Monday, June 24, 2019

Account for Financially Limited Mindsets

When people feel financially poor, their consumer behavior changes. From a thorough review of past studies, researchers at Georgetown University, Texas A&M University, The University of Chicago, and University of Minnesota describe those changes in ways which allow better marketing to the financially limited mindset. The portrayal describes changes in the consumer as they move from reacting to coping to, when necessary, adapting.
  • Sometimes, becoming poor happens suddenly, as with losing a job or moving from a neighborhood where an income was sufficient to one where it most assuredly is not. These consumers find themselves reacting to the changes. If financially taxed after a long period of financial security, people become cognitively taxed as well. Reactions range from indecisiveness to aggression. Their self-esteem suffers. Marketers can earn customer loyalty during this stage by assisting customers to establish controls on spending, patiently guiding shoppers through decisions, and giving the people opportunities to talk about their frustrations. 
  • As financial constraints continue, most people learn to cope. They use available resources more efficiently, such as finding creative uses for products before discarding them. Where they previously took a longer time to make decisions because of uncertainty, they now take longer because they’re spending time savoring experiences, anticipating planned purchases with pleasure, and weighing, for each purchase, what would be gained against what’s lost with foregone alternatives. In independently-oriented cultures like the U.S., the coping stage often includes striving for status, with the result that precious funds are spent on scarce products and small luxury items. 
  • For some people, poverty becomes a lasting way of life. Plus, there are those born into poverty. For these situations, consumer behaviors are a matter of adapting rather than reacting or coping. There is more of a focus on the short-term than on the long-term so a greater attraction to what feels good and what’s easiest to start using. Because those who are chronically poor feel disenfranchised in society, the reactions could include depression. But the researchers find that for others, there are ways in which people adapting to financial limitations demonstrate better consumer behaviors than do others. They evaluate promotional discount offers more carefully. They become innovative and more interested in developing mutually beneficial interactions. If they can’t afford a desired item, they proceed to question its value to them. Marketers interested in fully serving the bottom of the financial pyramid will acknowledge these distinctive characteristics. 
Successfully influence the most prosperous & most loyal consumer age group. For the specific strategies & tactics you need, click here.

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Update Keeping Up with the Joneses
Nurture Healthy Retailing Using Human Nature
Support Consumer Collectives for the Poor
Enrich Customers to Encourage WOM

Monday, June 17, 2019

Correct Gender Bias in Product Attributions

When a craft beer is described on the label as brewed by a woman, it’s rated less highly than when described as brewed by a man. Stanford University researchers say the explanation lies in how consumers assign gender associations to products. The quality rating was a composite score of how likely the rater was to buy the beer, how much they’d be willing to pay for it, and how good they expected the beer to taste. The lower rating for woman-crafted beer was seen among the male and the female respondents.
     Consumers of both sexes think of beer, hand tools, and auto parts, as primarily masculine. They think of cupcakes, dolls, and body moisturizers as primarily feminine. Dinner rolls, soup, and coffee are gender neutral.
     These stereotyping effects are not limited to merchandise. Female concert music will sound better when conducted by a woman, and male concert music sounds better when conducted by a man.
     Male and female concert music? Yes, those listening to recordings of unfamiliar music with decisive rhythms and dynamics judged it as sounding better when told the conductor was male than when told the conductor was female. With music having delicate rather than decisive qualities, the participants in these University of Southern California and Ohio State University studies gave higher ratings if told the conductor was female.
     How to overcome the bias? One approach is to provide quality ratings. In the Stanford studies, the disadvantage for woman-crafted beer faded when the label identified the beer as having won a gold medal at the Great American Beer Festival. In the concert conductor studies, the effect disappeared among study participants who, before listening to the music, were convinced that the conductor—whether female or male—was highly competent. The rating of the powerful music no longer depended on the supposed gender of the provider.
     This indicates that gender stereotypes at the retail level can be sidestepped by you establishing competence as early in the process as possible.
     Based on results from Babson College country-of-origin studies, having the consumer actually sample the product before gender attribution also might work. If a wine-taster was given country-of-origin information before sipping, those tasting an “Italian” wine rated the product as having higher quality than those tasting the wine from “India,” a region not strongly associated with quality wines. If the information was given after the sip, the effect was actually reversed.

Successfully influence the most prosperous & most loyal consumer age group. For the specific strategies & tactics you need, click here.

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Precede Gender Attributions with Competence
Delay Negative Stereotypes to Post-Experience

Monday, June 10, 2019

Roll Out Role-Based Celebrity Endorsements

When a marketer seeks a celebrity endorsement, would it be better to select actor Hugh Jackman or select Wolverine, the character played by Hugh Jackman? Orlando Bloom or Legolas, the role Mr. Bloom portrayed in “Lord of the Rings” films?
     Studies at University of Newcastle and Monash University found that, in these examples, endorsements by the characters produced better attitudes toward the advertisement, attitudes toward the brand, and intentions to purchase the item. The reason is that the associations held by consumers are limited and fully known. A well-documented problem in setting up a celebrity endorsement is that the real-life person can subsequently misbehave, dragging down the value of the endorsed brand.
     In one of the studies, some participants were told, “A little known fact about Orlando, because his agent has been able to prevent the media from reporting this news, is that he has a history of drug abuse and at times during his career has been a regular cocaine user.” This disrupted the positive effects of a brand endorsement by the actor, but had little result on the endorsement by the Legolas character.
     An extramarital affair, a DUI, a lapse in “professional integrity.” Reports of each of these were presented to a sample of Millennials by researchers at University of Leeds, University of Kent, and University of Sheffield. As in similar studies, there was indeed a drop in the celebrity’s endorsement credibility. It didn’t make much difference if the news of the transgression came in the form of the celebrity confessing, a journalist’s report on the matter, or news of unconfirmed rumors.
     Research findings from University of Technology-Sydney, HEC MontrĂ©al, and Avon Canada Inc. document how the damage can spread. A scandal involving a celebrity endorser for a store competing with yours in a similar market can have carryover effects to your store. This argues for communities of merchants encouraging each other to exercise caution when selecting celebrity endorsers. Choosing a well-known fictional character who behaves favorably is a good alternative, and when the character has been played by a famous actor, the impact will be greater.
     For the same reasons, it’s better to have an endorsement from a sports team than from a particular team star. When the endorsement is from a group, you’ve more flexibility to craft the evidence: If one member of the group behaves improperly, you can feature another member of the group.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Eclipse Celebrity Endorsers Who Moon
Consider Using a Business Character Icon

Monday, June 3, 2019

Puff Persuasively to Holistic Shoppers

In a 2006 Iowa Law Review article titled “The Best Puffery Article Ever,” David A. Hoffman defines puffery as a vague statement claiming the competitive appeal of a service or product that, because of the ambiguity and subjectivity of the statement, won’t be declared fraudulent by regulators. Professor Hoffman’s article title is itself an example. Getting in the spirit, I’ll even call it a once-in-a-lifetime example!
     But how effective is puffery in selling the service or product? Most studies have concluded that, since it arouses less cynicism, gentle bragging (“extraordinary service”) works better than extreme exaggeration (“world’s best service”). Also, if presenting shoppers a comparison of three, such as three products you carry, puffery about one will influence the shopper to favor that one, but the same puffery about a trivial attribute possessed by two of the three will drastically undercut the influence of the puffery.
     Researchers at University of California-Berkeley and China’s Jinan University refine such answers by saying it depends on whether the shopper is thinking in a holistic or an analytic way at the time of potential purchase. Holistic thinking evaluates an item as a whole, considering relationships and context. Analytic thinking focuses on the details. A marketer might describe a chocolate candy as “Makes you feel better than any other treat,” in an effort to appeal to holistic, abstract thinking or as “Made with the best cocoa of any chocolate treat” for targeting analytic, concrete thinking. An ad for a diamond pendant might claim, “The gift she’ll remember when she forgets the rest,” or, “The purest color she’ll ever see.”
     Consumers who are thinking holistically are strongly influenced by puffery, yet in a roundabout way. When a competing offering engages in extreme exaggeration, this increases the shopper’s attraction to an offering you want to sell that only gently brags. However, in circumstances where the evidence is that competitors are not currently engaging in extreme exaggeration, feel free to move up the scale of outrageous claims. When consumers think analytically, puffery has much less effect in comparative buying situations.
     Researchers at University of Pennsylvania, Duke University, National University of Singapore, Singapore Management University, and ESADE in Spain find that talk of time causes shoppers to think holistically, since time considerations are difficult to analyze objectively. In contrast, thinking about the financial aspects, such as the price or the credit terms, leads to analytic reasoning in shoppers.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Construe to Fit Comparative Price
Expose Puffery for All It’s Worth
Encourage Category Consistency Time-to-Time