first letter of our childhood surname determines much about our consumer behavior as grownups, according to a new study in the Journal of Consumer Research.

Why are some people more likely than others to wait in line overnight to buy a just-released book or to queue up for the new iPad? “The tendency to act quickly to acquire items such as those above is related to the first letter of one’s childhood surname,” write authors Kurt A. Carlson (Georgetown University) and Jacqueline M. Conard (Belmont University).

The authors studied how quickly adults responded to opportunities to acquire items of value to them. They found that the later in the alphabet people’s childhood surnames were, the faster those consumers responded to purchase opportunities. The “last-name effect” occurred when the items were real (basketball tickets, cash, and wine) or hypothetical (sale on a backpack).

The effect occurred only with childhood surnames, not names that had changed due to marriage. Children with last names that fall late in the alphabet are often at the end of lines or at the back of the class. “The idea holds that children develop time-dependent responses based on the treatment they receive,” the authors explain. “In an effort to account for these inequities, children late in the alphabet will move quickly when last name isn’t a factor; they will ‘buy early.’ Likewise, those with last names early in the alphabet will be so accustomed to being first that that individual opportunities to make a purchase won’t matter very much; they will ‘buy late.’”

“The last-name effect is especially important to retailers and salespeople because customer names are easy for marketers to obtain and because there are many decisions in which the decision is not whether to buy, but when to buy,” the authors write.

Whether it’s shopping at a clearance sale, choosing a seat to hear live music, or shopping for produce at a farmers’ market, late alphabet consumers want to make sure they’re the first in line.

o

Why Do the Abbotts Wait, While the Zimmermans Rush to Buy?

Future Of Mobile Tagging Report

PSFK presents Future Of Mobile Tagging Report

View more presentations from PSFK.

o

Future Of Mobile Tagging Report

The Future of Retail

Watch full screen by click in the bottom, right hand corner.

The Future of Retail 2011-2021preview

View more presentations from MAgnus Ohlsson.

o

The Future of Retail

The Effect of Goal Visualization on Goal Pursuit: Implications for Individuals and Managers

From the abstract:

This research demonstrates that as individuals approach a goal, external representations which increase the ease of visualizing this goal enhance goal pursuit. Specifically, easy-to-visualize goals are judged to be closer than harder-to-visualize goals and consequently increase effort and commitment. Ease of visualization affects performance in 1500m Olympic and Sectional swimming competitions and the physical effort exerted in the lab. Visualization also affects commitment towards savings, willingness to wait for service, and performance in a simulated sales task. Importantly, the beneficial effects of visualization exist only when individuals are close to the goal. Furthermore, the effect of visualization is attenuated when the goal is split into subgoals. Managers can use these results to enhance consumer goal pursuit (for instance, for consumers who are trying to lose weight), influence consumer satisfaction in online service encounters (such as when consumers are waiting to be helped), and to motivate employees to improve performance. In these varied contexts, visual representations of goal progress (such as progress bars) are likely to enhance motivation as individuals approach their goal.

Read the full research paper to be published in Journal of Marketing by clicking here.

o

The Effect of Goal Visualization on Goal Pursuit: Implications for Individuals and Managers

Global financial crisis accelerates shift in economic power to emerging economies

The global financial crisis has accelerated the shift in economic power to emerging economies, says a report published by PwC today.

This is one of the conclusions from the latest in the series of PwC’s ‘The World in 2050’ reports. Measuring GDP at purchasing power parities (PPPs) - which corrects for the fact that price levels tend to be lower in emerging economies - the analysis shows that the E7 emerging economies (China, India, Brazil, Russia, Mexico, Indonesia and Turkey) are likely to overtake the G7 economies (US, Japan, Germany, UK, France, Italy and Canada) before 2020.

If instead we use GDP at market exchange rates (MERs), then the shift in the economic world order is slower but equally inexorable, with the E7 projected to overtake the G7 around 2032. China would also overtake the US in that same year to become the biggest economy in the world based on GDP at market exchange rates, although on a PPP basis this would be likely to occur before 2020. This is even allowing for some slowing of China’s growth rate over time due to its one child policy and the fact that, as it catches up with the US, it must rely more on innovation than imitation to sustain further growth.

The table below summarises some of the key estimated overtaking dates for the E7 economies relative to the G7. We can see that these always occur later when using market exchange rates than PPPs, but even on an MER basis there is an inexorable process of the new world order replacing the old over the next four decades. While precise overtaking dates are clearly subject to many uncertainties, and some emerging countries may fail to realise their full growth potential, the general pattern should be robust assuming no catastrophic political or environmental shocks that permanently throw the world off its current economic development path.

The contenders	Estimated overtaking dates based on GDP at PPPs	Estimated overtaking dates based on GDP at MERs
E7 vs G7	2017	2032
China vs US	2018	2032
India vs Japan	2011	2028
Russia vs Germany	2014	2042
Brazil vs UK	2013	2023
Mexico vs France	2028	2046
Indonesia vs Italy	2030	2039
Turkey vs Canada	2020	2035

Source: PwC model estimates (see Table 3 in full report for all estimated E7 vs G7 overtaking dates up to 2050)

The most significant increase in its share of world GDP is actually projected for India rather than China. In 2009 India’s share of world GDP measured at MERs was just 2%. By 2050 this share could grow to around 13%. India could overtake Japan as early as 2011 based on GDP at PPPs and could even overtake the US by 2050 on this basis. India’s progress up the GDP league table will be much slower using market exchange rates because its domestic price levels are still far below G7 levels at present, but even based on GDP at MERs it should have overtaken Japan by 2030 and be close to catching up with the US by 2050.

The analysis finds that Australia and Argentina may be relegated from the ranks of the largest G20 economies by 2050, while Vietnam and Nigeria have the potential to join this list. Indonesia could rise from the sixteenth biggest economy in PPP terms in 2009 to the eighth biggest by 2050, overtaking not just Italy (as shown in the table above) but also France, the UK and Germany over the next 40 years. Depending on the measure used, the UK would only narrowly remain in the top ten in 2050 with a ranking of 9th place based on GDP at market exchange rates, or 10th based on GDP at PPPs.

John Hawksworth, chief economist at PwC, said:

“In many ways the renewed dominance by 2050 of China and India, with their much larger populations, is a return to the historical norm prior to the Industrial Revolution of the late 18th and 19th centuries that caused a shift in global economic power from Asia to Western Europe and the US – this temporary shift in power is now going into reverse.

“This changing world order poses both challenges and opportunities for businesses in the current advanced economies, including the UK. On the one hand, competition from emerging market multinationals will increase steadily over time and the latter will move up the value chain in manufacturing and expand strongly in areas like banking where the global financial crisis has hit the West harder than the East.

“At the same time, rapid growth in consumer markets in the major emerging economies associated with a fast growing middle class, will provide great new opportunities for Western companies that can establish themselves in these markets. This applies not least to the UK, which currently sells only around 7% of its exports to the BRICs (including Hong Kong as part of China), about the same as it exports to Ireland at present and notably lower than the corresponding 10% of German exports going to the BRICs. If the UK is not to be playing in the slow lane of history for the next 40 years, then it needs to find a way to break into these fast-growing emerging markets on a much larger scale than achieved so far”.

o

Global financial crisis accelerates shift in economic power to emerging economies