iPhone 5: Consumers focus too much on having the latest features, finds new study

More than 2 million consumers got to gloat Friday about their shrewdness in procuring an iPhone 5, with its larger screen and 200 additional features through its new operating system.

But once the novelty wears off, will they still enjoy their purchase?

It depends on why they bought it, says new research from a marketing professor at Olin Business School at Washington University in St. Louis.

Across five studies and four product domains,Joseph K. Goodman, PhD, assistant professor of marketing, found that consumers fail to estimate their feature usage rate before purchasing multifunctional products, which negatively affects product satisfaction.

The study, “Having Versus Consuming: Failure to Estimate Usage Frequency Makes Consumers Prefer Multi-feature Products,” is forthcoming in the Journal of Marketing Research.

“We propose that consumers focus on having features instead of elaborating on how often a feature will be used, and this can lead to a decrease in product satisfaction,” Goodman says.

He and his co-author, Caglar Irmak, PhD, assistant professor at the University of South Carolina, show that this shift in preferences is due to a change in elaboration from using to having features.

The pair identifies three key moderators to this effect: need for cognition, feature trivialness and materialism.

“Consumers focus too much on just having the latest features, and don’t spend time elaborating on how often they will use the features,” Goodman says. “When they do actually elaborating on usage, then they tend to buy lower featured products and they tend to be more satisfied with their purchase, regardless of whether they buy a high or low feature product.”

What should consumers do?

“Our findings can’t tell consumers what to buy, but they do suggest that consumers should at least stop and consider how often they are going to use each new additional feature before they make their decision,” Goodman says. “This little act of consideration can lead to greater satisfaction down the road.”

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iPhone 5: Consumers focus too much on having the latest features, finds new study

How Much Product Information Do Consumers Want?

The depth of explanation about novel products influences consumer preferences and willingness to pay, according to a study led by the University of Colorado Boulder and Brown University.
When it comes to descriptions about the functions of new and unusual goods -- such as a self-watering plant system, special gloves for touchscreens or an eraser for wall scratches -- some people prefer minimal details. Dubbed "explanation foes" in the study, they gain a strong sense of understanding and desire for products through shallow explanations.
In contrast, other people -- dubbed "explanation fiends" in the study -- derive desire for products from deep and detailed explanations.
"There are these two different types of consumers," said lead author Phil Fernbach, assistant professor of marketing at CU-Boulder's Leeds School of Business. "On these two sides, consumers differ in the amount of detail that makes them feel like they understand and -- because of that feeling of understanding -- the amount of detail that will make them prefer a product."
A paper on the subject was published online today in the Journal of Consumer Research.
Researchers say the study results can help consumers make better decisions.
"We're not making a value judgment on whether it's better to be an 'explanation foe' or 'fiend,' " said Fernbach. "You don't have to want to know how stuff works, but make sure that your intuition about whether you understand a product is based on objective information and not just a feeling."
In one part of the study, participants were given varying explanations of a new tinted food wrapper product. "Explanation foes" highly rated their understanding and preference for the item when they read a simple description of how its "white coloring protects food from light that causes it to spoil, thereby keeping food fresh for longer."
"Explanation fiends" highly rated their understanding and preference for the food wrapper when they read a more detailed description of how "atoms in the tinting agent oscillate when hit by light waves causing them to absorb the energy and reflect it back rather than reaching food, where it would break the bonds holding amino acids together, thereby keeping food fresh for longer."
The study also found that "explanation foes," who are more common, tend to have an inflated sense of understanding about novel products. Their heightened perception disappears and their willingness to pay decreases when they attempt to explain how a product works.
Conversely, "explanation fiends" tend to have a more conservative sense of understanding about novel products. For them, attempting to explain how a product works does not have a negative effect on their sense of understanding and their opinion of the product stays the same or increases, according to the study.
Attitudes toward explanation were predicted by a cognitive reflection test that measures how much people naturally engage in deliberative thinking. Each test question elicits an intuitive but incorrect answer and participants who impulsively respond tend to err. These participants are the "explanation foes" who prefer less explanation.
In contrast, those who inhibit their initial responses to the cognitive reflection test and think more deeply tend to correctly answer. These participants are the "explanation fiends" who prefer more in-depth descriptions.
While the study can help consumers with better decision-making, it also yields advice for marketers.
"Marketers should target these different consumer groups with different types of explanations," said Steven Sloman, a study co-author and professor of cognitive, linguistic and psychological sciences at Brown University.
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How Much Product Information Do Consumers Want?

Accelerating your Social Strategy to Performance

Expion Keynote: Accelerating your Social Strategy to Performance from Jeremiah Owyang

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Accelerating your Social Strategy to Performance

Want to Encourage Eco-Friendly Behavior? Give Consumers a Nudge (Don’t Tell Them What to Do)

Consumers are more likely to change their behavior if they voluntarily commit to changing rather than being told what to do, according to a new study in the Journal of Consumer Research. So carefully nudge them along if you’re trying to encourage more eco-friendly behavior.
“Commitment promotes consistent changes in behavior, especially if consumers pledge specific steps to promote the desired behavior. Consumers who publicly express a commitment to the environment will reinforce their commitment and increase sustainable behavior,” write authors Katie Baca-Motes, Amber Brown (both Disney Research), Ayelet Gneezy, Elizabeth A. Keenan (both University of California, San Diego), and Leif D. Nelson (University of California, Berkeley).
Influencing sustainable behavior is an ongoing challenge in today’s world. Hotels often ask consumers to “do their part” for the environment by reusing towels, but this approach has limited success. Appeals to adhere to social norms (i.e., informing guests that the majority of guests in a hotel reuse their towels) have been shown to be more effective, yet leave an estimated 50% of hotel patrons unresponsive.
The authors studied consumers staying at a California hotel. At check-in, guests were asked to either make a general commitment to be environmentally friendly or to make a specific commitment to reuse towels during their stay. Notably, the commitment was entirely symbolic—once guests checked in, they were able to exist in anonymity and behave as they wished. To reinforce the commitment, some guests who chose to commit further received a “Friend of the Earth” lapel pin.
Asking guests to make a specific commitment to hang towels made them more likely to hang their towels. However, when they made a specific commitment to practice sustainable behavior and received a pin to symbolize that commitment, their subsequent behavior was significantly more eco-friendly. They were more likely to reuse towels as well as turn off the lights when they left their rooms.
“Rather than telling consumers what they should be doing, companies, nonprofits, or government agencies wishing to influence behavior change should consider an alternative option—one that creates an appealing opportunity for consumers to start with a small step—a non-binding commitment that will likely nudge their behavior in the desired direction,” the authors conclude. 

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Want to Encourage Eco-Friendly Behavior? Give Consumers a Nudge (Don’t Tell Them What to Do)

Under the Influence: Reminders of Money Impact Consumer Decision- Making

When reminded of money (not cost), consumers are more likely to evaluate a new product based on its primary features or brand name, according to a new study in the Journal of Consumer Research.
“Money and symbols of money are ubiquitous in our daily consumer environment, and money is linked to social resources such as security, status, power, confidence, and freedom. Mere reminders of money have the potential to signal confidence and strength and thereby impact consumers when making decisions,” write authors Jochim Hansen (University of Salzburg), Florian Kutzner (University of Heidelberg), and Michaela Wänke (University of Mannheim).
Consumers encounter money or symbols of money all the time. We earn, save, spend, or possibly lose money. We physically handle bills and coins. We are reminded of money by proverbs (e.g., A penny saved is a penny earned), songs (e.g., Money, Money, Money), and movie titles (e.g., The Color of Money). Given the importance of money in our lives, it is important to understand the psychological implications of such frequent reminders of money.
In a series of studies, the authors found that reminders of money caused consumers to think more abstractly and focus on the primary features of a product instead of its secondary features. For example, we might wonder if a television has great picture or sound quality and not pay any attention to the warranty. Or we might think about whether a yogurt is healthy or tasty but ignore the package design. Additionally, consumers reminded of money are more likely to evaluate a new product based on its brand name instead of its individual features. For example, we might think that a new bike by Mercedes must be good because Mercedes is a good brand and ignore its actual features.
“Our studies show that reminders of money influence consumer decision-making. Consumers should keep this in mind when choosing products, because they may overlook certain features when reminded of money,” the authors conclude. 

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Under the Influence: Reminders of Money Impact Consumer Decision- Making

Check In with your face

Check-In with Your Face from redpepper on Vimeo.o

Check In with your face

CRM delivering value?

Badges & Benefits: Is your loyalty program delivering value? from McKinsey Chief Marketing & Sales Officer Forum

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CRM delivering value?