Eenie, Meenie, Miney, Mo is no More?

For years marketers have been concerned with how we make our purchasing decisions in the supermarket. What is it that makes us choose the products we buy and leave all the rest behind? It is a complicated subconscious formula we calculate for each and every purchase or is it as simple as throwing a dart on the board?

Researchers at the Massachusetts Institute of Technology are suggesting that, “your brain is most likely deploying an ‘index strategy,’ a straightforward ranking of products, when you shop. It may not be an absolutely perfect calculation, given all the available information, but the study suggests that an index strategy comes very close to being optimal, and is a far easier way for consumers to make their choices”

John Hauser, a professor of marketing at MIT, states that, “”The advantage of making a slightly better decision wouldn’t be worth it” Hauser feels that our rankings of products are sufficient to our needs. It is a simple process in our minds that tends to pick the right product for us. Although we could take more time to enhance our decision, the process isn’t worth it. 

Previous models beforehand thought of our brains working like a computer in the fact that it was always running. Companies are concerned that we will change products and develop brand loyalty to others.  

The researches at MIT feel that consumers continually gather information and use it to their advantage in a very simple way. Juanjuan Zhang, an associate professor at MIT, states, “When we look at our options, we normally evaluate them one by one. We would argue that that is the way we think, and that is different from how other models in marketing work.” According to Zhang, the models are not correctly assuming how we think as consumers. 

Hauser and Zhang tested their index theory and, “conducted an empirical study of consumers who purchase diapers, using a commercial data set of 262 households and almost 3,400 purchases, which turned up several relevant patterns, such as the fact that consumers are more likely to change diaper brands within their first 13 purchases.” The researchers can draw from this that consumers are always evaluating their purchasing and weighing the option of switching products. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/03/150326152323.htm

I Spy With My Little Eye

A new study conducted by The Ohio State University has revealed that, “people who were shown product images in color were more likely to focus on small product details — even superfluous ones — instead of practical concerns such as cost and functionality.” As consumers we are more concerned with small details over what the product can do for us.

Xiaoyan Deng, author of the study, reported, “Color images help us see details. But black-and-white images let us see the ‘big picture’ without getting bogged down by those details.” Deng feels that many marketers will prefer to use color advertising over black and white but that is not correct. Color and the absence of color should be used based on the product being sold. If you don’t want the consumers to be focusing on little details, then black and white would be the best way to create the ad. 

In the study, 94 college students were told to imagine themselves going camping and they would have a radio that only received one channel. The campsite manager offered them a choice of two radios for rent, “a basic analog radio for $10 a day, or a fancy digital radio with many station preset buttons for $18 a day. Not only was the digital radio more expensive, but its preset buttons would be useless at the campsite.”

The article states that, “Students who saw pictures of the radios in black and white tended to make the practical choice — the analog radio. Only 25 percent chose the digital radio. But among students who saw the radios in color, twice as many chose the digital radio. In that scenario, 50 percent of students were willing to pay a higher price for a radio with features that they could not use.”

Deng’s study showed that the students’ ability to focus was impeded by the color photos of the radios. 

Color also played a part in another survey that had online survey takers place photos into groups. 287 participants were told to group sets of photos together. The photos were of shoes, some were all red and others were red with white polka dots. 

“When people viewed the shoes in black and white, they sorted the high heels into one group and the rain boots into another 97 percent of the time. But when they saw the shoes in color, that number dropped to 89 percent, with 11 percent sorting the solid-color high heels and boots into one group and the polka-dot heels and boots into another.” So the color had a strong effect on how the people grouped the products. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/03/150310160035.htm

I’ve Got Some Bad News, and Some Bad News

Today’s media is being criticized for the way it reports the news to us. Consumers state that they want more uplifting news and less negative press. However, a new research shows that it is actually the buying habits of consumers that are creating this negative media reporting.

The article reads, “…while previous studies have focused on the supply side by examining media output, the current analysis is among the first to investigate a negative news bias from the consumer or demand side.”

Researcher Jill McCluskey and some of her colleagues found out that consumers can take in more information from a negative review compared to a positive one based on a theoretical model they created. The team looked at newspapers and the effects of good and bad news. Consumers were found to have received more benefit from reading bad news over good news. McCluskey believes that we have a societal preference to reading bad over good news. 

The media understands this and tailors the news to give us the most benefit it can. “Newspapers act on this demand by reporting more bad news to attract readers and sell more papers,”, reported McCluskey.

The theoretical model was built on the law of diminishing returns. They felt the same idea applied to the media. The study’s findings showed, “A strong human tendency to avoid risk”. Consumers read good news and get a few pieces on information about the benefits a product can give us. The example given in the article is investing in a Fortune 500 company after we hear they are having good news. 

On the other side, as a consumer reading bad news, we use it to avoid risk. We won’t purchase a product or buy a stock. Food scares were the best example of this idea. With E.coli and mad cow disease, people reacted strongly to the media. 

 One of the negative effects of reading bad news is that people tend to become more depressed. It also causes fear mongering. While we are craving bad news, it can still have strong negative effects on us as consumers. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/03/150318074523.htm

E-Cigarettes and Craving

Tobacco commercials have not been on the air for over forty years since the federal ban. In today’s society, we are subjected to watch the new E-Cigarette ads that are popping out of nowhere. These kinds of ads are showing to have an effect on smokers who smoke regularly, intermittently, and those who formerly smoked. 

The University of Pennsylvania has released a study showing the effects of these ads on smokers. Over 800 smokers were analyzed in this study to determine smoking urges, intentions, and behaviors. The article states, “…people who smoke tobacco cigarettes daily and who watched e-cigarette advertisements with someone inhaling or holding an e-cigarette (aka vaping) showed a greater urge to smoke than regular smokers who did not see the vaping. Former smokers who watched e-cigarette advertisements with vaping had less confidence that they could refrain from smoking tobacco cigarettes than former smokers seeing e-cigarette ads without vaping.”

These results are troubling. Smokers are now viewing vaping ads that are increasing their urges to smoke. E-Cigarette companies are spending more than 1 billion dollars on advertising and that number is expected to grow at a 50 percent rate over the next four years. 

Smokers who see things that remind them of smoking such as ash trays, lighters, and matches are more likely to smoke. So these E-Cig ads are having the same effect on them. 

After having over 800 smokers view vaping advertisements, the researchers began to see, “…a trend that more daily smokers who viewed ads with vaping smoked a tobacco cigarette during the experiment than daily smokers who viewed ads without vaping and daily smokers who did not view ads. Over 35 percent of the daily smokers in the condition that showed vaping reported having a tobacco cigarette during the study versus 22 percent of daily smokers who saw ads without vaping, and about 23 percent of daily smokers who did not see any advertising.”

The researchers feel that the more the advertisements show smoking cues, the better they will sell their product. They believe that these ads should be  regulated more carefully. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/03/150312173804.htm

The Kids Don’t Need Caffeine

The Norris Cotton Cancer Center conducted a study to quantify airtime to see when energy drinks are being marketed to children and adolescents. They found that marketers use the majority of their ads to market to these children and adolescents even though the medical community has research saying that these types of consumers should not be using energy drinks. 

Jennifer Emond, the author of the study, has this to say, “These findings are relevant to anyone concerned about child health. Results are also useful to inform the current regulatory debates regarding a ban on the marketing of energy drinks to adolescents. Our study was the first to quantify airtime devoted to energy drink ads on national network and cable television, and results suggest that energy drink manufacturers could alter their placement of ads on TV to avoid reaching a teen audience.”

The American Academy of Pediatrics feels strongly that children and adolescents should not be consuming these kinds of beverages because it may cause serious health issues. It is also linked to binge drinking. Mixing energy drinks with alcohol is common today. Drinks like Red bull and vodka or Jager Bombs are popular because of the energy drinks taste. Those who use energy drinks with alcohol are 4 times as likely to binge drink as those who do not mix energy drinks with alcohol. 

The study analyzed a one year time period for 10 channels and found that a bulk of time was used to market energy drinks. 6 out of the 10 channels with the most airtime of energy drinks included children aged 12-17 in the core audience. Emond feels that energy drinks are being marketed to an age group who should not be marketed to. Emond felt that parents should be aware of this issue and carefully monitor that their children are not viewing ads that market these kinds of drinks to their children. Emond is now focusing on how energy drinks are being marketed outside of television advertisements. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/03/150330162414.htm

Keep That Emotion Flowing

We have all faced it one time or another. Our favorite T.V. drama show ends on a sad dark note and we are left there for only a few brief seconds to come to terms with what we have just witnessed. In the midst of our drama induced sadness a new commercial appears on the screen. Not just any commercial, a super energetic ONCE IN A LIFETIME OPPORTUNITY that we just can’t afford to miss. Here we are feeling tragedy for the loss of a beloved tv character and the real world rushes into our living rooms as if it was fired out of a 12 gauge pump shotgun. 

The Columbia Business School recently published a research article stating that marketers buying ads may want to exchange their high energy ads for ones with more moderate tones. The article states, “When you feel low or sad, ads that are high energy are difficult to watch,” a researcher says. “So you spend less time watching, and the ad is less effective.”  

Keith Wilcox, a professor at the Columbia School of Business, called this idea the deactivating emotion. He believes that marketers should change the tone of their ads to better suit what the consumer has been watching. This study is one of the first to look at activation levels of energy. Just because the ad made someone emotional in a positive or negative way does not mean the ad was effective or not. Wilcox believes that anger is a negative emotion but triggers more energy out of the viewer. 

6 studies were used to analyze people’s activation levels. For example, in one of the studies, people watched one of two clips. In one, there is a boy crying over the loss of a loved one and the other is a documentary of Albert Einstein. The viewers were then subjected to watch either a high energy commercial or a moderate energy commercial.  The results found that those watching the dramatic clip of the crying boy spent less time focusing on the ad as those who watched the neutral documentary video. The neutral video viewers viewed both the high energy and the moderate energy commercials and were able to focus on both better than the dramatic clip viewers. 

The researchers feel that the deactivating emotion plays a strong part in the viewer’s ability to watch commercials after or during their shows. The article mentions Hulu and how 80 percent of its ads are high energy. Hulu should focus on placing more moderate energy ones to better market to its viewers. 

Here’s a link to the article

http://www.sciencedaily.com/releases/2015/04/150406144558.htm

Location Matters, Even Online

In a recent study conducted by New York University, consumers purchasing goods online were less likely to purchase items from disadvantaged neighborhoods and those posting from poorer areas receive fewer responses to their advertising attempts online.

Max Besbris, the study author had this to say, “Where an individual resides thus plays a critical role in their success as participants in economic exchanges — which, of course, affects their ability to make a living.”

Besbris believes this is the case because the buyers of a product see that since the seller is in a poorer area that the product will be less dependable or lesser quality. The buyer is attaching the stigma they feel from the seller onto the product that they are selling. The buyer may feel a lack of trustworthiness and lots of other characteristics that in their mind devalue to the good or service.

In this study, the researchers were trying to sell iPhone 5’s from 12 cities which were chosen based on whether they were economically advantaged or disadvantaged. The researchers placed the ads online in a national classified market where the seller would post their location and where they would like to complete the transaction.  The researchers put two ads online per week in each city over a short period of 3-4 days. The sellers were made up individuals created by the researchers that portrayed the location they were selling from. 

The study found that disadvantaged areas received 16 percent less responses than did advantaged areas. Also, 21 percent fewer responses were accounted for when the seller was black in a disadvantaged area. There was no discrepancy for Latinos living in disadvantaged areas though. 

Besbris went on to say that, “In this study, even the perceptions, true or false, that potential buyers had of a neighborhood influenced their likelihood to respond to an ad, and thus limited the economic opportunities of the seller,”

So if you are trying to sell any goods online in the near future, list them in a more advantaged area and you should receive more responses. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/04/150406152820.htm

The Right Words Reach the Right Price

For as much as we talk every day in our lives, you would think we would learn to pay more attention to what we are saying. You would think that we would only use the perfect words in any occasion in order to communicate more clearly or negotiate a better deal. A study conducted by Leuphana University illustrated that proper wording can turn into money in your pocket. The article states that, “even slight linguistic nuances may significantly affect the outcome of negotiations — an effect which can also benefit non-professional negotiators.”

The example given in the articles scenario about word choice revolves around the purchasing of a car. As the seller, you could say something like, “I would like to give it to you for 900 dollars.” But you would be better off saying, “I will give you my car for 900 dollars.” This second option focuses more on what the other party in the deal will be receiving. It sounds like you have less wiggle room on the deal and it sounds like a better deal to the buyer. The university found that when the loss is emphasized in the deal, like the loss of money in this deal, the loser is less likely to make any concessions to the seller. 

This study involved 650 subjects and the results were very constant in their findings that stronger wordings received better deals.  The article went on to say that creating the right sentence structure does not just help in deals with money on the table. It can work with all kinds of negotiating. 

When it comes to car sales, the seller should not mention the price too early. It reminds the consumer of what they are going to have to pay which they see as a loss. The article recommends not lowering the price early on in the deal, but instead, throwing in some small concessions like floor mats, car washes, tires, or other small deals. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/04/150401084329.htm

Are Targeted Ads Working?

Ithaca College released a study suggesting that online advertisements that are tailored to users based on their browsing styles and other more personal information have not been an effective tactic. Online users who have encountered these kinds of ads see them as creepy. The online marketers strongly believed that this was not be true and that consumers would love the idea of having ads tailored to their wants and needs. Based on older research, marketers believed that creating ads specific for consumers proved more effective. Consumers feel that the ads have stepped over the line and taken too much information from them and used it against them. 

Creepiness is defined in the article as, “the feeling consumers get when they sense an ad is too personal because it uses data the consumer did not agree to give — such as online searches and browsing — and when they’re unclear how and where that information will be used.”

This study was conducted on college students with the use of two separate tests. Selling a USB flash drive and Acne Cream and then looking at Facebook Newsfeed. Some users saw ads they had seen previously and others saw an ad for another product all together. The participants were asked to rank their perceptions of the creepiness factor of the ads based on how tailored to them they were.

The research concluded that there is a direct benefit on the consumer to buy a product after it has been advertised to them specifically but there is also a negative indirect effect based on the creepiness factor from being targeted by the sites.  

While targeting ads have been around for a long time, we are at a point in time where the ads can become oddly specific. It was found out that even the millennials disapproved of these ads seeing as how they are considered digital natives. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/04/150408171201.htm

Online Fundraising and Male Generosity

A real world analysis done by the Cell Press Journal Current Biology showed that, “…men treat online giving as a competitive enterprise. Men will donate four times more money to an attractive female fundraiser in response to the contribution of another male.” Cell Press states that females do not react the same way as males and will not increase their donation size based on the amount other females have donated. 

This may be due to some subconscious tendencies that is evolutionary beneficial to us. Nichola Raihani says, “People are really generous and are right, a lot of the time, to say that their motives for giving to charity are altruistic, not self-serving. This does not however, preclude these motives from having evolved to benefit the donor in some way.”

Previous studies have shown that anchoring works on these kinds of sites. People tend to donate certain amounts based on what other people have been giving. If there is a large donation listed, more people will be likely to donate larger amounts. 

This study proves donations differ based on gender. Raihani finds it unlikely that males are donating more to seem more attractive than other males.  Now, online fundraising campaigns can be ran more effectively as long as an attractive female is running the campaign. 

Here is a link to the article

http://www.sciencedaily.com/releases/2015/04/150416132159.htm