Power Sales of Free-From Merchandise

A pair of researchers at University of Leeds and Nanyang Technological University points out that growth in the market for free-from products—such as lactose-free milk and fragrance-free face washes—has far outpaced the increase in rates of allergies. It appears that consumers’ choice of free-from products is due to something else.
     The researchers’ studies indicate the something else is a consumer’s perception they have low personal power, and this occurs because low-power consumers feel more threatened than do high-power consumers about the presence of potentially harmful ingredients.
     In one study, participants were asked to choose for use in their coffee between a dairy milk with its lactose and a lactose-free soy milk. Each participant also completed a scale to assess their sense of power. The scale included items like “I can get people to listen to what I say” and “If I want to, I get to make the decision.”
     Results showed that those reporting lower perceived power had a higher preference for the soy milk over the dairy milk. A parallel finding was obtained with another set of participants when purchase frequency of gluten-free foods was measured.
     In a companion study, degree of personal power was influenced rather than just measured. One group of participants were shown a poster that read in part, “You feel like you are a captain, because you are living in a world full of resources.” The second group instead read, “You feel like you are a servant, because you are living in a world full of restrictions.”
     Those reading the second poster were more likely than those in the first to select a fragrance-free face wash over a fragranced one.
     In these studies, people were excluded from participation if they said they had allergies.
     The nature of this preference for free-from products can be used by marketers to charge a premium for the items and to target advertising for free-from merchandise to consumer groups likely to be feeling low personal power.
     In all this, stay aware how advocating free-from can have unintended consequences. The U.S. FASTER Act which went into effect in 2023 requires notification if sesame is included in a packaged food or dietary supplement. In response, some companies added sesame to products that hadn’t included it and labeled it as such. It was risky to guarantee no traces of the seed. This result eliminated options for consumers seeking sesame-free foods.

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Spot Values by Asking Shoppers for Reasons 

Hang ’Em High for Power Deposits 

Highlight How High A Shopper’s Ready to Go 

Note If “Not” Drops Price Sensitivity

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Untangle Responsibility Attributions

In both the U.S. and UK, welfare payments to disabled citizens are a noticeable percentage of the government budget. Voter opinion about these payments counts.
     University of Michigan and Cardiff University researchers concluded that public support for disability benefits in Wales depends on the degree of responsibility placed on the person for their disability—in a way we might expect—and whether the disabled person is an immigrant—in a way we might not expect.
     Study participants considered the case of a man unable to work because of a brain injury. Depending on which of three groups the participant was assigned to, the brain injury was said to be either the result of childbirth complications, a high-speed motorcycle accident, or illicit drug use. For about half the number of participants in each of the three groups, the man was described as, “David is 28 years old and lives in Cardiff.” For the others, the man was described as, “Khalid is 28 years old and emigrated to Wales from Yemen with his family when he was 5.” Participants were asked to indicate how strongly they believed the man deserved some financial assistance from the government and how responsible they thought the man was for his disability.
     Overall, respondents in the drug use condition were most likely to say the man was responsible for his disability, and those in the childbirth complications condition were least likely to say that.
     Did David and Khalid deserve disability benefits? For those presented a David scenario, the childbirth group gave the highest ratings of deservedness, the drug group gave the lowest ratings, and the motorcycle group results were in the middle. But for Khalid, there was one intriguing exception to this same pattern: Respondents in the childbirth group gave lower ratings of deservedness than did those in the motorcycle group.
     After considering the full set of findings, including from a study in Scotland, the researchers attribute this exception to respondents suspecting Khalid’s family of exploiting a more generous UK welfare system by emigrating to Wales after learning of Khalid’s disability. This suspected responsibility for gaming the system was intertwined with perceived responsibility for the brain injury, and the responsibility of Khalid for his actions was intertwined with the responsibility of Khalid’s family for their actions.
     To effectively assess and change public opinion, attend to intertwined attributions which may not be apparent at first glance.

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Pin Responsibility in Unhealthy Food Choice 

Benefit Non-Disabled with Accommodations 

Construe Differences in Disability Duration

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Clear the Clouds from Switching Costs

Cloud video gaming—in which the processing is completed on a vendor’s computer servers—has been growing at a compound annual rate of about 75%, while the traditional video gaming in which processing is completed on the gamer’s local computer has been growing at a rate of less than 6%. The researchers at Durham University, The University of Leicester, and The University of Manchester who cite those statistics used semi-structured interviews and an online survey with gamers to analyze what factors are producing this difference.
     The data indicated a chief reason was how cloud gaming better enabled play of a broad variety of games across a broad range of circumstances. On the other hand, of the numerous factors considered in the study, switching costs exerted much less influence. In this context of video gaming, switching costs referred to the gamer needing to learn how to use the new platforms and accepting that many of the skills that had been mastered to use the old platforms would now be useless.
     Gamers in the study did acknowledge switching costs. One participant told the researchers, “I’ve spent years building up my game library and hardware setup. It would be hard for me to give it up.” Further, perception of higher switching costs was associated with higher reluctance to change from the traditional method. But the researchers say we should expect less influence of switching costs with a hedonic pastime like video gaming than we would with a parallel shift for a utilitarian project, such as storing company data on a vendor’s computer server and having processing completed on the vendor’s computer system. Variety is more important with the hedonic, consistency with the utilitarian.
     The lesson is to attend to the relative influence of switching costs while acknowledging that switching costs do always matter at least somewhat when we’re asking a consumer to make changes. Research findings from Santa Clara University, University of Maryland, and University of Texas-Austin indicate that switching costs exert a stronger influence than does customer satisfaction on whether a consumer will continue to patronize a retailer.
     To make a switch tempting, we’re wise to tell the target population about the ample benefits. People need to see the potential gains in order to put out the energy to form and maintain new habits. However, we too often forget about the importance to the shopper of the costs of the switch.

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Minimize Switching Costs 

Cost Past Customer Satisfaction 

Slant Referral Rewards Toward the Referred 

Tie Attribute Loyalty to Variety Seeking 

Anchor Frequency Estimates to Individuals 

Curtail Quantity Sensitivity by Here-and-Now

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Portray Relative Risk via Pricing Which Fits

Price can portray relative risk. In an Arizona State University and Tulane University study, groups of students were advised to get a flu shot. Some were told the price of the inoculation was $25, while the rest were told it was $125. So that the decision to get the shot wasn’t influenced by whether the student could afford it, all were told the fee would be reimbursed by health insurance. Each participant was then asked to estimate how likely it is they would contract the flu if not receiving the shot.
     The group told the shot cost $25 judged themselves as more likely to get the flu. The researchers’ explanation is that a lower price signifies a need for greater accessibility, and therefore a higher risk of nonuse. People are more likely to get the shot if the price is lower because it is more affordable, but also because the prospect of not getting it is scarier.
     Using a different scenario, an Aalborg University, University of Zurich, and Goethe University study produced a contrasting conclusion: A higher price portrays greater risk.
     These study participants perused an ad for a canyoning or a whitewater rafting adventure at a $100 price. Offered as an option was insurance to reimburse up to $100,000 in medical bills if the person was injured during the adventure. Some participants were told the price of this insurance was $9.90, while the others were told it was $79.90.
     The question in this study was not the likelihood of purchasing the insurance, but instead the likelihood of purchasing the tour whether or not the insurance was purchased. The answer is that people quoted a higher price for the insurance were less likely to indicate interest in purchasing the tour. Companion studies by the researchers gave evidence this was because those people considered the tour to be riskier.
     The effect is stable, but not large when calculated as an average across a group of people. Namely, for each 10% increase in the insurance price, the likelihood of purchasing the tour dropped by between 1% and 2%. A retailer could probably set a price for insurance which yields a substantial profit without the price sabotaging sales of the base item.
     Still, why isn’t that 1% to 2% higher? Perhaps because it’s an average for a group and within any group are adventurers who are attracted by signals of higher risk.

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Imply High Risk with Low-Price Sacred Goods 

Pain a Stimulating Picture 

Present Warranties as Insurance, not Assurance 

Externalize Surcharges in Partitioned Pricing

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