10 Days of Christmas…Consumerism: Day 10

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Image from PsyBlog

In our 10th and final installment, I want to wrap up our discussion by reviewing a topic near and dear to my heart: automaticity. Automaticity in the consumer environment refers to actions that occur without thought, and often refers to the process of priming, which is activating a concept without conscious awareness. Priming is quite common, and advertisers often depend on the automatic effects of priming in their advertising. For instance, product placements in TV shows or movies are meant to be subtle while activating a desire for the product, or creating associations between the product and something you enjoy (i.e. the show or movie). Such methods are extremely effective; Tom Cruise’s Ray-Bans in Risky Business sold 360,000 pairs of the unpopular sunglasses and The Italian Job put Mini Coopers on the map, boosting sales by 22%.

You may wonder how this is nonconscious, since you obviously notice these items are present in the movies. However, priming actually refers to a 3 part process, including awareness of the environmental factors (seeing the Ray-Bans in the movie), the process of activating the concept in the brain (the associations or desires created by seeing the Ray-Bans on Tom Cruise) and the outcome (actually buying the Ray-Bans, or changing your impression of the product).1 For the most part, we are not aware of every part of this process when we have been primed.1 But, as demonstrated by the sales statistics that result from product placement, priming is a highly effective marketing technique.

One way that brands can influence consumers outside of conscious awareness is by priming concepts related to the brand’s personality. For instance, a study by a group of Duke researchers revealed that priming participants with Apple logos made them significantly more creative on a subsequent task than participants who were primed with IBM logos.2 These brand associations are so strong it even works when you prime someone with a logo that is subliminal (it’s presented so fast it can’t be seen even if you are looking at it directly).3 However, in real life, most primes are supraliminal (you can see them, but you don’t realize their impact on your thoughts and behavior).3

Other people can also prime us, as we discussed in the Dasani priming study reviewed in our day 3 post. As in that study, behavioral mimicry can be the outcome of experiencing a prime. Behavioral mimicry occurs when one person behaves in the same way as another person without realizing it. This happens when you notice you are sitting the same way as another person, or you take on an accent when talking with someone from another place. Within the consumer realm, this can happen when you make the same choices as other consumers. One study found that watching another participant eat only goldfish crackers or animal crackers encouraged participants to eat the same snack and ignore the other option when both were provided.4

Automaticity is always at work in the consumer realm, but, for the most part, consumers are unaware of these influences and behaviors. Automatic processes like priming lead consumers to make decisions that are influenced by other consumers and marketing appeals. Many of the topics we have discussed during this series operate automatically, from forming impressions of products to being influenced by the behavior of early adopters. As always, an educated consumer is a savvy consumer!

Happy Holidays, y’all! Thanks for reading and see you in 2015!

Note: You may notice how often I cited Tanya Chartrand in this post. She is one of the foremost authorities on priming and automaticity, as well as a professor at the Fuqua School of Business at Duke. You can find more information on her research at her faculty page.

  1. Chartrand, T. L. (2005). The role of conscious awareness in consumer behavior. Journal of Consumer Psychology, 15(3), 203-210.
  2. Fitzsimons, G. M., Chartrand, T. L., & Fitzsimons, G. J. (2008). Automatic effects of brand exposure on motivated behavior: how apple makes you “think different”. Journal of Consumer Research, 35(1), 21-35.
  3. Bargh, J. A. (2002). Losing consciousness: Automatic influences on consumer judgment, behavior, and motivation. Journal of Consumer Research, 29(2), 280-285.
  4. Tanner, R. J., Ferraro, R., Chartrand, T. L., Bettman, J. R., & Van Baaren, R. (2008). Of chameleons and consumption: The impact of mimicry on choice and preferences. Journal of Consumer Research, 34(6), 754-766.
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10 Days of Christmas…Consumerism: Day 9

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Image from Venture Beat

It may not be surprising, given yesterday’s topic, that brand loyalty is related to brand relationships. Brand loyalty is exactly what it sounds like; it is forming a long-term and largely exclusive relationship with a brand. Companies love brand loyalists because most of a company’s sales tend to come from a small portion of their customers. This is something known as the Pareto principle (or the 80/20 rule), where 80% of revenue is generated by only 20% of customers.1 Because repeat customers are so vital to the success of a business, marketers continually try to build and maintain this kind of loyalty.

You can see how loyalty may be involved in many of the topics we’ve discussed. Brand loyalists are more likely to engage in brand communities, they’re less likely to be influenced by the choices of others in product categories in which they are brand loyal and they tend to generate word of mouth about those brands. Some researchers contend that brand loyalty is part and parcel of brand relationships, and it certainly appears to impact many aspects of a consumer’s marketplace experience.2 In fact, there are many parallels between brand loyalty and the concept of loyalty between two people. For instance, people need to trust brands before they can develop brand loyalty.3 We also come to trust brands by getting to know them over time, often through their brand characteristics and corporate behavior. But other factors like brand performance can also contribute to brand loyalty, which can be positive or negative.4 If a product always performs well, there is little reason for a loyal customer to seek other services, while the opposite is true if it performs inconsistently.4

One of the ways that marketers attempt to harness the power of brand loyalty is through loyalty programs. Loyalty programs are rather infamous for costing companies a lot of money for little return. And this makes some logical sense, as customers that are already purchasing a lot may have no need to purchase more often, or the program itself may not be motivating sales. Research has found that successful loyalty programs generally have 3 main characteristics: 1) They relate to high involvement products, 2) They increase the value of the service, and 3) They maximize motivation for the next purchase.5 Companies whose loyalty programs don’t reflect these values are far less successful than those whose programs are more motivating for the customer.

Brand relationships, and the loyalty that may exist within these relationships, are a part of our lives as consumers. When we become brand loyal, we may be champions for a product, building a company’s customer base by spreading the word to friends and family. We may even feel like amateur guerilla marketers. But we should always be aware that loyalty programs are not rewards for consumers, they’re marketing tactics for companies.

  1. Koch, R. (2011). The 80/20 principle: the secret to achieving more with less. Random House LLC.
  2. Fournier, S., & Yao, J. L. (1997). Reviving brand loyalty: a reconceptualization within the framework of consumer-brand relationships. International Journal of Research in Marketing, 14(5), 451-472.
  3. Lau, G. T., & Lee, S. H. (1999). Consumers’ trust in a brand and the link to brand loyalty. Journal of Market-Focused Management, 4(4), 341-370.
  4. Chaudhuri, A., & Holbrook, M. B. (2001). The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty. Journal of Marketing, 65(2), 81-93.
  5. Dowling, G. R., & Uncles, M. (1997). Do customer loyalty programs really work?. Research Brief, 1.

10 Days of Christmas…Consumerism: Day 8

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Image from BostInno

Now that we know that brands have human characteristics, like personality, let’s talk about how we form relationships with brands. When I was little, my mother always used Aunt Jemima’s pancake mix. Now that I buy my own groceries (bummer), I always buy the same, because I’ve had a long relationship with the Aunt Jemima brand. It also makes delicious pancakes, but I digress. Relationships with brands can be significant for many reasons. The reason I just mentioned is related to nostalgia, or family ties, but you can also imagine relationships with brands being significant because they remind you of certain friends, or they make you feel good. Any way you slice it, maintaining relationships with customers is big business.

Customer relationship management, or CRM, has become key to managing a business. CRM is a way that a company can track an individual customer’s information, preferences and habits in such a way that the company can more effectively market to the individual, as well as retain him or her for future business. But before we form a relationship with a brand, we need to have a good idea of its identity. A company’s identity is composed of consumer perceptions and beliefs about company characteristics, consumer affective responses to the company and impressions of the company’s values.1

While there is a great deal of research on brand relationships, we are going to focus on a case study of compromised brand relationships: American Apparel. This year, Dov Charney, founder and former CEO of American Apparel was fired not once, but twice. For the fashion-obsessed among us, Charney’s bad behavior has long been discussed in relation with American Apparel and their sexualized advertising. In fact, Dov Charney’s sexual misconduct was first reported in 2004, when Charney engaged in some self-satisfaction during an interview with a female reporter. Since then, Charney has been sued by former employees for sexual harassment or misconduct no less than 7 times.

So why fire him now, 10 years after the first reports? Well, a lot of industry insiders think it’s because Charney finally ruined American Apparel’s relationship with its customers. Charney’s behavior was so well-publicized, and led to so much public disdain, that many people transferred these feelings about Charney to feelings about American Apparel. He compromised the brand’s identity by infusing it too much with his own, making it so that shoppers could not help but think about unwanted advances when they were supposed to be shopping for crop tops. And American Apparel’s board was probably right, because American Apparel was hemorrhaging money at the end of 2013, with a total loss of $106 million, a sign of a declining customer base.

Brand relationships are incredibly important, and many of the things we’ve discussed, like brand communities or brand personalities, work to build and support relationships with consumers. Think about the brands you buy, and the way you feel about them. It may surprise you that they’re more than just products, they’re old friends.

  1. Bhattacharya, C. B., & Sen, S. (2003). Consumer-company identification: a framework for understanding consumers’ relationships with companies. Journal of Marketing, 67(2), 76-88.

10 Days of Christmas…Consumerism: Day 7

Brands themselves can take on human characteristics. We often discuss brands and companies with words like, “caring,” “corrupt,” “smart,” or “innovative.” Commercials and advertising work to solidify or disabuse customers of these impressions, using imagery and language to massage customer opinions. And it works! Let’s see how easy it is to choose the correct adjective to describe a company.

Which of these brands is…1) Sophisticated, 2) Competent, 3) Active, 4) Laid-back?*Screen Shot 2014-12-22 at 10.46.43 AM

 

You probably knew right away if you have any experience with these brands or their advertising (or you can find the answers at the bottom of this page). This quiz deals with something called brand personality, which is much like a person’s personality. In personality psychology, human personalities revolve around the so-called Big 5: openness to experience, conscientiousness, extraversion, agreeableness and neuroticism.1 The vast majority of human characteristics can be explained with some version of these 5 traits. But these same 5 factors do not hold for brands.2

Jennifer Aaker identified 5 different characteristics that define brand personality: Sincerity, excitement, competence, sophistication and ruggedness.3 It is fairly easy to think of examples of these types of brands. Hallmark makes money off of their sincerity, and Mountain Dew still exists because of its ruggedness. But much like human personality, there are cross-cultural differences in which traits are most prized in brands. For instance, sincerity is appreciated in the US, Japan and Spain, while ruggedness is appreciated more in the US than in other countries.4

Brand personalities affect us in many ways. They drive our brand impressions, they form our brand evaluations and they contribute to our brand relationships. Marketers can harness this information to sell us goods. So, the next time that Publix commercial makes you cry, just remember that Publix is sincere and competent, and they want you to know it.

* Answers: A-1, B-3, C-4, D-2

  1. Judge, T. A., Higgins, C. A., Thoresen, C. J., & Barrick, M. R. (1999). The big five personality traits, general mental ability, and career success across the life span. Personnel Psychology, 52(3), 621-652.
  2. Caprara, G. V., Barbaranelli, C., & Guido, G. (2001). Brand personality: how to make the metaphor fit?. Journal of Economic Psychology, 22(3), 377-395.
  3. Aaker, J. L. (1997). Dimensions of brand personality. Journal of Marketing Research, 34(3), 347-356.
  4. Aaker, J. L., Benet-Martinez, V., & Garolera, J. (2001). Consumption symbols as carriers of culture: A study of Japanese and Spanish brand personality constructs. Journal of Personality and Social Psychology, 81(3), 492-508.

10 Days of Christmas…Consumerism: Day 6

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Image from Lisa Larter

It’s day 6 in our crash course of consumer psychology, and we’ve gotten into a lot of great work on social influence and contagion. Until now, we’ve ignored some inherently social marketplace phenomena: word of mouth advertising and customer reviews. These days, customer reviews and review sites like Yelp help consumers make purchasing decisions, or select products and services better suited to their needs. Customer reviews are supported by the concept of word of mouth, or hearing about something from someone else.

Word of mouth is powerful for several reasons. We know from social psychology that other people are often swayed by expertise or experience, and people writing product or service reviews have generally used the product or service.1 We are also persuaded more often by those familiar to us than by unfamiliar people, something researchers have dubbed “tie strength.”2 But as we’ve reviewed in past articles, complete strangers’ product choices can influence us also, so word of mouth can come from a large range of sources. And, boy, is it influential!

Research has shown that this product feedback we receive from others has both short and long-term consequences, with word of mouth affecting future decisions, as well as those made in the moment.3 In fact, researchers have found that word of mouth advertising has longer carryover effects and higher response elasticities than traditional marketing efforts.4 Basically, this means that word of mouth is more influential over time, and yields more customers per effort, than traditional marketing. As you can see, word of mouth is very desirable for businesses, and it works better on us as consumers.

Customer reviews of products or services are one expression of this type of word of mouth feedback. While browsing merchandise, you can get educated opinions and specifics about the product, as well as warnings or issues with service. Unsurprisingly, these reviews often play a role in our product decisions. For instance, book sales on Amazon and Barnes and Noble online bookstores are directly related to both the number and type of positive reviews left by other customers.5 In another study, researchers found that participants were about 20% more likely to choose recommended products than non-recommended products.6 But, luckily for companies, brand loyalty moderates the effect of product reviews, such that consumers are less likely to be swayed by reviews when they already like a brand or product.7

It’s been a wonderful journey through social influence within the consumer realm. Tomorrow, we’re turning to conceptualizations of brands as people. So, obviously, you won’t want to miss that 😉

  1. Petty, R. E., Cacioppo, J. T., & Goldman, R. (1981). Personal involvement as a determinant of argument-based persuasion. Journal of Personality and Social Psychology, 41(5), 847.
  2. Bansal, H. S., & Voyer, P. A. (2000). Word-of-mouth processes within a services purchase decision context. Journal of Service Research, 3(2), 166-177.
  3. Bone, P. F. (1995). Word-of-mouth effects on short-term and long-term product judgments. Journal of Business Research, 32(3), 213-223.
  4. Trusov, M., Bucklin, R. E., & Pauwels, K. (2009). Effects of word-of-mouth versus traditional marketing: findings from an internet social networking site. Journal of Marketing, 73(5), 90-102.
  5. Chevalier, J. A., & Mayzlin, D. (2006). The effect of word of mouth on sales: Online book reviews. Journal of Marketing Research, 43(3), 345-354.
  6. Senecal, S., & Nantel, J. (2004). The influence of online product recommendations on consumers’ online choices. Journal of Retailing, 80(2), 159-169.
  7. Ahluwalia, R., Burnkrant, R. E., & Unnava, H. R. (2000). Consumer response to negative publicity: the moderating role of commitment. Journal of Marketing Research, 37(2), 203-214.

10 Days of Christmas…Consumerism: Day 5

It’s the season of love, laughter and seeing everyone you’ve ever met, so let’s talk about social norms. Norms refer to what is “normal,” or what is commonly done or preferred by others. Norms are always at work during our shopping experiences, from the way the sales associate treats you in a friendly way, to the way that you behave while browsing merchandise. And, they’re also at work when we interact with one another in the marketplace, from allowing someone with one item to pass you in line, to helping a child get something off of a high shelf. Basically, there are two kinds of norms: injunctive and descriptive. Injunctive norms refer to what ought to be done, or what is most highly approved by other people.1 These are things like giving to charity or volunteering time. Descriptive norms, however, are essentially descriptions of what others are doing in a given situation.1 These are things like, “75% of people give to the Red Cross following a natural disaster.” Norms are incredibly powerful, and they regulate our behavior in many ways. The consumer domain is no different.

Do you ever wonder why you tip in restaurants even though you don’t want to? It’s because of social norms. Tipping in restaurants nets $26 billion a year in the United States, but it’s not from the goodness of people’s hearts.2 It’s because they don’t want to look cheap in front of their friends, or because everyone else does it.2 This helps to explain why tipping is common in the US, but not in other countries. In the US, it is a social norm, and in other countries it isn’t.*

What other people are doing affects our behavior in the marketplace in other ways, as well. For instance, people are more likely to impulse buy when the practice is seen as normative within their community.3 So, essentially, bad behavior flies if other people are doing it. But marketers can harness the power of these same social norms to reach desired outcomes. In a famous study about hotel water conservation, a group of researchers found that adding a descriptive norm about how often other hotel guests reuse their towels to a statement about water conservation increased participation in the towel reuse program by almost 10%.4

So, to answer the age-old question, would you jump off a bridge if everyone else was doing it? Science suggests you very well might. So, protect yourself this holiday season and march to the beat of your own drummer!

* This is NOT advice to stop tipping. Always tip your waitstaff! As we just discussed, it’s expected in the US and counted as part of a server’s salary.

  1. Cialdini, R. B., Reno, R. R., & Kallgren, C. A. (1990). A focus theory of normative conduct: recycling the concept of norms to reduce littering in public places. Journal of Personality and Social Psychology, 58(6), 1015.
  2. Azar, O. H. (2004). What sustains social norms and how they evolve?: The case of tipping. Journal of Economic Behavior & Organization, 54(1), 49-64.
  3. Rook, D. W., & Fisher, R. J. (1995). Normative influences on impulsive buying behavior. Journal of Consumer Research, 305-313.
  4. Goldstein, N. J., Cialdini, R. B., & Griskevicius, V. (2008). A room with a viewpoint: Using social norms to motivate environmental conservation in hotels. Journal of Consumer Research, 35(3), 472-482.

10 Days of Christmas…Consumerism: Day 4

SEM

Structural equation model from Dholakia, Bagozzi, & Pearo, 2003

In the digital age, when so much holiday shopping occurs online, how are consumers socially influenced? The answer is: surprisingly a lot. The average adult in the US spends 5 of their waking hours online. But what are we doing online? We’re on social media, we’re reading and commenting on news articles and discussing that internet content with others. Consider the last time you were with a friend and you brought up an article you saw online, or a post from Instagram. This is part of the way that content goes viral, this word of mouth advertising from trusted others. Word of mouth moves even faster on the internet, with websites like Yelp and Amazon at our fingertips, reviewing products and services from plumbers to stereos.

Social influence is the highest in virtual contexts when people are engaged in relationships, in real life or within a brand community. This is because we’re most influenced by our ingroup members (people we consider part of our social circle, or group within society, e.g. all people of one race, all people of one social class or all alumni of the same college).1 When we’re engaged in virtual brand communities, we form social bonds with that group, creating an ingroup of people and increasing identification with the brand.2 Brand communities can also invoke peer pressure, like pressure to conform in some undesired group discussion, and establish community norms, created and maintained by the moderators and high profile members of the those communities.2 Check out the graphic for a depiction of the incredibly complex process of creating web content through social influence.

Brands themselves have social influence, especially if they are “identity signaling brands.” An identity signaling brand is something that announces you to the world and says, “This reflects who I am as a person.” Not surprisingly, while people tend to stick with the status quo and purchase the same things as others, in identity signaling domains that include displays of wealth or social class, they want to be seen as unique.3 But we all also vary on our need for uniqueness, with some individuals needing to stand out from others, and some preferring to fit in through their choices as consumers.4 For instance, when shopping for a car, someone with a high need for uniqueness may buy a Smart Car (rare here in America), while someone with a low need for uniqueness may buy a Honda (quite common in America). Someone who sees his or her car as an identity signal may be more likely to want to purchase an expensive and rare car, like a Bugatti, to show others that they are different.

It is the job of marketers to be persuasive, and to increase demand for products within the community. And, meanwhile, it is human nature to be influenced by the words and actions of others, as well as our own desires to fit in or stand out. Beware before you engage in social activities based around brands this holiday season! Harnessing the power of peers and the power of consumer goods is a potent combination.

  1. Cialdini, R. B., & Goldstein, N. J. (2004). Social influence: Compliance and conformity. Annual Review of Psychology, 55, 591-621.
  2. Algesheimer, R., Dholakia, U. M., & Herrmann, A. (2005). The social influence of brand community: evidence from European car clubs. Journal of Marketing, 69(3), 19-34.
  3. Berger, J., & Heath, C. (2007). Where consumers diverge from others: Identity signaling and product domains. Journal of Consumer Research, 34(2), 121-134.
  4. Tian, K. T., Bearden, W. O., & Hunter, G. L. (2001). Consumers’ need for uniqueness: Scale development and validation. Journal of Consumer Research, 28(1), 50-66.