Thursday, March 29, 2012

Liking and subscribing on FB, and the opposite


Budgeting backfires – shoppers unconsciously spend more when trying to limit costs

Setting a price limit when shopping often backfires, according to new research from Brigham Young University and Emory University marketing professors. The study found that merely thinking about prices leaves you likely to spend more than you would otherwise.
The researchers found that consumers spent up to 50 percent more when they started shopping with a price in mind than those who didn’t. The findings were so counterintuitive that the researchers tested them with six separate experiments, and the results held up each time.
“We don’t mean to repudiate budgeting, because its positives probably still outweigh the negatives,” said author Jeffrey S. Larson, assistant professor of marketing at BYU’s Marriott School of Management. “But it’s important for consumers to realize how budgeting can affect our thought process and actually prompt us to spend more than we intended.”
Experiments tested consumers’ thinking about buying televisions, pens, laptops, earbuds, garage doors, mattresses, Blu-ray players and luggage. Various approaches got shoppers thinking about price – they could select a target price from a set of choices, identify their own target price, select a maximum price they were willing to pay, or determine a budget for a specific purchase.
“The results were always the same – a preference for higher-quality, higher-priced items,” said Larson. “The most surprising aspect of this study was that people’s decision-making process can change so easily. Doing something as simple as asking, ‘Hey, how much would you budget for this product?’ completely changes their thinking.”
The researchers reassure us that “aggregate” budgets still achieve their intended result. It’s only when we focus on purchasing one specific product that budgeting can backfire.  They wrote, “A $100 budget for a grocery trip would not leave a shopper exaggerating quality differences between the $3 block of cheese and the $5 one.”  
The study, coauthored by Ryan Hamilton of Emory University’s Goizueta Business School, will be published in the next issue of theJournal of Marketing Research, a top journal in the field.
Our thought process
Here’s what goes on in our minds, explained Larson, who earned his doctorate at Penn’s Wharton School of Business. When we start off the purchasing decision process with price in mind, we first narrow down our options based on price. If we decide we’ll spend about $500 on a new TV, we look only at TVs around that price range. Of course, once we do that, we start to notice that higher-priced sets within that range have more features and better quality, so we lean toward those. Larson’s study found that after we screen our choices based on price, we essentially ignore price after that and focus on quality. And better quality products usually cost more.
For example, in one of the experiments, the researchers asked a group of consumers how much they would be willing to spend on a new TV. Those consumers were then given the option of choosing a TV $18 above their target price and a lower-quality one $18 below. About 55 percent of them chose the higher-priced option that was above their target price range. But among a set of consumers who were given the same options WITHOUT being asked how much they would be willing to spend, only 31 percent chose the higher-priced option.  Those who set a maximum price first also rated the difference in quality between the choices as much greater than those who didn’t.
In another experiment, research subjects were given $6 for participating in the study and given an option to purchase a steeply discounted pen on their way out. Those who were asked how much they planned to pay spent an average of $2.10, compared to the average of $1.64 spent by those who were not asked.
What should we do instead?
So if we’re concerned about spending too much, and setting a budget backfires, how in the world are we supposed to approach shopping? Don’t fret, Larson says – the fact that you’ve read this means you’re now well on your way to developing immunity to this phenomenon. There are two steps we can take to protect ourselves from the effect his study identified.
  1. After you evaluate your choices based on quality, force yourself to re-consider price. The researchers found that the effect disappeared after consumers had their attention drawn back price after they had evaluated quality. “Just knowing that the effect is there is going to be enough for most consumers to be able to overcome it,” Larson said.
  2. Start by determining what features and quality levels matter most, before you think about price. “We haven’t tested it yet, but our initial research would indicate that if you decide on the quality level you’re comfortable with, you will then focus on price and end up spending less money,” Larson said.

Saturday, March 24, 2012

Navigating the Social Media Jungle


Wednesday, March 21, 2012

The CMO Guide to Social Media 2012 has done an update of previous guides. Click here to watch an in a larger format.o

Thursday, March 15, 2012

How Do Mood and Emotional Arousal Affect Consumer Choices?

When they‟re in a positive mood, people tend to choose products that match their mood and their level of emotional arousal, according to a new study in the Journal of Consumer Research. But crabby, low-energy people will seek products to reverse those states of mind.
“We examine how consumers‟ choices are affected by the interplay between their level of arousal (i.e., the intensity of a consumer‟s mood state) and the valence (the direction of their mood state—whether consumers are in a positive or negative mood) of their current affective state,” write authors Fabrizio Di Muro (University of Winnipeg) and Kyle Murray (University of Alberta).
Although the vast majority of products, services, and experiences offered for sale are designed to be pleasant, the authors say there is a much greater variance in the level of arousal to which these offerings are designed to appeal. For example, lying on a beach and surfing are both pleasant, but lying on a beach is a low-arousal activity, as opposed to surfing, a high-arousal (intense) experience. And tea and energy drinks are both pleasant, but one is more arousing than the other.
The authors conducted experiments using scents and music to elicit arousal and mood states among participants. Then they measured people‟s preferences for experiences and products that are perceived to be either low or high arousal.
They found that in addition to regulating mood (positive or negative), consumers also make choices that are consistent with regulating their level of arousal. “For example, people who are feeling relaxed tend to choose relaxing products, whereas those who are feeling excited tend to choose exciting products,” the authors write. On the other hand, when consumers are in a negative mood they prefer products that are incongruent with both their level of arousal and their current mood. “For example, people who are in an unpleasant low-arousal mood will tend to choose pleasant high-arousal products, whereas those who are in an unpleasant high-arousal mood will tend to choose pleasant low- arousal products,” the authors write.
“In general, we find that people will demonstrate a strong preference for products that make them „feel better,‟” the authors write. “Consumers‟ product choices will be consistent with pursuing pleasant moods and mitigating unpleasant moods.” 

How Does the Order of Choices Affect Consumer Decisions?

Let‟s say you‟ve got to book a flight, choose a hotel, and rent a car. Does it matter which thing you shop for first? A new study in the Journal of Consumer Research finds that the order of choices does affect consumers‟ decisions.
“Consumers often shop for multiple products in a single trip. This research looks at whether the order in which consumers shop for the different products influences how they search for each individual product,” write authors Jonathan Levav (Stanford University), Nicholas Reinholtz (Columbia Business School), and Claire Lin (formerly Columbia Business School).
The authors tested consumers‟ reactions to different configurations by looking at a business traveler who had five possible flight options (airlines), 10 possible hotels, and 15 possible car rental options. “When we order a group of decisions by increasing choice-set size, we find that consumers search through more of the possible choice options than when we order the same set of decisions by decreasing choice-set size,” the authors write.
In other words, the business traveler in the above example would examine more of the possible hotel options when that choice is preceded by the choice of flights (five options) rather than the choice of rental cars (15 options). “This difference seems to be driven by the consumer‟s desire to maximize her choice outcome,” the authors explain. “If she starts with a choice from a small choice set, she will probably try to choose the best options from that set. This „choose the best‟ mindset tends to persist to the later choices.” In contrast, if consumers start with a larger choice set, they adopt a “good enough” mindset.
The authors believe that starting consumers with choices from small choice sets can help them become motivated to find their desired products from larger assortments.
“Our result is an interesting counterpoint to the popular research on choice overload,” the authors write. “Our results suggest that large choice sets don‟t have to be demotivating. By positioning a large choice set after smaller choice sets, a retailer may make the large choice set less daunting to the consumer.” 

Why Would Consumers Pay Less for Separate than Bundled Products?

Packaging an expensive item with a cheap one seems like a no-brainer. But according to a new study in the Journal of Consumer Research, most consumers in this situation are not willing to pay as much for a combination as they would for two separate items.
“Consumers often encounter product combinations, many of which include both expensive and inexpensive items,” write authors Aaron R. Brough (Pepperdine University) and Alexander Chernev (Northwestern University). “Logically, people should be willing to pay more for options that they like. Adding an attractive option to an existing offering might be expected to increase the offering‟s value and consumers‟ willingness to pay.”
But consumers don‟t always follow that logic. For example, consumers who were willing to pay $2000 for a flat-screen TV and $10 for a video cable when they considered them separately were only willing to pay $1950 when the two were combined. Likewise, pairing an inexpensive tote bag with a higher-priced suitcase decreased consumers‟ willingness to pay. The authors say this occurred even when consumers were willing to pay full price for each item considered alone.
Consumers tend to think in categorical terms, according to the authors. For example, when items classified as expensive or inexpensive are combined, consumers perceive the combination to be “moderately expensive.” “The problem is consumers forget that they are purchasing multiple items. As a result of the erroneous perception that a combination of expensive and inexpensive items is less valuable than a single expensive item, consumers are willing to pay less for the combination than for a single item that they perceive as „purely expensive.‟”
The authors found that the number of consumers who chose an expensive product declined by approximately 15 percent when an inexpensive item was added to it. They also found that across six different product categories (scooters, grills, phones, jackets, backpacks, and TVs) participants were willing to pay, on average, 25 percent less for a combination of an expensive and inexpensive item.
“Because including an inexpensive item in a bundle can decrease consumers‟ willingness to pay, managers may be better off selling items from different price tiers separately,” the authors conclude. 

Can One Simple Strategy Help Consumers Say “No” to Temptation?

When facing temptation, can a simple change of language make a difference? According to a new study in the Journal of Consumer Research, consumers who respond to temptation with the words “I don‟t” versus “I can‟t” are more able to resist.
“Whether it‟s buffalo wings at a tailgate or heaping plates of calories at the Thanksgiving day dinner table that is your downfall, help is merely a couple of words away,” write authors Vanessa M. Patrick (University of Houston) and Henrik Hagtvedt (Boston College).
In four studies the authors examined the difference between framing a refusal with the words “I don‟t” vs. “I can‟t.” “This insight is based on the notion that saying “I can‟t” to temptation inherently signals deprivation and the loss from giving up something desirable,” the authors write. “For instance, when faced with a tempting slice of pumpkin pie, one‟s spontaneous response, „I can’t eat pumpkin pie‟ signals deprivation. Saying „I don’t eat pumpkin pie‟ is more effective.” This approach signals to oneself (and others) a sense of determination and empowerment, which makes the refusal strategy more effective.
In one study, the authors studied 30 women for 10 days. The women were divided up into three different refusal strategies. One group was assigned the “don‟t” strategy, another was given the “can‟t” strategy, and a third group was given a generic “just-say- no” strategy. A daily email reminded the participants to use the strategies and to report instances when they worked and when they didn‟t.
The “I don‟t” strategy increased participants‟ feelings of autonomy, control, and self- awareness; and it resulted in positive behavioral change. One participant reported “a renewed dedication to shedding those extra pounds....I bought a used folding bicycle this weekend that I can keep in my office and use to ride across campus.” Saying “I don‟t” also led to increased longevity; participants reported using it long after the study was completed.
“What‟s great about this research is that it suggests a strategy that is simple, straightforward, and easy to implement. And most works!” the authors conclude.
Vanessa M. Patrick and Henrik Hagtvedt. “„I Don‟t‟ versus „I Can‟t‟: When Empowered Refusal Motivates Goal-Directed Behavior.” Journal of Consumer Research: August 2012. 

Friday, March 9, 2012

How marketers can exploit infectious sharing behavior

In the world of marketing, people who are thinking about sharing product information they find in online advertising are likely to first consider whether the information is relevant to friends and family in their social networks.
The notion of a piece of information, a video clip, amusing photo or informative email going "viral" was initially a purely organic concept where every consumers and users shared such an item to the point where few people would remain unaware of its existence. However, marketing and advertising executives quickly recognized the potential and now, it seems, spend a great deal of time and effort attempting to emulate the exponential awareness of this organic sharing. As such, there is a substantial body of research into what makes a natural digital entity "go viral" and how that process might be exploited by business for commercial gain. The not-for-profit and even government sectors are also keen to find success in this area.
James Coyle of Miami University in Oxford, Ohio, and colleagues point out that the old-school marketing techniques are not quite as sharp as they once were. "The effectiveness of the 'create once, run everywhere' traditional marketing method is blunted by the expansion of media options that now include consumer-controlled media online and on mobile devices," they explain in a forthcoming issue of the International Journal of Electronic Marketing and Retailing.
The researchers suggest that there are ways in which business and others can readily tap into "word-of-mouth" marketing and the so-called web 2.0 world of social networking and sharing. Unfortunately, the team suggests, the reasons why some viral campaigns succeed where others fail remain a mystery. To gain new insights into the nature of online virality, the team conducted surveys of two audience types: high-tech business-to-business users and people seeking consumer health information.
The team was able to assess the degree to which people in each group was willing to share a given marketing item as well as looking at how much those people shared in general on the internet and offline. They also asked questions to gauge the degree of caution individuals revealed in choosing what to share with scant knowledge about its source or the validity of the content. The team also determined how much information filtering the users undertook as well as measuring their personal involvement in the item being shared.
"In our study, in two very different product categories increased product involvement was a significant predictor in increased likelihood of sharing information from an online ad, " the team says. Similarly, they add, involvement was "how much an ad made participants think of others in their social network also contributed to higher intentions for sharing."


Wednesday, March 7, 2012


In most cases, your profile photo on Facebook tells viewers what they need to know to form an impression of you – no words are necessary, new research suggests.
College students who viewed a Facebook photo of a fellow student having fun with friends rated that person as extraverted – even if his profile said he was “not a big people-person.”
“Photos seem to be the primary way we make impressions of people on social networking sites,” said Brandon Van Der Heide, lead author of the study and assistant professor of communication at Ohio State University.

The exception is when a photo is out of the ordinary or shows someone in a negative light.  In that case, people do use profile text to help interpret what kind of person is shown in the profile.
“People will accept a positive photo of you as showing how you really are.  But if the photo is odd or negative in any way, people want to find out more before forming an impression,” he said
Van Der Heide conducted the study with Jonathan D’Angelo and Erin Schumaker, graduate students in communication at Ohio State.  Their results appear in a recent issue of the Journal of Communication.
The researchers conducted two studies.
In one study, 195 college students viewed a mock Facebook profile of a person who was supposedly a fellow student.  The profile included a photo and a written “about me” statement.
Participants were asked to rate how extraverted they thought the student in the profile was, on a scale of 1 (least extraverted) to 7 (most extraverted) based on the photo and text.
The participants viewed one of four profiles: in one, both the photo (a person shown socializing with friends) and the text (“I’m happiest hanging out with a big group of friends”) suggested an extrovert.
A second profile had both a photo (a person alone on a park bench) and text (“I’m happiest curled up in my room with a good book”) that suggested an introvert.
The other two profiles were mixed, with the photo suggesting an extravert and the text an introvert, and vice versa.
The question the researchers wanted to answer was which mattered more – the photo or the text – in deciding whether the person was an extrovert or an introvert.
Results showed the photo was generally most important, Van Der Heide said.

When the extraverted photo was shown, it barely mattered whether the text suggested the person was an introvert or extrovert – most participants rated the person as an extravert.
“It didn’t matter what the profile text said – what mattered was the photograph,” Van Der Heide said.
But if the photograph suggested an introvert, people really did pay attention to the text.  If the text also suggested an introvert, participants rated the person as such.  But if the text suggested the person was an extravert, participants rated them as slightly less introverted.
“They were still seen as introverted, because of their photo showing them alone on the park bench.  But they got a little bump up in their extraversion rating because of their profile text suggesting they were extraverted.”
These results support a theory that people generally pay closer attention to information that could be viewed as negative or not normal, Van Der Heide said.
On social networking sites such as Facebook, users expect people to showcase themselves as happy, successful and sociable.
“If the photograph fits that image, people have little reason to question his or her judgments about this person’s characteristics,” he said.
“But if the photo shows something we didn’t expect – someone who is more introverted, for example – viewers want to read the text and do a little more interpretation.”
These results are interesting, Van Der Heide said, because when people use text or photos alone to build an impression of someone, text may sometimes have a greater influence.  This is especially true when conveying negative information.
In a separate study, 84 college students looked at one of the photos or read one of the text profiles used in the other experiment.  But they had to rely simply on that text or that photo to rate the person’s extraversion.
Results showed that the participants who read the introverted descriptions rated the person as significantly more introverted than did those who saw the introverted photos – suggesting text was most influential.  However, there was no significant difference between how participants rated the person described as extraverted and the person whose photo suggested extraversion.
“There are some cases where text may be more influential than photographs, particularly when they convey negative or unexpected information,” he said.
Van Der Heide said he believes the results apply beyond Facebook to dating websites and other social networking sites.  It should also apply to other traits beyond extraversion and introversion, such as social desirability and even political orientation.  It all depends on what is shown in the photographs, and what clues viewers can glean from them.
The key is that people have certain expectations of the photos they view on social networking websites, he said.
“If your profile photo fits what they expect, observers may be unlikely to look very closely at the rest of your profile – they have already decided how they feel about you.
“But if your photo is not quite normal – either positively or negatively – people are going to pay a lot more attention to what you wrote.”


Two Heads Are Not Always Better Than One

From the corporate boardroom to the kitchen table, important decisions are often made in collaboration. But are two—or three or five—heads better than one? Not always, according to new research from the University of Pennsylvania’s Wharton School. “People who make judgments by working with someone else are more confident in those judgments. As a result they take less input from other people”—and this myopia wipes out any advantage a pair may have over an individual, says psychologist Julia A. Minson, who conducted the study with Jennifer S. Mueller. “The collaborative process itself is the problem.” The findings appear in the journalPsychological Science, published by the Association for Psychological Science.
To test the hypothesis that confidence born of collaboration takes a toll on the quality of judgment, Minson and Mueller asked 252 people to estimate nine quantities related to U.S. geography, demographics, and commerce, either individually or in pairs after discussion. They were then offered the estimates of other individuals and pairs and allowed to revise their own; the final estimates therefore could come from the efforts of two to four people. To sweeten the pot, participants earned a $30 bonus for each of two estimation rounds, but lost $1 for each percentage point their answer deviated from correct. Individuals also rated their confidence in their judgments.
The results: People working with a partner were more confident in their estimates and significantly less willing to take outside advice. The pairs’ guesses were marginally more accurate than those of the individuals at first. But after revision (or lack thereof), that difference was gone. Even the combined judgments of four people yielded no better results than those of two or three. Finally, the researchers found that had the pairs yielded to outside input, their estimates would have been significantly more accurate. Their confidence was costly.
So should we toss out teamwork? No, says Minson, but since collaboration is expensive and time consuming, managers should use it efficiently. For one thing, a group of 10 is not 10 times better. “Mathematically, you get the biggest bang from the buck going from one decision-maker to two. For each additional person, that benefit drops off in a downward sloping curve.” Most important is awareness of the costs of teamwork. “If people become aware that collaboration leads to an increase in overconfidence, you can set up ways to mitigate it. Teams could be urged to consider and process each others’ inputs more thoroughly.”
The same goes for a couple choosing a mortgage or a car, Minson cautions. “Just because you make a decision with someone else and you feel good about it, don’t be so sure that you’ve solved the problem and you don’t need help from anybody else.”

Monday, March 5, 2012

Mobile-OOH encounters


Friday, March 2, 2012

When My Eyes Serve My Stomach

Our senses aren’t just delivering a strict view of what’s going on in the world; they’re affected by what’s going on in our heads. A new study finds that hungry people see food-related words more clearly than people who’ve just eaten. The study, published in Psychological Science, a journal of the Association for Psychological Science, finds that this change in vision happens at the earliest, perceptual stages, before higher parts of the brain have a chance to change the messages coming from the eyes.
Psychologists have known for decades that what’s going on inside our head affects our senses. For example, poorer children think coins are larger than they are, and hungry people think pictures of food are brighter.  Rémi Radel of University of Nice Sophia-Antipolis, France, wanted to investigate how this happens—whether it’s right away, as the brain receives signals from the eyes, or a little later, as the brain’s higher-level thinking processes get involved.
Radel recruited 42 students with a normal body mass index. On the day of his or her test, each student was told to arrive at the lab at noon after three or four hours of not eating. Then they were told there was a delay. Some were told to come back in 10 minutes; others were given an hour to get lunch first. So half the students were hungry when they did the experiment and the other half had just eaten.
For the experiment, the participant looked at a computer screen. One by one, 80 words flashed on the screen for about 1/300th of a second each, at a size that was just at the threshold of what that person could consciously perceive. A quarter of the words were food-related. After each word, the person was asked how bright the word was and asked to choose which of two words they’d seen—a food-related word like gateau(cake) or a neutral word like bateau (boat). Each word appeared too briefly for the participant to really read it.
Hungry people saw the food-related words as brighter and were better at identifying food-related words. Because the word appeared too quickly for them to be reliably seen, this means that the difference is in perception, Radel says—it’s not because of some kind of processing happening in the brain after you’ve already figured out what you’re looking at.
“This is something great to me, that humans can really perceive what they need or what they strive for, to know that our brain can really be at the disposal of our motives and needs,” Radel says. “There is something inside us that selects information in the world to make life easier.”

Thursday, March 1, 2012

Winning Makes People More Aggressive Toward the Defeated

In this world, there are winners and losers – and, for your own safety, it is best to fear the winners.
A new study found that winners – those who outperformed others on a competitive task – acted more aggressively against the people they beat than the losers did against the victors.
“It seems that people have a tendency to stomp down on those they have defeated, to really rub it in,” said Brad Bushman, co-author of the study and professor of communication and psychology at Ohio State University.
“Losers, on the other hand, don’t really act any more aggressively than normal against those who defeated them.”
Bushman said this is the first study to examine whether winners or losers were more likely to act aggressively.
There were reasons to believe either side could have been more in a fighting mood, Bushman said. Losers might be the bigger aggressors, because they would be angry against those who prevented them from feeling competent. However, other research suggests that people are more aggressive when they feel powerful, as they may when they win a competition.
These results, though, suggest “losers are the ones who get the brunt of the aggression,” he said.
Bushman conducted the study with three French scholars: Dominique Muller and Emmanuelle Ceaux of Pierre Mendès-France University in Grenoble and Baptise Subra of University Paris Descartes. Their results appear online in the journal Social Psychological and Personality Science and will appear in a future print edition.
They conducted three related studies.
The first study involved 103 American college students who were told they would be paired with a partner who they would be competing against on two tasks. (In actuality, there was no partner).
In the first task, participants were shown patterns of simple shapes on a computer screen for just a fraction of a second (70 milliseconds) and they had to decide whether a dollar sign was present or absent.
After 80 trials, all students were told their scores. Half of them were told they did better than their supposed partner, and half were told they did worse. In other words, half were winners and half were losers.
The second task was a competitive reaction time task which is used to measure aggression. Participants were told that they and their partner (supposedly the same person they competed against in the first task) would have to press a button as fast as possible on each of the 25 trials and that whoever was slower would receive a blast of noise through headphones.
The winner of the task would decide how loud the blast would be and how long it would last.
Results showed that participants who won in the first competition blasted their partners longer and louder than did those who lost the competition.
“People were more aggressive when they were better off than when they were worse off than others,” Bushman said.
One possible limitation of this study, Bushman said, was that participants might have thought that someone who was good at the first task would also be good at the second task. If that was true, the losers in the first task may have been afraid to act aggressively because they were afraid their partner would again win a lot of trials and punish them with loud blasts.
So in a second study, conducted with 34 French college students, the researchers repeated the same experiment, except that the researchers told participants that the two tasks tested different capacities, and that those who did well on the first task do not necessarily perform well on the second.
The results were the same as those in the first experiment, providing further evidence that winners are more aggressive than losers, Bushman said.
Another question, though, is whether winners really were more aggressive against losers, or whether losers were actually just less aggressive than normal against winners.
A third study, involving 72 French college students, answered that question by adding a control group to the study. As in the previous experiments, one group was told their partner did better than they did on the first competitive task, and one group was told their partner did worse. However, there was also a third group that told there was a computer error during the first task and they couldn’t tell who was the winner.
This study also used a different measure of aggression. In an earlier part of the study, the participants filled out a “Food Preference Form” which was shared with their supposed partner, reportedly as part of a study on how people form impressions of others.
Participants were then told they were randomly assigned to drink a sweet beverage and their partner was assigned to drink a tomato juice beverage. Participants were told they could add Tabasco sauce and salt to their partner’s beverage -- which they knew their partner strongly disliked from the food preference form.
Results showed that participants who were winners in the first task added more Tabasco sauce and salt to their partner’s drink than losers did.
In addition, the losers acted about as aggressively as did those in the control group, who didn’t know if they were winners or losers. That suggests winners do indeed act particularly aggressively, while losers aren’t particularly nonaggressive.
Bushman said the fact that the findings were repeated in three different studies, in two different countries, suggest that there really is something about winning that makes people more aggressive.
“Losers need to watch out,” he said.
The next step, he said, is to find out if winners act more aggressively toward everyone, or just toward people they defeat. That’s the subject of an upcoming study.