Saturday, April 30, 2011

HOW AMERICAN CONSUMERS VIEW DEBT: A CASE STUDY



A new study published this month suggests that while younger Americans are more smitten with credit cards and debt than older Americans, the older generation helps enable their children by encouraging use of credit as a “safety mechanism.”
The findings were based on case studies conducted with 27 white, middle-class Americans in 2006. The researchers, Michelle Barnhart of Oregon State University and Lisa Peñaloza of Ecole des Hautes Etudes Commerciales du Nord of France, wanted to explore some of the attitudes, perceptions and cultural meanings behind how Americans view and use debt and credit that could have contributed to the economic recession. While a small study, Barnhart said these participants were representative of overall perceptions Americans have on credit.
The results, which include detailed interviews with participants, are currently available online and will be published in the December issue of the Journal of Consumer Research.
“The economic crash was not just about people being dumb or greedy,” Barnhart said. “There are compelling forces out there that lead people to live lifestyles outside of their means.”
In 2008 alone, Americans spent 9.3 percent of their income servicing debt. And in 2010, more than 24 percent of homes in the United States had an upside-down mortgage owing more than the homes were worth. Based on interviews conducted before the 2008 financial crisis, researchers found that even though consumers espouse that they should limit their debt, they take on significant debt because doing so has become normal. As one participant put it, taking on debt is “the American way.”
Barnhart and Peñaloza’s research yielded a few key findings, including:
  • Americans suffer from a lack of financial literacy. Every participant said they had learned about credit card use and debt primarily through personal experience. Very few had received any training in school or at home, and most participants said they didn’t discuss family finances with their children.
  • Half of the participants had debt they were unable to pay and one-third of them were dealing with collection agencies.
  • Participants often talked about credit as a measure of worth, noting that if they were approved for a certain loan they were “good enough for that car.” Statements often indicated that approval for big-ticket items such as cars and homes were directly related to a value of the person.
  • Those who had credit cards and paid them off each month tended to be older, and had higher incomes.
  • Several of the younger participants in the study noted that they did not want to use credit, but felt they had to in order to finance cars and homes in the future. Most of the younger participants also were encouraged by their parents to have credit cards, and started using credit at a much younger age than those older than 50.
Barnhart, who is an assistant professor of marketing at OSU, said much of the research done on cultural behavior and attitudes leading up to the economic downturn has focused on ethnic minorities and low-income minorities. However, she said it has been some of the most educated and privileged of Americans who have engaged in risky financial behavior.
This case study, while a small sample, was able to ask detailed questions to probe into deeper issues within American society.
“Over time, credit card use and heavy debt has become normalized in our culture,” she said. “Even though we say as a society, ‘don’t get in debt,’ the overwhelming messages being sent out – from the way credit is used to approve or disapprove us for services to political leaders telling us to spend after a big disaster to prove our patriotism – all of this has created a culture of debt.”
One of the few young participants to not carry any debt said she felt punished for her refusal to have a credit card. She was refused a cell phone, and had encountered embarrassing situations during business travel because she did not have a credit card. Barnhart said this system of penalizing consumers for not using credit is one of the problems.
“Your credit score is this big black box mystery,” she said. “There are three companies in the entire country that control this information, and they make the rules and the equation is secret. So people are told to get credit cards, but not use them. For some, this is equivalent to filling your freezer with ice cream and telling you not to eat it.”
Barnhart would like to next do a study about how norms, values, and habits have changed since the economic crisis. However, she said financial literacy is still the missing link in American society. She and Peñaloza believe that financial literacy classes should be required in schools, and that these classes should not only address credit card fees and compound interest, but also critique debt as a cultural value.
“It’s easy to sit back and blame consumers for just spending too much, but the truth is we have an entire infrastructure set up to support, maintain and encourage credit card use and debt,” Barnhart said. “I would love to see economics back in high school classes that addresses how to manage household finances. And firms need to step up. The 2010 credit card reform was a step in the right direction, but more needs to be done.”
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Friday, April 29, 2011

The Rewards of Doing “Something”

People don’t really care what they’re doing — just as long as they are doing something. That’s one of the findings summarized in a new review article published in Current Directions in Psychological Science, a journal of the Association for Psychological Science.
When psychologists think about why people do what they do, they tend to look for specific goals, attitudes, and motivations. But they may be missing something more general – people like to be doing something. These broader goals, to be active or inactive, may have a big impact on how they spend their time.
Author Dolores Albarracin of the University of Illinois at Urbana-Champaign says she started paying attention to people’s different levels of activity in various countries and saw how much busier people are in the US relative to other areas. “People have this inclination to do more, even if what they do is trivial,” she says. In recent years, she has been doing research on how people feel about activity, including how easily she could change the level of activity that people aimed for. In one set of experiments, for example, she found that getting people to think about physical activity made them more interested in political activity. Albarracin co-wrote the review article with Justin Hepler and Melanie Tannenbaum, also of the University of Illinois at Urbana-Champaign.
Experiments have shown that the desire for activity is quite strong; people will go to a lot of trouble to maintain their desired level of activity, which can include unhealthy behaviors. Many psychologists have “the idea that people have these highly specific goals,” Albarracin says. “But quite often some significant proportion of our time is engaged in this global level—we want to do something, but what we do ends up not mattering much. You could end up with productive behavior, like work, or impulsive behavior, like drug use.”
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Our own status affects the way our brains respond to others





Our own social status influences the way our brains respond to others of higher or lower rank, according to a new study reported online on April 28 inCurrent Biology, a Cell Press publication. People of higher subjective socioeconomic status show greater brain activity in response to other high-ranked individuals, while those with lower status have a greater response to other low-status individuals.
These differences register in a key component of the brain's value system, a region known as the ventral striatum.
"The way we interact with and behave around other people is often determined by their social status relative to our own, and therefore information regarding social status is very valuable to us," said Caroline Zink of the National Institute of Mental Health. "Interestingly, the value we assign to information about someone's particular status seems to depend on our own status."
The findings in humans are largely consistent with earlier observations in monkeys. Researchers had shown that monkeys direct their attention to others of higher or lower status depending on their own position in the troop.
Zink's team wanted to know whether this principle holds in humans. They used functional magnetic resonance imaging (MRI) to measure brain activity in the ventral striatum while research participants of varying social status were shown information about someone of relatively higher status and information about someone of relatively lower status. Those studies showed that the brain's response to status cues varied depending on an individual's own subjective status.
"The value that we place on particular status-related information—evident by the extent our brain's value centers are activated—is not the same for everyone and is influenced, at least in part, by our own subjective socioeconomic status," Zink said.
The findings surely have important implications for our social behavior and social lives, she added. After all, humans, like all social animals, determine appropriate actions toward others based on an assessment of their social status.
Zink said that socioeconomic status isn't based solely on money but can also include factors such as accomplishments and habits. Socioeconomic status is also just one hierarchical system among many that humans belong to and that can influence our everyday interactions.
And of course, our socioeconomic status isn't fixed; it shifts over time, for better or for worse. Exactly how the brain will respond to such changes is an intriguing question for future study.
"As humans, we have the capacity to assess our surroundings and context to determine appropriate feelings and behavior," Zink said. "We, and our brain's activity, are not static and can adjust depending on the circumstances. As one's status changes, I would expect that the value we place on status-related information from others and corresponding brain activity in the ventral striatum would also change."o
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Thursday, April 28, 2011

THE NEW MOBILE SHOPPER – FROM "ARMED TO CHARMED"


New York, NY: Shoppers will become increasingly sophisticated in their use of mobile phones to inform buying decisions and facilitate purchases while in the retail environment, according to new research. Rather than regarding these shoppers as potential threats, Ogilvy advises marketers to adopt a mobile CRM (mCRM) approach by shifting their perspective from “armed to charmed” and embrace openness and transparency to build trust and maximize long term customer value.
OgilvyOne and OgilvyAction conducted research among 1,500 shoppers in the US, UK, and Singapore revealing that Innovators are advanced users of mobile phones in the retail environment, foreshadowing mainstream consumer behavior*:
  • Not surprisingly, 85% of Innovators searched Google from a phone while in a store to get information on a product. Already 24% of the Early Majority are doing this, with the number increasing to 50% of the Early Majority who own Smart Phones
  • 77% of Innovators scanned a barcode or QR code with a mobile phone while 19% of the Early Majority are already doing this, increasing to 40% of the Early Majority who own Smart Phones
Widespread adoption of online buying behaviors also foretells of rapid transfer of these behaviors to the mobile environment*:
  • 85% of Innovators looked at a product in-store and then ordered it online while 71% of innovators looked at a product in-store and then ordered it from a phone while still in the retail environment. While 66% of the Early Majority have looked at a product in store and ordered it online, only 8% have ordered it from their phone, suggesting this is an area of growth
  • 79% of Innovators asked a store to match a price by showing a web page from a print-out while 71% of Innovators asked a store to match a price by showing a web page from a phone. 45% of the Early Majority have asked for a price-match using a web page print-out, but only 12% of the Early Majority have used a phone to display a web page at the point of purchase
Phil Buehler, OgilvyOne New York’s head of planning, said, “While the behavior of the Innovators gives a clue of where the mainstream might be headed, it’s the behavior of the Early Majority that clearly indicates that consumer engagement with mCRM is a trend, not just a fad. We can also observe that mobile activities follow online behavior, which gives us a good way of predicting where mobile behavior in the retail environment is headed.”
Martin Lange, Ogilvy’s global head of mobile, said, “The future of retail is at an interesting inflexion point and marketers should heed the lessons learned from the music industry. Rather than adopt an adversarial approach by taking defensive action, brands and retailers should turn customers from ‘armed to charmed’ by understanding what the unmet shopper needs are and addressing these by offering utility and transparency.  What you win is trust, the basis for maximizing lifetime customer value. This has the potential to elevate mobile shopper marketing from being a price-driven, tactical, one-off channel to become a tool to activate shoppers and build long term loyalty. ”

The research showed that “better customer service” and “loyalty points” were the top two reasons that respondents had for “checking into” a retail store. 55% of mainstream consumers wanted better customer service while 50% seek loyalty points, indicating strong consumer demand for mCRM, the practice of building relationships with customers through the mobile channel.
Gareth Ellen, Director of Digital for OgilvyAction, said, "Mobile is now an essential shopper marketing and retail activation touchpoint. It is clear from our research that shoppers are using mobile sites, apps and utilities to assist in their purchase decisions and as a result, we see a huge opportunity in using mobile technology to both activate sales and then build longer term customer loyalty."
Four recommendations for effective mCRM
Mobile, even more than online, forces marketing to refocus from pure messaging to offering unprecedented levels of service, utility, and value in an open and transparent manner.
1. Be holistic
  • Integrate mobile into the overall CRM and marketing program
  • Understand mobile as an accelerator rather than a separate silo
2. Assimilate data
  • New dimensions have been added e.g. location, companions, etc, to the already existing set of data, allowing for a much better prediction of context and intent within this context
  • Ensure data collected via mobile is integrated into broader CRM channels (and vice versa)
3. Integrate into social strategy
  • Nurture recommendations through existing social platforms via the mobile device
  • Monitor sentiment around brand, according to both time and location variables
4. Provide value beyond price
  • Extend the perception of value beyond price to encompass utility, information and education e.g. inventory, origin, ingredients, etc, and customer service
To gain some insight into how consumers are using their mobile device at retail, visit sellorelse.ogilvy.com to watch a two-minute video filmed in San Francisco, London and Singapore.
*Source: OgilvyOne & OgilvyAction Global Mobile Retail Study. US figures only.
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A Classic One Again

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Wednesday, April 27, 2011

It’s a High-Tech Mother’s Day

Electronic gifts for Mom are the gift of choice this year, as more than nine of 10 consumers (91%) plan to celebrate Mother’s Day. Total spending is estimated to reach $15.7 billion, according to the annual Brand Keys Mother’s Day survey.

Celebrants intend to spend an average of $148.00 this year, up nearly five percent over last year. Men, following a long-time pattern, intend to spend more than women, reporting an anticipated average “spend” of $176. Women reported an anticipated spend of $120.

“Gifts for Mom are going high-tech this year,” noted Robert Passikoff, Brand Keys (
www.BrandKeys.com) founder and president. “Along with the traditional 3Cs – cards (greeting and gift), candy, and clothing – consumers have turned their focus to electronics this year. Consumers are still shopping smarter and looking for bargains, but this year high-tech products are the gift of choice with shoppers indicating that they are going to buy Mom electronic book readers (25%), tablets (19%), smartphones (15%), computers (9%), and cameras (6%). Those are the gifts at the top of consumers’ shopping lists.”
MethodologyBrand Keys, Inc., the New York City-based brand and customer loyalty research consultancy, as part of its bi-annual Customer Loyalty Engagement Index, polled 5,000 men and women, ages 18-60, and asked if and how they were planning to celebrate Mother’s Day. Here’s what they found (percentages in parentheses indicate changes from last year).
What They’re Buying
Cards 97% (unchanged)
Flowers 70% (+1%)
Brunch/Lunch/Dinner 58% (+1%)
Gift Cards 58% (+2%)
Clothing 36% (+4%)
Jewelry 25% (unchanged)
Electronics 20% (+10%)
Spa Services 17% (+2%)
Books 15% (-7%)
Candy 5% (unchanged)

“The largest increases in gift categories were Electronics (+10%) and Clothing (+4%), both areas in which consumers had cut back in recent years,” noted Passikoff. “Generally all other areas showed little or no change from last year.”

Except books. “That’s the only category that showed a decrease from last year, and based on buying intentions, traditional books are being replaced with electronic readers,” noted Passikoff. As to shopping venues, Discount, Specialty and On-line stores are all up 5%. Department Stores and Catalogs remain unchanged from last year.
Where Are They Shopping?
Discount Stores 43% (+5%)
Department Stores 35% (unchanged)
Specialty Stores 50% (+5%)
On-line Stores 30% (+5%)
Catalog 20% (unchanged)

Whatever they buy and wherever they buy it, folks still intend to “connect” with Mom. In-person visits are down slightly, “probably due to the cost of gasoline forcing people to drive less,” noted Passikoff, “but phone calls to all those new smartphones seem likely to take up the slack.”

Phone 55% (+5%)
Personal Visits 30% (-5%)
Cards 13% (unchanged
On-line 5% (unchanged)

While the second-biggest consumer-spending holiday behind Christmas, Chanukah, and Kwanza, Mother’s Day involves a broader spectrum of relationships, embracing step-moms, female relatives and friends. Changing family dynamics, including divorced and single parent households, and the fact that this holiday crosses all ethnic, cultural, and religious boundaries, makes it a real opportunity for retailers.

“Mother’s Day has become a universal holiday. People are feeling better about the economy and about the future,” said Passikoff. “And while there are still times where consumers watch their wallets, this year Mother’s Day isn’t one of them.
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Tuesday, April 26, 2011

It’s All About Control

Having power over others and having choices in your own life share a critical foundation: control, according to a new study published in Psychological Science, a journal of the Association for Psychological Science. The paper finds that people are willing to trade one source of control for the other. For example, if people lack power, they clamor for choice, and if they have an abundance of choice they don’t strive as much for power.
“People instinctively prefer high to low power positions,” says M. Ena Inesi of London Business School. “Similarly, it feels good when you have choice, and it doesn’t feel good when choice is taken away.” Inesi and her coauthors suspected that the need for personal control might be the factor these two seemingly independent processes have in common. Power is control over what other people do; choice is control over your own outcomes.
Inesi co-wrote the study with Simona Botti, also of London Business School, David Dubois of HEC Paris, and Derek D. Rucker and Adam D. Galinsky, both of Kellogg School of Management at Northwestern University.
To find out if power and choice are two sides of the same coin, the researchers conducted a series of experiments that looked at whether lacking one source of control (e.g., power) would trigger a greater need for the other (e.g., choice).
For instance, in one experiment, participants started out by reading a description of a boss or an employee and had them think about how they would feel in that role. That meant some people were made to feel powerful and some were made to feel powerless. Then the participants were told they could buy eyeglasses or ice cream from a store that had three options or a store that had fifteen options. People were willing to go through great lengths (i.e., drive farther or wait longer) to access the store with more options. Lacking power made people thirsty for choice.
In another set of experiments, when people were deprived of choice, they displayed a thirst for power – for instance, by expressing greater desire to occupy a high-power position. Additional experiments found that people can be content with either power or choice—or both—but that having neither makes them distinctly dissatisfied.
Inesi believes this discovery—that power and choice are interchangeable—can be useful in the workplace. “You can imagine a person at an organization who’s in a low-level job,” she says. “You can make that seemingly powerless person feel better about their job and their duties by giving them some choice, in the way they do the work or what project they work on.” This research gets at “the fundamental and basic importance of control in people’s lives.”
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Social Media

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Monday, April 25, 2011

Real People - Real Brands

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Sunday, April 24, 2011

Hyperchannel Retail


A slightly updated version of the chart describing the various development taking place in retail the next then years to come, from Retailomania/MORM.o
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Getting Back To Growth


Download the 42-page Deloitte Report Global Powers of the consumer products industry 2011 by clicking here.
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Saturday, April 23, 2011

Becoming a Vampire Without Being Bitten. A New Study Shows That Reading Expands Our Self-Concepts.

“We read to know we are not alone,” wrote C.S. Lewis. But how do books make us feel we are not alone?
“Obviously, you can’t hold a book’s hand, and a book isn’t going to dry your tears when you’re sad,” says University at Buffalo, SUNY psychologist Shira Gabriel. Yet we feel human connection, without real relationships, through reading.  “Something else important must be happening.”
In an upcoming study in Psychological Science, a journal of the Association for Psychological Science, Gabriel and graduate student Ariana Young show what that something is: When we read, we psychologically become part of the community described in the narrative—be they wizards or vampires. That mechanism satisfies the deeply human, evolutionarily crucial, need for belonging.
The researchers recruited 140 undergraduates for the study.  First the participants were assessed on the extent to which they meet their needs for connection by identifying with groups. Then some read a passage from the novel Twilight in which the undead Edward describes what it feels like to be a vampire to his romantic interest Bella. Others read a passage from Harry Potter and the Sorcerer’s Stone in which the Hogwarts students are separated into “houses” and Harry meets potions professor Severus Snape. Participants were given 30 minutes to read the passage and were instructed to simply read for their own pleasure.
Then, two measures gauged the participants’ psychological affiliation with vampires or wizards. In the first, the students were instructed to categorize—as quickly and accurately as possible—“me” words (myself, mine) and “wizard” words (broomstick, spell, wand, potions) by pressing the same key when any of those words flashed on the screen; they pressed another key for “not-me” words (they, theirs) and “vampire” words (blood, fangs, bitten, undead).  Then the pairs were reversed. Gabriel and Young expected participants to respond more quickly when “me” words were linked with a group to which “me” belonged, depending on which book they read.
Next the researchers administered what they called the Twilight/Harry Potter Narrative Collective Assimilation Scale, consisting of questions indicating identification with wizards or vampires. Examples: “Do you think you might be able to make yourself disappear and reappear somewhere else?” and “How sharp are your teeth?” Finally, short questionnaires assessed participants’ life satisfaction and mood.
As predicted, on both measures, Harry Potter readers “became” wizards and the Twilight readers “became” vampires. In addition, participants who were more group-oriented in life showed the largest assimilation effects. Finally, “belonging” to these fictional communities delivered the same mood and life satisfaction people get from affiliation with real-life groups.
“The study explains how this everyday phenomenon—reading—works not just for escape or education, but as something that fulfills a deep psychological need,” says Young. And we don’t have to slay any boggarts or get bitten to feel it.
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Future of Advertising

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Friday, April 22, 2011

The Future of Retailing

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Retail Renegades

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Social Gaming

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iDea Next?

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Wednesday, April 20, 2011

Chinese Social Media Report

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Tuesday, April 19, 2011

‘I’m a Mac’ – So What?

Companies spend millions to develop their brand’s personality, in hopes that it can help sell products. But they’ve had no way of measuring whether that personality actually appeals to consumers. Now, research from North Carolina State University lays out a system for measuring the appeal of a brand’s personality.
“We developed this means of measuring brand personality appeal (BPA) so companies can figure out how favorably their brand personality is viewed by consumers – and what they can do to enhance that personality’s appeal to their market,” says Dr. David Henard, an associate professor of business management at NC State and co-author of a paper describing the study.
The concept of brand personality helps consumers form attachments to specific brands. For example, Apple has its “I’m a Mac…And I’m a PC” campaign, which brands its products as young and hip. But does that brand personality actually get people to buy anything?
“Until now, researchers have only been able to determine whether a company has a brand personality,” Henard says. “The only existing scale was Aaker’s Brand Personality Scale, which could determine whether a brand personality is rugged, sophisticated, competent, exciting or sincere.
“What we’ve done here is develop a system that digs deeper to help companies link brand personality to concrete outcomes. For example, does the brand personality actually make people want to buy their product?”
The researchers first broke BPA down into three components: favorability, originality and clarity. Favorability is how positively a brand personality is viewed by consumers. Originality is how distinct the brand personality is from other brands. Clarity is how clearly the brand personality is perceived by consumers. For example, Ford trucks are clearly recognized as having a “rugged” brand personality. A brand personality’s appeal is determined according to the interaction of these three variables.
The researchers then used these three variables to establish a measurement system for BPA. The system consists of 16 questions that provide information on each of the three BPA variables. The questions can be applied to any brand personality, from Mercedes Benz to Mary Kay. By assessing consumer responses to these 16 questions, a brand personality is graded on its overall favorability, originality and clarity.
For example, a company may find that its brand personality has a moderate rating on favorability, but is viewed as highly original and clearly defined. High marks for originality and clarity make the brand personality more appealing than the moderate favorability rating might indicate. It also tells a company that it needs to focus its efforts on improving its favorability rating, rather than distinguishing itself from competitors, in order to boost the brand personality’s overall appeal.
“This work gives us a much more thorough understanding of how the mechanics of brand personality work on consumers,” Henard says.
The paper, “Brand personality appeal: conceptualization and empirical validation,” was co-authored by Henard; Dr. Traci Freling, of the University of Texas-Arlington; and Dr. Jody Crosno, of West Virginia University. The paper is forthcoming from the Journal of the Academy of Marketing Science.

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The App That Tells

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I Like Your Face—but why?

Whether you’re dating, job seeking, or running for office, an attractive face can get you far. But what makes a face attractive? Most studies have found we’re drawn to “average” faces, as well as those whose features fit conventionally with one gender or the other—“masculinity” in men, “femininity” in women.
Except, that is, when we’re drawn to “feminine” male faces—or our reactions are mixed.
Psychologists Christopher P. Said of New York University and Alexander Todorov of Princeton University surmised that attractiveness is more complex than those two qualities. So they designed a computer model to tease out and measure the complexities.  Their findings, published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, help resolve the contradictions in earlier research and enrich our understanding of what draws people to each other.
For their study, Said and Todorov used a “face space,” a computerized map that treats facial features as “dimensions,” or axes, and faces as abstract points in the space.  The face space allowed the researchers to test not just two factors, as previous studies had done, but 50 dimensions. They divided these into two categories—“shape,” such as nose size or plumpness of lips; and “reflectance,” or facial lightness, darkness, and color, such as shadowed eyes or red lips—to see how those qualities interact with averageness and gendered attractiveness.
The psychologists then created a computer program that took thousands of faces and their ratings, from 20 male and 20 female students rating opposite-gender faces, and learned to associate each facial dimension with attractiveness. It could also tell how far, and in which direction, a face had to move in relation to the average to become more attractive.
When Said and Todorov submitted computer-generated faces to the critical “eye” of the program, the results revealed newfound subtleties.
“In female faces, what males typically want is the shape to be feminine and the reflectance to be feminine,” said Said. He gave the examples of plump lips and wide eyes. “For male faces, women want the reflectance to be masculine”—swarthier skin, “but the shape to be feminine.”
In other words, masculine and feminine attractiveness are not equal and opposite. Each taste comprises many flavors, some of which are more piquant than others. “This paper helps sort out the uncertainty about whether masculinity is attractive or not in male faces,” noted Said. In fact, it is and it isn’t.
Even the attraction of “average” faces turned out to be less straightforward than previously found. Both men and women deemed average faces attractive, but the most average were not the most attractive.
The authors caution that the study has limitations. An artificial face isn’t the same as a real face. Also, raters differ, and their conclusions reflect only the opinions of a few dozen college students. So a computer program can pinpoint the attractiveness of an artificial face in theoretical space. But beauty is still in the eyes of the unique human beholder.

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Monday, April 18, 2011

The BRIC countries’ Hainan summit could make the G20 redundant

"The West’s political and financial elite is still a very long way from grasping the extent to which the global centre of economic gravity is now shifting – and the implications in terms of relative and absolute living standards." Read the rest of this The Telegraph article by clicking here.

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Pasta with salad or salad with pasta?



Dieters are so involved with trying to eat virtuously that they are more likely than non-dieters to choose unhealthy foods that are labeled as healthy, according to a new study in the Journal of Consumer Research. It seems dieter focus on food names can work to their disadvantage.

“Keeping your weight-loss goal in mind as you scan the lunch menu at a café, you are careful to avoid pasta selections and instead order from the list of salad options,” write authors Caglar Irmak (University of South Carolina), Beth Vallen (Loyola University), and Stefanie Rosen Robinson (University of South Carolina). “But before you congratulate yourself for making a virtuous selection, you might want to consider whether your choice is a salad in name only.”

These days, restaurant salads can include ingredients that dieters would be likely to avoid (meats, cheeses, breads, and pasta). Potato chips are labeled “veggie chips,” milkshakes are called “smoothies,” and sugary drinks are named “flavored water.” Why are dieters, who are supposedly more attuned to healthy foods, likely to be confused by these labels?

“Over time, dieters learn to focus on simply avoiding foods that they recognize as forbidden based on product name,” the authors explain. “Thus, dieters likely assume that an item assigned an unhealthy name (for example, pasta) is less healthy than an item assigned a healthy name (for example, salad), and they do not spend time considering other product information that might impact their product evaluations.” Non-dieters do not learn to avoid foods based on names and, given that they are not focused on healthful eating, are more likely to dismiss cues that imply healthfulness, including name.
Participants in one study were presented with a mixture of vegetables, pasta, salami, and cheese, served on a bed of fresh romaine lettuce. The item was either identified as “salad” or “pasta.” When it was called pasta, dieters perceived it as less healthy. In another study, participants were given samples of a product, which was labeled either “fruit chews” or “candy chews.” “Dieters perceived the item with an unhealthy name (candy chews) to be less healthful and less tasty than non-dieters,” the authors write. As a result, dieters consumed more of the confections when they were called “fruit chews.”
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Why Do Hopeful Consumers Make Healthier Choices than Happy Ones?



Happy people are more likely to eat candy bars, whereas hopeful people choose fruit, according to a new study in the Journal of Consumer Research. That’s because when people feel hope, they’re thinking about the future.

“Most of us are aware that we often fall victim to emotional eating, but how is it that we might choose unhealthy or healthy snacks when we’re feeling good?” write authors Karen Page Winterich (Pennsylvania State University) and Kelly L. Haws (Texas A&M University).

Because previous research has explored how feeling sad leads to eating bad, the authors focused on the complicated relationship between positive emotions and food consumption. “We demonstrate the importance of the time frame on which the positive emotion focuses and find that positive emotions focusing on the future decrease unhealthy food consumption in the present,” the authors write.
To understand why someone who is feeling positive would be more likely to choose a candy bar versus a piece of fruit, the authors teased out the difference between positive feelings that arise from thinking about the past or the present (pride and happiness) and hope, which is a more future-oriented emotion.
In the authors’ first study, hopeful participants consumed fewer M&Ms than people who experienced happiness. In a second study, the authors found that consumers who were more focused on the past chose unhealthy snacks, even if they felt hope. In the third study, the researchers shifted the time frame of the positive emotion (having participants feel hopeful about the past or having them experience pride in the future). “That is, if someone is anticipating feeling proud, she prefers fewer unhealthy snacks than someone experiencing pride.”

Finally, the authors compared future-focused positive emotions (hopefulness, anticipated pride) to future focused negative emotions (fear, anticipated shame). They found that the combination of positivity and future focus enhanced self- control.
“So, the next time you’re feeling well, don’t focus too much on all the good things in the past. Instead, keep that positive glow and focus on your future, especially all the good things you imagine to come. Your waistline will thank you!” the authors conclude.
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Early Product Launches: How will Consumers Respond?



A new study in the Journal of Consumer Research explains why consumers often indicate they are willing to pay more for a product that is not yet available—but are reluctant to pay that price when the product is ultimately launched.

The answer lies in the consumers’ distance from the purchase. “In many product evaluations, a purchase is somehow removed from one’s direct experience,” write authors Torsten Bornemann and Christian Homburg (both University of Mannheim, Germany). For example, consumers may evaluate a preannounced new product long before it is available for purchase (temporal distance), or they may evaluate a product for someone else rather than for themselves (social distance).
The researchers discovered that consumers who evaluated a high-priced product when the purchase was temporally or socially distant tended to interpret high prices as reflecting high quality. “Consumers who face an immediate purchase, however, focus more on the role of price as an indicator of monetary sacrifice,” the authors write.

“An examination of the underlying cognitive processes reveals that psychological distance leads people to focus more on the benefits of a product, thus increasing the likelihood of price-quality as opposed to price-sacrifice inference,” the authors write.

Sometimes consumers evaluate products first from a distant perspective (like a product preannouncement) and later from a closer perspective (when a product is launched and available for purchase). In one study, the authors simulated a prennouncement and subsequent launch of a product. They showed that once the participants evaluated the item’s price from a distance, their perceptions of the quality of the product “stuck.” Those consumers were more willing to pay more than participants who had no prior exposure to the product’s price.

“Consumers often delay the adoption of a newly introduced product because they feel its price is too high,” the authors write. “Our findings suggest that consumers’ reluctance due to sacrifice-related concerns at the time of launch may be attenuated by announcing the product’s price well in advance of the actual product launch.”
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How Do Consumers Judge Quality? It Depends on Who’s Making the Purchase

Someone is more likely to predict the quality of a product by its price if someone else is buying it, according to a new study in the Journal of Consumer Research. But when consumers buy products themselves, they are more likely to judge quality by a product’s attributes.

“Consider the following scenario: you observe that a friend has bought a well- designed attractive handbag for a surprisingly low price. What inference would you draw regarding the quality of that bag?” write authors Dengfeng Yan and Jaideep Sengupta (both Hong Kong University of Science and Technology). According to the authors, you’d be more likely to believe the bag was of low quality because of its low price—more so than if you’d bought it yourself.

The researchers found that the way people assess quality based on price or attributes has to do with distance—both temporal and psychological.

In a series of studies, the authors asked participants to predict the quality of different products (like yogurt and laptop computers) on the basis of price and attribute information. They were asked to imagine that they made the purchase or someone else did. Results consistently showed that the influence of price was greater when judgments were made on the basis of someone else’s (rather than one’s own) purchase, whereas the reverse was true regarding the product’s attributes.

People tend to rely on more abstract thinking to form their judgments when events are psychologically removed, the authors explain, for example when it has to do with other people or with a distant future. The authors posit that thinking about price is more abstract than thinking about attributes. “In one such study, participants were asked to imagine making a computer purchase either the next day or two months later,” the authors write. “In support of our arguments, price had a weaker impact when participants imagined the purchase was for the next day.”

“Our findings have clear implications for retailers and salespeople who are seeking to influence quality perceptions,” the authors write. “If marketers wish to signal high quality through high price (a strategy that has long been in use), they should try to increase the psychological distance between the consumer and the product.” For example, they could advise consumers to think of using the product in the relatively distant future, or to consider how friends might feel about the product.
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