Want brand loyalty? Scare your customers

Consumers will cling to a product like Coke for comfort if watching a scary movie on their own, a new study from UBC’s Sauder School of Business shows. This finding contradicts industry norms which see significantly fewer product placements in horror films compared to other genres.

“People cope with fear by bonding with other people. When watching a scary movie they look at each other and say ‘Oh my god!’ and their connection is enhanced,” says newly graduated Sauder PhD student Lea Dunn. “But, in the absence of friends, our study shows consumers will create heightened emotional attachment with a brand that happens to be on hand.”

In her forthcoming Journal of Consumer Research paper, Dunn demonstrates that consumers who experience fear while watching a film feel a greater affiliation with a present brand than those who watch films which evoke happiness, sadness or excitement.

A further study reveals that fear stimulates people to report greater brand attachment, even if they are limited to just seeing the product. Finally it was shown that enhanced feelings toward the brand were only generated if it was experienced at the same time as fear. If the product is presented afterward, no bond is created.

“Marketers are afraid of fear. Their worries about negative associations outweigh their desire to tap into the massive market commanded by fear-based entertainment such as horror films or video games,” says Dunn. “But our study shows advertisers should consider offering up their brands as something to cling to in the dark when the knives come out and the blood starts to splatter.”

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Want brand loyalty? Scare your customers

The Power of Packaging

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

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

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

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

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

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

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

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

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

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

The Power of Packaging

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

Social networks are commonplace in this day and age, and how we fit in may depend on anything from political affiliation, to religion, to even our own personality traits. According to a new study published in the Journal of Consumer Research, consumers who are okay with being rejected from a group are more likely to purchase things that set them apart from the norm. 

“We examined when and why exclusion from social networks might lead consumers to prefer distinctive products,” write authors Echo Wen Wan (University of Hong Kong), Jing Xu (Peking University), and Ying Ding (Renmin University of China).

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

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

For brands using a popularity appeal to promote their product line, the authors’ findings offer insight into how consumers’ psychological states of belongingness influence their spending habits. “For consumers who feel excluded from a brand, using a ‘uniqueness’ appeal might elicit a more positive response than emphasizing the popularity of the product,” the authors conclude. 

Consider Pepsi’s slogan “Something for Everyone.” People feeling rejected due to their lifestyle habits might drink a Pepsi in an attempt to fit in. On the other hand, American Airlines’ “Something Special in the Air” campaign might work well for people who have recently broken up with their girlfriend or boyfriend. 

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

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

The images people share on social media — photos of favorite products and places, or of themselves at bars, sporting events and weddings — could be valuable to marketers assessing their customers' "top-of-mind" attitudes toward a brand. Carnegie Mellon University researchers have taken a first step toward this capability in a new study in which they analyzed five million such images.

Eric Xing, associate professor of machine learning, computer science and language technologies, and Gunhee Kim, then a Ph.D. student in computer science, looked at images associated with 48 brands in four categories — sports, luxury, beer and fast food. The images were obtained through popular photo sharing sites such as Pinterest and Flickr.

Their automated process unsurprisingly produced clusters of photos that are typical of certain brands — watch images with Rolex, tartan plaid with Burberry. But some of the highly ranked associations underscored the type of information particularly associated with images and especially with images from social media sites.

For instance, clusters for Rolex included images of horse-riding and auto-racing events, which were sponsored by the watchmaker. Many wedding clusters were highly associated with the French fashion house of Louis Vuitton. Both instances, Kim noted, are events where people tend to take and share lots of photos, each of which is an opportunity to show brands in the context in which they are used and experienced.

Marketers are always trying to get inside the head of customers to find out what a brand name causes them to think or feel. What does "Nike" bring to mind? Tiger Woods? Shoes? Basketball? Questionnaires have long been used to gather this information but, with the advent of online communities, more emphasis is being placed on analyzing texts that people post to social media.

"Now, the question is whether we can leverage the billions of online photos that people have uploaded," said Kim, who joined Disney Research Pittsburgh after completing his Ph.D. earlier this year. Digital cameras and smartphones have made it easy for people to snap and share photos from their daily lives, many of which relate in some way to one brand or another.

"Our work is the first attempt to perform such photo-based association analysis," Kim said. "We cannot completely replace text-based analysis, but already we have shown this method can provide information that complements existing brand associations."

Kim and Xing obtained photos that people had shared and had tagged with one of 48 brand names. They developed a method for analyzing the overall appearance of the photos and clustering similar appearing images together, providing core visual concepts associated with each brand. They also developed an algorithm that would then isolate the portion of the image associated with the brand, such as identifying a Burger King sign along a highway, or adidas apparel worn by someone in a photo.

Kim emphasized that this work represents just the first step toward mining marketing data from images. But it also suggests some new directions and some additional applications of computer vision in electronic commerce. For instance, it may be possible to generate keywords from images people have posted and use those keywords to direct relevant advertisements to that individual, in much the same way sponsored search now does with text queries.

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

Big Box Could Combat Online Retailers

Big box retailers may have had the secret to combatting online retailers all along: instant gratification. A new study from Columbia Business School that is published in the Journal of Consumer Research warns that the positive feelings consumers experience when receiving a discounted price fades dramatically if the consumer is then forced to wait for the product.

“This might spell trouble for online retailers like Amazon that offer discounted items and then force consumers to wait for the product,” said Columbia Business School’s Associate Professor of Marketing Leonard Lee, who performed the research with Rotman School of Management’s Associate Professor of Marketing Claire Tsai. “Our research shows that even if the wait is relatively short — as little as 15 minutes — the consumer’s enjoyment of the product decreases dramatically.”

Lee continued: “Keeping in mind that instant gratification has become a hallmark of society, brick and mortar businesses can add value to their bottom lines by offering in–store promotions on the products they know people want to experience immediately rather than waiting for delivery. This is a key competitive advantage they could have over online retailers and one that might secure their long–term survival in an expanding online marketplace.”

The research titled, “How Price Promotions Influence Post–Purchase Consumption Experience Over Time,” defies long–standing conventional wisdom that discounts cause consumers to enjoy products even more.

Lee and Tsai conducted four experiments across a variety of hedonic products to explore the consumer’s relationship between consumption and enjoyment. Lee and his research partner found that the shopping nirvana one feels for a product after they have received a discount only happens when the product is consumed immediately after it is paid for.

One experiment asked participants to purchase orange juice. All of the participants were told that the juice had the same retail price, but half of the participants received a 50 percent discount while the other half paid the full retail price. Then, half of the participants — regardless of whether they received a discount or not — drank the juice as soon as it was paid for, while the other half waited 15 minutes to consume the juice. The researchers found that when participants who had received a discount consumed the juice immediately, the experience was significantly amplified. However, when participants who had received a discount were forced to wait 15 minutes or longer, reviews of the juice were far less favorable than by those who were allowed to consume it immediately. In fact, when asked if consumers would purchase the juice in the future, those who waited said they would be less likely to purchase the item down the line.

Similar discoveries occurred when consumers were shopping for music. In a separate experiment, consumers who had to wait to download their discounted music enjoyed the music less than those who were able to download the music immediately.

“If you consider the consumer relationship from a long–term standpoint, in terms of customer satisfaction and brand loyalty, marketers in big box stores might want to pay more attention to the instant gratification factor because this is something no online retailer can provide at this time.”

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Big Box Could Combat Online Retailers

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

Consumers love a sale. In fact, when asked what makes a sale appealing, most simply say, “The price was good.” But this answer fails to acknowledge that subjective factors also contribute to the perceived value of a deal. According to new research published in the  Journal of Consumer Research, it’s possible to increase the perception of a good deal.  

“We find that the more a consumer relies on the original price when trying to determine a product’s worth, the more valuable they perceive the deal to be,” write authors Christina Kan, Donald R. Lichtenstein (both University of Colorado), Susan Jung Grant (Boston University), and Chris Janiszewski (University of Florida). “If a retailer can get a consumer to pay more attention to a $179 original list price, and less attention to a $99 sale price, when assessing the worth of a winter jacket, then the $99 sale price will seem like a better deal.” 
The study research summarizes three situations in which list prices have more influence on the estimated worth of a product and, by extension, the perceived value of the deal. In three different experiments, the authors reveal that when a consumer focuses on competing product similarities, they are more likely to consider all of the available information when judging the worth of a product. That is, both the original list price and the sale price are used to determine the perceived worth of the product. In contrast, when a consumer focuses on product dissimilarities, the consumer is more likely to consider only the sale price when determining the subjective value of the product. 

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

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

Don't Overwhelm Consumers with Too Many Images

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

“Consumers prefer product information that is presented visually in pictures rather than verbally in words. Visual presentation feels easier and faster to process, and with visual depiction consumers perceive more variety in their selection,” write authors Claudia Townsend (University of Miami) and Barbara E. Kahn (Wharton School of the University of Pennsylvania). 

The authors studied how consumers process visual information in both small and large groups of images. Their experiments used eye-tracking software to identify whether the participants processed the image groupings in a more random pattern or in a more systematic, left to right, approach similar to reading. 

The results demonstrated that while people claim to prefer visual depictions, there are choice situations in which they should take more time to process the information more deeply. The authors also determined that small image sets are key to reducing visual overload, the less systematic processing of information resulting in a negative influence on perceptual and behavioral consequences. 
An example of visual overload is in mobile apps, which heavily favor graphics in the user interface. The use of too much imagery can unintentionally lead consumers to bypass the point of purchase. 

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

Don't Overwhelm Consumers with Too Many Images

The SoDA Report Vol 2, 2013

The SoDA Report (Volume 2, 2013) from SoDA

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The SoDA Report Vol 2, 2013

Why Do Discounts Backfire When You Make Consumers Wait?

Consumers like to reap the benefits of discounts immediately (not
later), according to a new study in the Journal of Consumer Research. Consumers enjoy discounted products much less if they have to wait for them.
“Price promotions are common in the marketplace. For consumers, these promotions translate into real economic savings, guide buying decisions, encourage trial of new products, and make consumers feel smart and good about themselves,” write authors Leonard Lee (Columbia University) and Claire I. Tsai (University of Toronto). But sometimes discounts backfire, especially if consumers need to wait to enjoy the product.
The authors examined how discounts influence pleasure-related consumption experiences. They found that discounts generally make consumers happier. But they also found that paying a lower price for a product reduces the need to justify the expenditure, which causes people to pay less attention during consumption, dampening enjoyment. The relative strength of these opposing forces depends on when the product is consumed after payment—right away or after a delay.
The authors conducted four experiments involving real spending and consumption, using a variety of products (chocolates, music, orange juice) and different durations of consumption delay. In one of the experiments, participants purchased one of two types of chocolate truffles at either the regular price of $1 or a discount of 50 cents. Half of the participants consumed the chocolate right away, and the other half waited for a week before consuming the chocolate. Consumers enjoyed the chocolate less when they had to wait a week.
“Our research provides new insight for better understanding the mixed effects of discounts on sales and loyalty, offering an explanation for why discounts may increase sales in the short run, but could have negative long-term effects on customer satisfaction and brand loyalty,” the authors conclude. 

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Why Do Discounts Backfire When You Make Consumers Wait?

How Do Consumers See a Product When They Hear Music?

Shoppers are more likely to buy a product from a different location when a pleasant sound coming from a particular direction draws attention to the item, according to a new study in the Journal of Consumer Research.
“Suppose that you are standing in a supermarket aisle, choosing between two packets of cookies, one placed nearer your right side and the other nearer your left. While you are deciding, you hear an in-store announcement from your left, about store closing hours,” write authors Hao Shen (Chinese University of Hong Kong) and Jaideep Sengupta (Hong Kong University of Science and Technology). “Will this announcement, which is quite irrelevant to the relative merits of the two packets of cookies, influence your decision?”
In the example above, most consumers would choose the cookies on the left because consumers find it easier to visually process a product when it is presented in the same spatial direction as the auditory signal, and people tend to like things they find easy to process.
In one lab study, consumers were asked to form an impression of pictures of two hotel rooms on a computer screen, one of which was at the right of the screen and the other at the left, while listening to a news bulletin from a speaker placed on either side. Consumers found it easier to process the picture of hotel room located in the direction of the news and also indicated a greater preference for that room. In another study, consumers were more likely to choose soft drinks from a vending machine that broadcast a local news bulletin.
But things get a little more complicated if the signal is one we wish to avoid, like an unpleasant noise. In that case, people first turn their attention to the unpleasant noise in order to decipher the signal. Then avoidance kicks in as they voluntarily turn their attention away from the unpleasant signal.
In another set of studies, consumers examined pictures of two restaurants while listening to either annoying or pleasant music that came from their left or right side. The music was played for either a very short time (20 seconds) or a relatively long one (1.5 minutes). “The predicted impairment effect was observed when the unpleasant music was played for a longer time—now, it was the picture in the direction away from the music that was preferred,” the authors conclude. 

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How Do Consumers See a Product When They Hear Music?

VIP Loyalty Programs: Consumers Prefer Awards They Can Share

Consumers appreciate being able to share their perks with others, and will sacrifice exclusivity to do so, according to a new study in the Journal of Consumer Research.
“Companies spend billions of dollars each year on customer loyalty or VIP programs in an effort to reward loyal customers and make them feel both special and a sense of status,” write authors Brent McFerran (University of Michigan) and Jennifer J. Argo (University of Alberta). Many loyalty programs, like airline lounges, luxury boxes, and hotel rooms extend benefits to guests of the VIP, or “an entourage.”
“These entourage members have typically done nothing to earn the preferential treatment, and may potentially dilute the prestige of the services, because the perks are extended to people merely on the basis of who they know,” the authors explain. “In other words, entourage members receive undeserved perks, and these people make VIP rewards less scarce.”
The authors wondered whether extending the preferential treatment to the entourage dilutes the prestige of rewards programs. Across six studies, they found that loyalty program members value the ability to share an experience with their guests. Most surprisingly, they are willing to trade the scarce nature of preferential treatment in order to do so. For example, in one study, consumers imagined attending a dinner party with a political figure of their choice. The bigger the entourage, the more the feeling of status increased.
In another study, consumers were invited up to a luxury box during a professional football game. Those who had an entourage with them felt a higher degree of status. Finally, they showed that feelings of social connection underlie the effect. An entourage makes one feel socially connected, and these feelings of connectedness with others make consumers feel a sense of personal status.
“Scarcity and value are strongly linked. What we found most interesting was not just that people want to bring guests, but that they were willing to trade off scarcity of rewards in order to do so,” the authors write. “People are willing to trade rare rewards for more common ones, if they get to share these experiences with their friends.” 

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VIP Loyalty Programs: Consumers Prefer Awards They Can Share

People place higher value on what they’re waiting for; higher value makes them more patient

Let’s face it – no one likes to wait. We’re a culture of instant gratification. But what if the very act we dislike can actually help make us more patient and help us make better financial decisions?

According to a recent study by Ayelet Fishbach, Jeffrey Breakenridge Keller Professor of Behavioral Science and Marketing at the University of Chicago Booth School of Business, waiting actually does make people more patient, which can provide a payoff for consumers by helping them make better decisions.

Historically, research on patience has been approached by offering people the choice between a smaller reward sooner or a larger reward later. Given the choice between $10 now or $15 later, for instance, many people choose the $10 now, even though it makes them less well-off financially.

“People tend to value things more in the present and discount their worth in the future,” Fishbach says. “But my research suggests that making people wait to make a decision can improve their patience because the process of waiting makes the reward for waiting seem more valuable.”

Co-authored with former Chicago Booth postdoctoral fellow Xiani Dai, the study, titled “When Waiting to Choose Increases Patience,” was published in a recent edition of the Journal of Organizational Behavior and Human Decision Processes.

To test their hypothesis, the two researchers conducted a series of experiments in the U.S., mainland China and Hong Kong. In one study, the researchers invited participants to sign up to join a subject pool for online studies. In exchange for signing up, all participants were invited to enter one of two lotteries: one would pay out a $50 prize sooner; the other would pay out a $55 prize later.

The participants were divided into three groups, each having to wait a different amount of time before given their potential prize: the first group was told they could win $50 in three days or $55 in 23 days; the second could win $50 in 30 days or $55 in 50 days; and the third group was told they could win $50 in 30 days or $55 in 50 days, but they had to wait before choosing a potential reward.

Researchers contacted members of the third group 27 days later to ask for a decision, at which point the participants, like those in the first group, had to choose between waiting three days or 23 days to potentially receive a prize.

Fishbach and Dai found that in the first group only 31 percent of participants chose to wait for the larger reward. In the second group, that number rose to 56 percent. But among people in the third group, who had been waiting several weeks to make their choice, 86 percent chose to wait for the larger reward. Even though they were making the same choice as people in the first group ($50 in three days or $55 in 23 days), the fact that they had been waiting to choose increased their patience.

“When people wait, it makes them place a higher value on what they're waiting for, and that higher value makes them more patient,” Fishbach says. “They see more value in what they are waiting for because of a process psychologists call self-perception—we learn what we want and prefer by assessing our own behavior, much the same way we learn about others by observing how they behave.”

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People place higher value on what they’re waiting for; higher value makes them more patient

Warning of Potential Side Effects of a Product Can Increase Its Sales

Drug ads often warn of serious side effects, from nausea and bleeding to blindness, even death. New research suggests that, rather than scaring consumers away, these warnings can improve consumers’ opinions and increase product sales when there is a delay between seeing the ad and deciding to buy or consume the product.

“Messages that warn consumers about potentially harmful side effects — presumably with the intent to nudge them to act more cautiously — can ironically backfire,” says psychological scientist Ziv Carmon of INSEAD in Singapore.

Working with Yael Steinhart of Tel Aviv University and Yaacov Trope at New York University, Carmon has been exploring how adding a warning of potential side effects can impact consumer decision making. Their new findings are published in the September 2013 issue of Psychological Science, a journal of the Association for Psychological Science.

“We were struck by just how detailed, clear, and scary many warnings had become with regard to potential negative side effects of products,” says Carmon.  “It then occurred to us that such warnings might perversely boost rather than detract from the appeal of the risky product.”

Carmon and colleagues tested their hypothesis in four experiments. In one experiment, for example, smokers saw an ad for a brand of cigarettes: One version of the ad included a warning that smoking causes lung cancer, heart disease, and emphysema, while another version did not include the warning.

Predictably, participants who had the opportunity to purchase the cigarettes soon after seeing the ad bought less if the ad they saw included the warning.

In contrast, participants who were given the opportunity to purchase the cigarettes a few days later bought moreif the ad included the warning. The same outcome emerged when the researchers ran a similar experiment with ads for artificial sweeteners.

According to Carmon and his colleagues, the warnings backfired because the psychological distance created by the delay between exposure to the ad and the decision to buy made the side effects seem abstract—participants came to see the warning as an indication of the firm’s honesty and trustworthiness.

In fact, participants evaluated drugs for erectile dysfunction and hair loss that had potentially serious side effects more favorably, and as more trustworthy, when they were told the products weren’t on the shelves yet.

While conventional wisdom suggests that explicit warnings about dangerous side effect will make people think twice before taking medical risks, these findings suggest otherwise. The researchers believe that their findings are important because these kinds of warnings are so ubiquitous, accompanying many different products or services beyond medications, including medical procedures, financial investments, and sporting activities.

Given how frequently we are exposed to such warnings, Carmon hopes to bring greater attention to their potential to backfire.

“This effect may fly under the radar since people who try to protect the public — regulatory agencies, for example — tend to test the impact of a warning shortly after consumers are exposed to it,” says Carmon. “By doing so, they miss out on this worrisome delayed outcome.”

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Warning of Potential Side Effects of a Product Can Increase Its Sales

Report: Digital Shopper Relevancy

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Report: Digital Shopper Relevancy

How Do Consumers Compare Prices? It Depends on How Powerful They Feel

Your reaction to the price on a bottle of wine or another product is partly a response to how powerful you feel, according to a new study in the Journal of Consumer Research.
“The degree to which one feels powerful influences which type of price comparison threatens their sense of self-importance and, in turn, affects the perception of price unfairness,” write authors Liyin Jin, Yanqun He (both Fudan University), and Ying Zhang (University of Texas, Austin).
Variations in price are common in today’s market, the authors explain, but companies risk consumers’ wrath when those customers perceive unfairness. According to the authors, consumers have two main ways of evaluating the fairness of a price: they compare with what they’ve paid for the same item in the past (self-comparison) or they ask how the price compares with what other customers are paying (other-comparison). The authors looked at the ways consumers’ self-perceptions affected their reactions to the two kinds of comparisons.
In one study, the authors found that participants who felt powerful experienced more unfairness when it appeared that they were paying more than others. But people who did not feel powerful experienced more unfairness when they used self-comparisons. The study also revealed that “high-power” participants were more likely to get angry about unfairness and indicated they were more likely to complain about the perceived unfairness. Meanwhile the “low-power” individuals were more likely to feel sad and to use tactics to avoid thinking about the unfair price.
“Our findings suggest important ways that marketing professionals can engage customers of different power statuses,” the authors write. “For example, when marketing to high-power customers, one can better elicit preference by highlighting the special treatment that they are receiving in relation to other customers. Conversely, when the target customers are relatively low in power, loyalty may be better cultivated by highlighting the consistency in service or the level of commitment to these customers.” 

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How Do Consumers Compare Prices? It Depends on How Powerful They Feel

Mobile Marketing - No Longer Spam & Pop-up World

Image compliments of Top Marketing Schoolso

Mobile Marketing - No Longer Spam & Pop-up World

Wearing high heels can change the way you shop

When shopping for a big ticket item, such as a television, there is a checklist of things you should always do:

1. Read reviews
2. Compare prices
3. Wear high heels

If you’re uncomfortable with No. 3, you have other options. You can ride up and down the escalator, play a few games using the Wii Fit, or just go shopping immediately following your yoga class.

A new BYU study finds that consumers experiencing a heightened sense of balance are more likely to weigh the options and go with a product that falls in the middle of the high-end, low-end scale.

“If you’re someone who tends to overspend, or you’re kind of an extreme person, then maybe you ought to consider shopping in high heels,” said study author Jeffrey Larson, a BYU marketing professor.

Larson and BYU coauthor Darron Billeter have discovered that most anything that forces your mind to focus on balance affects your shopping choices as well.

In the example of the TV, balancing consumers are more likely to go with the 42-inch TV for $450 rather than the $300 32-inch set or the 50-inch screen for $650.

The study is part of an emerging area of research that examines the relationship between physical sensations and decision making. Previous studies have looked at the role of warmth, weight and hunger.

For their study, appearing in the current issue of the Journal of Marketing Research, the Marriott School authors set up experiments where balance was introduced to the consumer experience, including:

• Leaning back on a chair while shopping online
• Playing a Wii Fit game while simultaneously answering questions about product choices
• Standing on one foot while considering which printer to purchase

Other elements that could have similar effects but were not included in the experiments include making purchase decisions while on a cruise ship or walking on icy sidewalks during winter shopping.

The authors say the most important takeaway from their study is that people should be aware of how physical forces can change the way we think about things.

“We need to sit back for a minute and consider, ‘Is this really what I want, or are the shoes I’m wearing influencing my choice?’” Billeter said. “We need to be more aware of what is influencing our choices.”

The results of the study, the authors write, demonstrate that influential cognitive processes are at play as people stumble through life, regardless of whether those stumblings are literal or metaphorical.

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Wearing high heels can change the way you shop

When Do Consumers Think a Freebie Is More Valuable than a Discounted Product?

Consumers may value a free gift more than a deeply discounted promotional item, especially if it comes from a prestigious brand, according to a new study in
the Journal of Consumer Research.
“Since consumers believe the value of a free product is likely to be consistent with the value of the purchased product, pairing a free product with a high-end product may very well increase perceptions of its value,” write authors Mauricio M. Palmeira (Monash University) and Joydeep Srivastava (University of Maryland).
These days, companies often offer bonus products for free or at a low discounted price with a required purchase. For example, high-end cosmetics companies like Lancôme or Clinique offer free gifts with the purchase of a full-priced product.
In one study, participants were offered a free or discounted package of spaghetti with the purchase of a jar of organic tomato sauce for $8.95. They were then asked how much they would pay for the spaghetti individually. People offered free spaghetti were willing to pay an average of $2.95 for it, but those offered the spaghetti for $.50 were only willing to pay an average of $1.83.
When a free product is paired with an expensive product, consumers assume it is worth more than if it was offered at a low discounted price. For example, if a luxury jeweler offers a free bottle of wine with a purchase, consumers assume it isn’t cheap. But, according to the authors, customers might assume the same wine is cheaper if the jeweler offers it for $1.
“Promotions with low discounted prices devalue products more than free offers. In fact, free offers may not devalue products at all when they are paired with an expensive purchase, as consumers will use the price of the focal product to estimate the value of the supplementary product,” the authors conclude. “If Mercedes-Benz promotes a car with a free GPS system, we expect the GPS to be high quality,” the authors explain. 

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When Do Consumers Think a Freebie Is More Valuable than a Discounted Product?

Low Self-Esteem Consumers: When Does Standing Out Help You Fit In?

Consumers who buy brands to stand out may actually be trying to fit in, according to a new study in the Journal of Consumer Research.
“Our research suggests that seeking differentiation via brands may actually be another tactic to achieve belongingness,” write authors Sara Loughran Dommer (Georgia Institute of Technology), Vanitha Swaminathan (University of Pittsburgh), and Rohini Ahluwalia (University of Minnesota).
The authors explored how and why consumers use brands to stand out within a group. For example, certain brands can help consumers feel like they belong, like a college tennis player who wears Nike to display allegiance to her team. But consumers also use brands to distinguish themselves. The same player might also wear Lacoste to feel superior to her team or Converse to show her distinctive personality.
In a series of studies, the authors found that consumers with low self-esteem work extra hard to distinguish themselves within a group when they feel excluded. They do this by seeking brands that create distinction from typical members of the group based on personality, taste, traits, etc. However, when consumers with low self- esteem feel included, they still seek to distinguish themselves by seeking brands that confer status or demonstrate superiority to others in the group.
Companies often celebrate individuality in their advertising slogans—for example, “Think Different” (Apple), “Off the Wall” (Vans), and “Unlike Any Other” (Mercedes-Benz). According to the authors, companies can utilize strategies to help consumers feel like they fit in. “Brand names that address consumers’ belongingness needs by creating brand communities and engaging in social media (e.g., a Facebook page) may satiate consumers’ need for belongingness while also counterintuitively enhancing certain consumers’ (i.e., low self-esteem consumers) desire to differentiate,” the authors write.
“Companies should understand how their efforts may affect consumer belongingness or differentiation needs and how branding strategies based on differentiation can appeal to various types of consumers,” the authors conclude. 

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Low Self-Esteem Consumers: When Does Standing Out Help You Fit In?

The Blushing Shopper: Does It Matter What Else You Put in the Basket with the Anti-Gas Medication?

“Shopping basket composition can determine how consumers feel when purchasing embarrassing products. Contrary to conventional wisdom, additional purchases don’t always reduce embarrassment but may worsen it instead,” write authors Sean Blair and Neal J. Roese (both Kellogg School of Management, Northwestern University). “And when additional products do reduce embarrassment, it’s not just because they hide the embarrassing product.”
Suppose a consumer needs to buy something embarrassing like a package of anti- gas medication or foot deodorant. He might start thinking about how other shoppers will react to the purchase and try to deflect attention from the product by buying something else. However, this strategy could backfire—or even make him feel more embarrassed if he chooses something that inadvertently reinforces the impression he wants to avoid.
In one study, the authors asked people how embarrassed they would feel if they were purchasing The Complete Idiot’s Guide to Improving Your IQ. Half of the participants were purchasing only the book, but the remaining half were told they were also purchasing an issue of Scientific American and a Rubik’s cube. The results showed that the additional products made participants feel less embarrassed, but not because they hid the embarrassing book. “People felt less embarrassed because they thought the intelligent products would compensate for the book, essentially ‘canceling out’ the unintelligent impression,” the authors write. A follow-up study showed that the more people believed the additional products would balance against the embarrassing book, the more effective the products were at reducing embarrassment.
“Consumers tend to think about the products they buy holistically rather than individually, and a product’s meaning can change depending on what else is being purchased at the same time. An additional purchase can either attenuate or exacerbate embarrassment depending on whether it counterbalances or complements the embarrassing product,” the authors conclude.

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The Blushing Shopper: Does It Matter What Else You Put in the Basket with the Anti-Gas Medication?