1. Facebook ‘likes’ don’t work like marketers think they do

    March 20, 2017 by Ashley

    From the Tulane University press release:

    Social media managers who think that simply building up followers on Facebook is enough to boost a brand’s sales may not “like” a new Tulane University study featured in Harvard Business Review.

    Turns out, Facebook likes don’t work the way most brand managers think. Likes alone don’t drive purchases. If companies want to convert social media fans into more active customers, they have to engage them with advertising, said lead author Daniel Mochon, assistant professor of marketing at A. B. Freeman School of Business at Tulane University.

    “When we think of Facebook, we think of it as a very social platform. Most companies think that those social interactions will lead to more customer loyalty and more profitable customers,” Mochon said. “That’s not necessarily the case. Customers rarely post on a brand’s page on their own and typically only see a fraction of a brand’s Facebook content unless they are targeted with paid advertising”

    Mochon, Janet Schwartz, Tulane assistant professor of marketing and Dan Ariely of Duke University worked with Karen Johnson, deputy general manager of Discovery Health, to design a study using the Facebook page of the insurance company’s wellness program Discovery Vitality. Consumers can earn points for engaging in healthful behaviors, such as exercising, and redeem those points into rewards.

    The team wanted to find out if getting customers to like Vitality’s page would spur them to earn more health points. They invited new customers to take a survey and randomly invited them to like Vitality’s Facebook page. Those who weren’t invited served as a control group.

    The team monitored both groups for four months and found no difference in reward points earned, suggesting that liking the page and being involved in its social community weren’t enough to change behavior. Vitality then paid Facebook to display two posts per week to the liking group for two months. That group earned 8 percent more reward points than those in the control group.

    Authors suspect that the ads were effective because they were more likely to reach customers. Facebook’s algorithm filters content by users’ preferences and activities. When a company posts content, there’s no guarantee it will make it into their followers’ timeline unless it’s boosted content.

    “To our knowledge this is the first causal demonstration of the effect of Facebook page liking on customer behavior — specifically behavior that takes place offline,” Schwartz said. “The results suggest that Facebook pages are most effective when they are used as a form of traditional advertising rather than as a platform for social interactions.”

    The full study, “What are likes worth? A Facebook page field experiment,” is online and pending publication in the Journal of Marketing Research.


  2. Are you a ‘harbinger of failure?’

    December 30, 2015 by Ashley

    From the Massachusetts Institute of Technology media release:

    Shopping4Diet Crystal Pepsi. Frito Lay Lemonade. Watermelon-flavored Oreos. Through the years, the shelves of stores have been filled with products that turned out to be flops, failures, duds, and losers.

    But only briefly filled with them, of course, because products like these tend to get yanked from stores quickly, leaving most consumers to wonder: Who exactly buys these things, anyway?

    Now a published study co-authored by two MIT professors answers that question. Amazingly, the same group of consumers has an outsized tendency to purchase all kinds of failed products, time after time, flop after flop, Diet Crystal Pepsi after Diet Crystal Pepsi. The study calls the people in this group “harbingers of failure” and suggests they provide a new window into consumer behavior.

    These harbingers of failure have the unusual property that they keep on buying products that are taken from the shelves,” says MIT marketing professor Catherine Tucker, co-author of a paper detailing the study’s results.

    Significantly, Tucker adds, these star-crossed consumers can sniff out flop-worthy products of all kinds.

    This is a cross-category effect,” Tucker explains. “If you’re the kind of person who bought something that really didn’t resonate with the market, say, coffee-flavored Coca-Cola, then that also means you’re more likely to buy a type of toothpaste or laundry detergent that fails to resonate with the market.”

    And while strong initial sales of products normally seem like a good thing, the research reveals that is not always the case — not if it’s the harbingers of failure who are rushing out to purchase those products.

    It’s not just how many people are buying them, it’s how many of the right people are buying them and how many of the wrong people aren’t buying them,” says Duncan Simester, an MIT marketing professor and another co-author of the study.

    “Usually when you’re doing market research, the common wisdom is that people liking your product is a good thing,” Tucker adds. “But what we’ve done in this research is identify a group of people who you really want to [have] hate your product. And that changes the paradigm of market research.”

    What were they thinking?

    The paper detailing the study’s results is published in the Journal of Marketing Research. The co-authors are Simester, who is the Nanyang Technological University Professor of Marketing at the MIT Sloan School of Management; Tucker, the Sloan Distinguished Professor of Management at MIT Sloan; Eric Anderson, a professor of marketing at Northwestern University’s Kellogg School of Management; and Song Lin, an assistant professor at Hong Kong University of Science and Technology’s business school.

    The study itself draws upon two large data sets from a large chain of convenience stores that reaches across the U.S. One data set consists of weekly aggregate transactions from 111 store branches, from January 2003 to October 2009. The other data set consists of individual-level transaction data from November 2003 to November 2005.

    All told, the researchers ended up examining 77,744 customers who purchased 8,809 new products between 2003 and 2005, and then tracking the aggregate data longer to see how well those products fared. They defined a failed product as one pulled from stores less than three years after its introduction; only about 40 percent of the new products survived that long.

    In a key part of the study, the researchers studied consumers whose purchases flop at least 50 percent of the time, and saw pronounced effects when these harbingers of failure buy products. When the percentage of total sales of a product accounted for by these consumers increases from 25 to 50 percent, the probability of success for that product decreases by 31 percent. And when the harbingers buy a product at least three times, it’s really bad news: The probability of success for that product drops 56 percent.

    But what explains the consumer behavior of the harbingers of failure?

    “You could think of it as preference for risk,” Simester says. “People who are more willing to take a risk on an unusual product are more willing to take a risk in multiple categories.”

    The researchers also examined and ruled out other possible explanations of the phenomenon. For instance: The harbingers are not evidently any more tired or distracted than anyone else when choosing products.

    “It’s not the case that these people are buying goods at 2 in the morning, or something like that,” Tucker says. “They’re not inattentive. Systematically, they are able to identify these really terrible products that fail to resonate with the mainstream.”

    A result that “may end up changing management practice”

    The researchers are continuing to pursue related research and are interested in looking at how widely the “harbingers of failure” pattern holds in a variety of areas, from everyday shopping to financial markets.

    We’re certainly thinking about whether this is a much more general result than people simply buying new products,” says Simester — who, when pressed about dubious products he himself has bought, admits to having once purchased a supposedly self-cleaning cat litter box that failed to function.

    And Tucker, for her part, admits that yes, she used to drink Crystal Pepsi.

    “This paper may be slightly autobiographical,” Tucker acknowledges.


  3. Study suggests evolutionary take on consumerism

    June 30, 2013 by Ashley

    From the Concordia University press release via EurekAlert!:

    Family TV timeFrom Brad Pitt fighting zombies to Superman falling for Lois Lane, summer blockbuster season is upon us. But while Hollywood keeps trotting out new movies for the masses, plotlines barely change.

    Epic battles, whirlwind romances, family feuds, heroic attempts to save the lives of strangers: these are stories guaranteed to grace the silver screen. According to new research from Concordia University, that’s not lazy scriptwriting, that’s evolutionary consumerism.

    Marketing professor Gad Saad says evolution has hard-wired humans to be naturally drawn toward a specific set of universal narratives within cultural products. His new article in the Journal of Consumer Psychology shows that little in consumer behaviour can be fully understood without the guiding light of evolution.

    The human drive to consume is rooted in a shared biological heritage based around four key Darwinian factors: survival, reproduction, kin selection and reciprocal altruism. These fundamental evolutionary forces shape the narratives that are created by film producers or song writers,” explains Saad, who holds the Concordia University Research Chair in Evolutionary Behavioural Sciences and Darwinian Consumption, within the John Molson School of Business.

    That’s true for other pop culture products like song lyrics, which Saad says offer “one of the most direct windows to our evolved mating psychology.” From Bieber to Beyoncé, it’s all about signalling wealth and finding a mate.

    Saad explains that the focus of 90% of songs is on universal sex-specific preferences in the attributes we desire in prospective mates. Male singers show off their wealth and engage in conspicuous consumption via high status brand mentions. On the other hand, female singers refer to their own “bootylicious” physical beauty and call for “no scrubs” in order to denigrate men of low social status.

    “Romance novels, pop songs and movie plotlines always come back to the Darwinian themes of survival (injuries and deaths), reproduction (courtships, sexual assaults, reputational damage), kin selection (the treatment of one’s progeny), and altruistic acts (heroic attempts to save a stranger’s life). Movies, television shows, song lyrics, romance novels, collective wisdoms, and countless other cultural products are a direct window to our biologically based human nature,” says Saad.

    It’s not just cultural products that demonstrate the evolutionary roots of what Saad terms “Homo consumericus.” From the food we eat to the clothing we buy, we’re always under the influence of evolution.

    For Saad, the practical implications are clear: “In order to achieve commercial success, cultural products typically have to offer content that is congruent with our evolved human nature.” That means that Clark Kent will fall for Lois Lane while Superman saves the planet for a long time to come.


  4. Study suggests why appetizers are more important when dining out with friends

    June 24, 2013 by Ashley

    From the Journal of Consumer Research, Inc. press release via AlphaGalileo:

    couple on dateFirst impressions of experiences have a greater impact when consumers share the experience with others, according to a new study in the Journal of Consumer Research.

    “When consumers consume an experience alone, the end of the experience has a greater effect on their overall evaluations. On the other hand, when consumers consume an experience with others, the beginning has a greater influence on how they judge the entire experience,” write authors Rajesh Bhargave (University of Texas, San Antonio) and Nicole Votolato Montgomery (University of Virginia).

    Experiences (vacations, concerts, meals) often have multiple components that can be judged separately. For example, a consumer visiting a museum might like some paintings but dislike others, or a diner at a restaurant might love the appetizers and main course but hate dessert. How consumers judge experiences may depend on whether they are shared with others or consumed alone.

    In one study, consumers viewed a series of paintings while either seated alone or with companions. One group was shown a series of paintings beginning with the “least enjoyable” painting and ending with the “most enjoyable,” while another group was shown the same paintings in the reverse order. Consumers who were seated alone preferred the series of paintings with the “most enjoyable” painting presented last, while those who viewed the paintings with companions preferred the series with the “most enjoyable” painting presented first.

    The order of events in an experience can greatly influence overall enjoyment. Tour operators, museum curators, event planners, spa and resort managers, and others charged with creating consumption experiences should consider whether consumers tend to engage in the experience alone or with others.

    While consumers sometimes engage in experiences alone, they often share them with others and their overall evaluations are shaped by the social context in which they occur. Companies should consider the social context of a consumption experience, because consumers think differently and form different memories and evaluations when they feel bonded to others,” the authors conclude.


  5. Study examines how seating layouts influence customers

    June 20, 2013 by Ashley

    From the Journal of Consumer Research, Inc. press release via AlphaGalileo:

    new guyConsumers seated in circular arrangements feel a greater need to belong than those seated in angular layouts, according to a new study in the Journal of Consumer Research.

    “The geometric shape of a seating arrangement can impact consumers by priming one of two fundamental needs: a need to belong or a need to be unique. Consumers will be most favorable toward persuasion material (advertising) that is consistent with the primed need,” write authors Rui (Juliet) Zhu (University of British Columbia) and Jennifer J. Argo (University of Alberta).

    Seating arrangements matter in a wide variety of contexts. There are websites that provide tips on seating etiquette, guidelines on institutional seating policies, information on maximizing educational benefits through classroom chair layouts, and even software designed to create ideal seating arrangements for events such as weddings, political functions, and executive meetings.

    In a series of studies, consumers were asked to sit in either a circular or an angular seating arrangement. They were then asked to evaluate various advertisements. Circular shaped seating arrangements led consumers to evaluate persuasive material more favorably when it conveyed belonging (family- or group-oriented, majority endorsement). In contrast, consumers seated in an angular arrangement responded more favorably to persuasive material related to uniqueness (self-oriented, minority endorsement).

    It is important to understand how seating arrangements influence consumers in a wide range of settings such as restaurants, hotel lobbies, public transit, or waiting areas in airports and doctors’ offices.

    Circular shaped seating arrangements prime a need to belong while angular shaped seating arrangements prime a need to be unique. The shape of a seating arrangement, a subtle environmental cue, can activate fundamental human needs, and these needs in turn affect consumer responses to persuasive messages,” the authors conclude.

     


  6. Study suggests attractiveness of real estate agents may impact real estate prices

    June 4, 2013 by Ashley

    From the Columbus State University press release via ScienceDaily:

    mirror, agingAt least for real estate agents, it turns out that beauty is indeed more than skin deep.

    A recent study of physical attractiveness and how it impacts real estate brokers’ pay and productivity shows that the more attractive the real estate agent, the higher the listing price of the home for sale.

    Those higher listings lead to higher sales prices, meaning that beauty enhances an agent’s wage, said the report by Frank Mixon, professor of economics at Columbus State University’s Turner College of Business.

    He collaborated on the article, “Broker beauty and boon: a study of physical attractiveness and its effect on real estate brokers’ income and productivity.” with Sean P. Salter, from the Jennings A. Jones College of Business at Middle Tennessee State University and Ernest W. King from the College of Business at the University of Southern Mississippi. The article was published in the Applied Financial Economics journal last year.

    To reach their conclusions, the professors asked 402 people to look at photographs of real estate agents. The pictures were taken from the agents’ websites. Respondents were asked to rate each individual depicted for “physical attractiveness or beauty” on a scale of one to 10, with one representing “very unattractive” and 10 representing “very attractive.”

    Researchers then compared those figures to Multiple Listing Service data regarding transactions for properties that were listed between June, 2000 and November, 2007. Researchers looked at listing prices, sales prices and the time properties spent on the market before the sale was completed.

    In general, the research found that the agents who were rated more attractive had listings with higher prices and larger commissions, which comes from higher sales prices for attractive agents.

    “Given the nature of the brokerage system, this confirms our theory that beauty enhances an agent’s wage,” the researchers wrote in the report.

    “The results weren’t surprising to me,” Mixon said. “There is a growing literature in economics that relates physical attractiveness to productivity in the workplace, and to all sorts of choices people make.”

    But while prices were found to be higher for more attractive agents, the research noted that things may equal out in the long run because agents who were rated “less attractive” had more listings and more sales. The researchers note that this may “suggest that more attractive agents may be using beauty to supplement, rather than to complement, other productive activities.”

    Mixon, who also is studying the impact of physical attractiveness in other areas, said it is important to note that “attractiveness is not the ‘be all, end all’ — it just helps to tip the scales when competitors are otherwise equally talented or skilled.”


  7. Study examines why sports fans prefer ‘lucky’ products

    May 27, 2013 by Ashley

    From the University of Chicago Press Journals press release via EurekAlert!:

    Sports WatchingConsumers engage in superstitious behavior when they want to achieve something but don’t have the power to make it happen, according to a new study in the Journal of Consumer Research.

    “Preference for lucky products (those associated with positive outcomes) increases when a strong desire for control is combined with lower perceived ability to exert control. Consumers who make superstitious choices believe they will be effective in helping them achieve the desired outcome,” write authors Eric J. Hamerman (Tulane University) and Gita V. Johar (Columbia University).

    Sports fans are well known for their superstitious behavior. A current Bud Light commercial with the tag line of “it’s only weird if it doesn’t work” shows the odd ways in which NFL fans root for their teams. Robert De Niro’s character in Silver Linings Playbook engages in deeply superstitious behavior that will supposedly help the Philadelphia Eagles win.

    In one study, right-handed consumers played rock-paper-scissors. Those who won more often using their left (vs. right) hand preferred to continue playing with their left hand. This was more likely to occur among consumers with a stronger desire for control, and those who preferred to play left-handed after associating this hand with victory tended to believe they were more likely to win in the future.

    Consumers can become conditioned to associate certain products with success or failure. For example, a sports fan who was drinking a Dr. Pepper while watching his favorite team win a game might later drink Dr. Pepper—even if he would actually prefer a Coke—while watching future games in the hope that he’s giving his team an extra edge.

    Conditioned superstitions are formed when consumers associate products with success or failure. Depending on how much they wish to control their environment—and their perception of whether they can do so—consumers who make these associations may be more likely to act on them, thereby creating an illusion of control over future outcomes,” the authors conclude.

     


  8. Study examines reasons for brand affinity and aversion

    May 25, 2013 by Ashley

    From the USC Marshall School of Business press release via EurekAlert!:

    stern businessWhy do brands such as Manchester United and Apple capture hearts and minds? When consumers feel a strong emotional attachment to a brand, there is seemingly nothing we would not do–from paying more for it to defending it against detractors. For all the millions of dollars spent on advertising and other efforts, however, consumers rarely feel an affinity for brands.

    So how do marketers make consumers develop a strong attachment for a product or service? According to a recent study from USC Marshall School of Business, it is achieved by appealing to people’s aesthetic needs (enticing/annoying to the self), functional needs (enabling/disabling for the self) and spiritual needs (whether something is enriching/impoverishing). In short, brands to which we are loyal, evoke warm feelings and provide pleasure, speak to who we are and help manage the problems we have in daily life.

    “Attachment-aversion (AA) model of customer-brand relationships,” published in the Journal of Consumer Psychology and co-authored by USC Marshall’s C. Whan Park, Joseph A. DeBell Chair in Business Administration and professor of marketing; Andreas B. Eisingerich, associate professor of marketing, Imperial College (London) Business School; and Jason Whan Park, Ph.D., University of Pittsburgh, identifies three factors that must be in place in order to build strong emotional attachment to brands and, conversely, limit aversion to a product or service.

    Marketers who want to build emotional affinity for their brands need to appeal to consumers on three fronts: strong aesthetics or self-enticing properties such as the taste of deep chocolate or the sleek design of a European car, have self-enabling benefits or the ability to solve customer problems (such as Swiss Army Knife, which allows one to feel power over one’s environment) and self-enriching benefits or those that resonate with customers’ beliefs or values and support their self-identities (activated for example, by location brands such as one’s hometown, a membership to nonprofit or a luxury brand such as Rolex that is aspirational).

    These factors, the three E’s—enticement, enablement and enrichment—are critical for all brands and their interplay determines our distance to the brand: whether we are more attached or have an aversion.

    “There are many cases these days where people are very adverse to certain brands. This is a serious issue,” said Park. “Why people become so antagonistic toward a brand is based on these three reasons, when it displeases them aesthetically or doesn’t help them solve their daily problems or is contrary to their personal beliefs.

    To test their attachment-aversion model, the researchers carefully developed the four-item scale of the attachment-aversion measure and conducted three studies, assessing consumer purchasing behavior over time, based on carefully chosen products: Apple, a product brand that draws strong consumer loyalty from their compelling design and emphasis on creativity; Manchester United, a soccer franchise that tends to generate extreme reactions in Great Britain (both positive and negative); and a grocery store chain in Austria. The scholars measured attachment and aversion by looking at attitudes and actions: what consumers would do for these brands, including defending them against criticism, participating in an affiliated charity event and feeling happy (sad) when good (bad) things happened to a brand. The researchers found that their model was better able to predict consumer reactions through not only their stated future intentions, but actual purchasing behavior during the final study.

    Whether a brand was self-enriching was the stronger predictor of whether there would be a small distance/attachment or a larger distance/aversion to a brand. The researchers cite the strength of Nike’s “Just Do It” as an example. In addition, the researchers also found that the older consumers were more motivated by self-enriching qualities of brands versus self-enticing benefits (aesthetic appeal), while the opposite was true for younger consumers.

    The study also distinguished two other attitudes towards brands that marketers need to address quite differently: the mixed (both positive and negative) perceptions of a brand and indifference. Brand managers need to focus on reducing the distance between customers and a brand, by examining how much value customers perceive from the current offering of a brand with respect to those three E’s.

    Great brands simultaneously offer sensory pleasure and self-pride. Sensory pleasure comes from the self-enticing product cues (e.g., product design, package design, color, brand logo, etc.). Self-pride comes from two different sources: self-enabling benefits of a product and self-enriching message of a brand,” said Park.

    Self-enabling benefits provide a boost of self-efficacy and self-confidence. “That’s when you feel proud of yourself—when you can deal with daily problems without difficulty and feel secure,” said Park. “Self-enriching messages of a brand makes you feel good about yourself because you relate yourself to its moral values and philosophies.”

     


  9. Study suggests proximity of images affects perception of product effectiveness

    May 16, 2013 by Ashley

    From the University of Chicago Press Journals press release via EurekAlert!:

    senior_asian_manConsumers believe a product is more effective when images of the product and its desired outcome are placed closer together in advertisements, according to a new study in the Journal of Consumer Research.

    Merely changing the spatial proximity between the image of a product and its desired effect in an advertisement influences judgment of product effectiveness. Consumers tend to judge the product to be more effective when the two images are closer versus farther apart,” write authors Boyoun (Grace) Chae (University of British Columbia), Xiuping Li (National University of Singapore), and Rui (Juliet) Zhu (University of British Columbia).

    Many advertisements promoting the effectiveness of a product show both a product image (anti-wrinkle cream) and an image of the promised results (a face without wrinkles). Objectively, the distance between the two images should not affect how consumers judge the product’s quality.

    In a series of studies, consumers were asked to judge the effectiveness of a variety of products promising specific results (acne cream, pain reliever, nasal allergy spray, bug spray, fabric softener). Consumers tended to assume a product was more effective when its image was placed closer to that of its promised effect. The proximity of the images was more influential when consumers were less knowledgeable about a product category or when the results were expected sooner rather than later.

    Companies should understand the subtle effect that spatial proximity between images has on consumer judgment of product effectiveness. When companies want to promote the immediate effects of their products, images of the product and its desired effect should be put closer to each other in an advertisement.

    “The spatial proximity between visual representations of cause and effect in an advertisement can influence consumer judgments of product effectiveness. The closer the distance between an image of a product (an acne treatment) and that of its potential effect (a smooth face), the more effective consumers will judge the product to be,” the authors conclude.

     


  10. Study examines what drives Pinterest activity

    April 30, 2013 by Ashley

    From the Georgia Institute of Technology press release via ScienceDaily:

    Computer UserResearchers at Georgia Tech and the University of Minnesota have released a new study that uses statistical data to help understand the motivations behind Pinterest activity, the roles gender plays among users and the factors that distinguish Pinterest from other popular social networking sites.

    Led by Assistant Professor Eric Gilbert of Georgia Tech’s School of Interactive Computing, working in collaboration with Professor Loren Terveen from the University of Minnesota’s College of Science and Engineering, the study reveals findings that could have implications for both academia and industry:

    1. Female users have more re-pins, regardless of geographical location

    2. Men typically have more followes on Pinterest than women

    3. Four verbs set Pinterest apart from Twitter: “use,” “look,” “want” and “need”

    “Those four verbs uniquely describe Pinterest and are particularly interesting,” said Gilbert, who runs the Comp.Social Lab at Georgia Tech. “Words encapsulate the intent of people, revealing the motivations behind their actions. You can use the word ‘this’ after all of these verbs, reflecting the ‘things’ at the core of Pinterest. Many press articles have focused on Pinterest’s commercial potential, and here we see verbs illustrating that consumption truly lies at the heart of the site.”

    Pinterest, which reached 10 million users faster than any other social network, revolves around the metaphor of a pin board: users “pin” photos they find on the web and organize them into topical collections. Pinterest users can follow one another and also re-pin, like and comment on other pins. After examining more than 200,000 pins, Gilbert and his team were able to compile the first statistical overview of the site.

    We wanted to take a closer look at Pinterest because of its differences compared to other social media, including its focus on pictures and products and the large proportion of women users,” said Terveen, a co-author of the study. “These findings are an important early snapshot of Pinterest that help us begin to understand people’s activity on this site.”

    Understanding the motivations behind activity on Pinterest is key, not only for researchers but also for business wishing to utilize the site for marketing purposes. A recent market survey showed that a higher proportion of Pinterest users click through to e-commerce sites — and when they go there, they spend significantly more money than people who come from sites like Facebook or Twitter.

    “There are several social networking sites that marketers and advertisers can take advantage of these days,” said Gilbert. “After conducting this research, if I had to choose where to put my money and marketing, Pinterest would probably be my first choice.”