Jaewoo teaches and writes about design thinking, behavioral economics, and field experiment for customer experience. He is professor of marketing and participating professor of experience design at Kookmin University. Jaewoo has been Visiting Scholar at Stanford University since September 2024.
Inglenook winery, owned by filmmaker Francis Ford Coppola, is famous for its fine wines and cinematic heritage. Its castle-like architecture is also impressive. However, beyond these attractions, Inglenook’s wine displays are unique.
Rather than presenting bottles in isolation, Inglenook pairs them with lifestyle products such as artisan candles, gourmet pasta, sketchbooks, and sun hats.
These combinations are not decorative. They suggest how wine is consumed and experienced in real life: during intimate dinners, relaxing moments, creative reflection, or outdoor leisure. The display turns wine into a lifestyle choice.
Likewise, Tsutaya bookstore pairs books with music, stationery, and home goods, helping visitors envision these products as part of their lifestyle.
At both the Napa winery and the Tokyo bookstore, lifestyle-oriented displays enable consumers to see how the products integrate into their daily lives, thereby increasing their perceived value.
Bundling is pervasive in today’s markets. However, the bundling literature contains inconsistencies in the use of terms and ambiguity about basic principles underlying the phenomenon. The literature also lacks an encompassing classification of the various strategies, clear rules to evaluate the legality of each strategy, and a unifying framework to indicate when each is optimal. Based on a review of the marketing, economics, and law literature, this article develops a new synthesis of the field of bundling, which provides three important benefits. First, the article clearly and consistently defines bundling terms and identifies two key dimensions that enable a comprehensive classification of bundling strategies. Second, it formulates clear rules for evaluating the legality of each of these strategies. Third, it proposes a framework of 12 propositions that suggest which bundling strategy is optimal in various contexts. The synthesis provides managers with a framework with which to understand and choose bundling strategies. It also provides researchers with promising avenues for further research.
While filling up my car at a California gas station, I often noticed three red stickers on the pumps. Initially, I thought the pumps were new. However, I soon learned that these red tapes are security stickers designed to prevent card skimming scams.
Card skimming occurs when criminals place fake card readers over the real ones to steal credit card information. If someone tries to tamper with the machine, the seal breaks.
I have been instinctively looking for these red stickers at the gas station. This simple visual cue further changes how I behave. Now I prefer to tap my credit card instead of inserting it.
Researchers once said consumers might hesitate to use contactless payment because of perceived risks. But at California gas stations, tapping feels safer. Real people do not behave the way academic research expects them to.
Purpose: This study develops and tests a conceptual model that combines the modified Unified Theory of Acceptance and Use of Technology (UTAUT2) with a consumer brand engagement model to predict consumers’ usage intentions toward contactless payment systems in a developed country.
Design/methodology/approach – We cooperated with a contactless payment service provider in Finland and reached out to 22,000 customers, resulting in 1,165 usable responses. The collected data were analyzed using structural equation modeling.
Findings – The study shows that the UTAUT2 and the consumer brand engagement model together explain approximately 70% of the variance in usage intention. Of the predictors, habit and consumers’ overall satisfaction have the strongest influence on usage intentions. The model also confirms the positive relationship between intention and use.
Practical implications – Understanding the reasons for both the intention to use and the continued use of contactless payments is important for merchants, banks, and other service providers. This study shows which technology adoption factors drive both the intention and the use of contactless payments. The finding that intention is mainly driven by habit and overall satisfaction and not by hedonic reasons indicates that such behaviors are difficult to change.
Originality/value – This study is among the first to examine contactless payment usage in a developed market, where over half of all point-of-sale transactions are executed using contactless payment cards and/or cell phones.
Before coming to Stanford, I never imagined that going to the gym every day would feel so natural. Yet, working out has become a regular part of my routine. Why?
It is not about willpower. Instead, two seemingly unrelated activities have effortlessly reinforced my gym habit.
First, every time I enter the gym, I pick up The Stanford Dailybefore exercising. Picking up a freshly printed newspaper feels refreshing, even though I rarely read it thoroughly.
Second, after my workout, I head straight to the outdoor swimming pool. The consistently warm water and open-air setting make swimming feel enjoyable. I have become so accustomed to this swimming pool that I do not want to miss a day even when it is raining.
My pattern suggests a strategy for making self-control tasks like exercising more sustainable. I wrap the core, demanding task (exercise) with enjoyable, effortless activities (picking up newspaper before and swimming after), like sugar-coating a bitter pill.
This strategy differs from temptation bundling, where a reward is combined with a main task at the same time, like listening to an audio book while exercising. Instead, I distribute rewards before and after the main task.
This study provides the first evaluation of a newly engineered type of commitment device—a temptation bundling device. It shows that in the setting explored, where exercise was bundled with tempting audio novels, this new type of commitment device is valued by a significant portion of the population studied. Further, we find that when temptation bundling is imposed on a population, it can increase gym attendance by 51% at low cost when it is initially instituted, although as in most exercise interventions This study provides the first evaluation of a newly engineered type of commitment device—a temptation bundling device. It shows that in the setting explored, where exercise was bundled with tempting audio novels, this new type of commitment device is valued by a significant portion of the population studied. Further, we find that when temptation bundling is imposed on a population, it can increase gym attendance by 51% at low cost when it is initially instituted, although as in most exercise interventions.
At the Ala Moana Shopping Center in Hawaii, a vending machine encourages donations. I do not know who designed this Giving Machine, but I am certain it is inspired by scientifically tested ideas in psychology and behavioral economics.
Before elaborating on three specific reasons, the key to its effectiveness lines in the vending machine itself. Unlike traditional charity appeals that vaguely describe where money goes, this machine allows donors see their choices clearly. The message on the machine also states: “100% of your donation goes to the charity cause of your choice.” This transparency reduces uncertainty.
However, visual clarity is just the beginning. Beyond visibility, three behavioral economics insights make this machine highly persuasive.
First, it offers multiple options, leveraging the power of choice. Donations range from $5 (sponsoring a meal) to $100 (after-school care). When presented with multiple options, people tend to focus more on the choice itself, making them more likely to choose at least one. By offering a structured selection, the machine nudges people toward making a donation rather than passing by.
Second, it shifts the decision from who to help to what to choose. Traditional charity appeals often focus on recipients such as disaster victims. This machine instead presents donors with tangible options such as bus passes, diapers, and hygiene kits, to name a few. This shift in framing nudges donors to engage more deeply by selecting specific solutions rather than simply reacting to an emotional appeal.
Third, the machine displays a pile of selected donations at the bottom. This is exactly an application of the goal-gradient hypothesis. People accelerate their efforts as they perceive themselves closer to a goal. Seeing donations accumulate creates an illusion of progress, encouraging more contributions.
A simple vending machine, yet a masterful execution of behavioral economics insights!
Belief in one’s ability to exert control over the environment and to produce desired results is essential for an individual’s well-being. It has repeatedly been argued that perception of control is not only desirable, but is also probably a psychological and biological necessity. In this article, we review the literature supporting this claim and present evidence of a biological basis for the need for control and for choice—that is, the means by which we exercise control over the environment. Converging evidence from animal research, clinical studies, and neuroimaging suggests that the need for control is a biological imperative for survival, and a corticostriatal network is implicated as the neural substrate of this adaptive behavior.
We randomize advertising content motivated by the psychology literature on sympathy generation and framing effects in mailings to about 185,000 prospective new donors in India. We find a significant impact on the number of donors and amounts donated consistent with sympathy biases such as the “identifiable victim,” “in-group,” and “reference dependence.” A monthly reframing of the ask amount increases donors and the amount donated relative to daily reframing. A second field experiment targeted to past donors, finds that the effect of sympathy bias on giving is smaller in percentage terms but statistically and economically highly significant in terms of the magnitude of additional dollars raised. Methodologically, the paper complements the work of behavioral scholars by adopting an empirical researchers’ lens of measuring relative effect sizes and economic relevance of multiple behavioral theoretical constructs in the sympathy bias and charity domain within one field setting. Beyond the benefit of conceptual replications, the effect sizes provide guidance to managers on which behavioral theories are most managerially and economically relevant when developing advertising content.
The goal-gradient hypothesis denotes the classic finding from behaviorism that animals expend more effort as they approach a reward. Building on this hypothesis, the authors generate new propositions for the human psychology of rewards. They test these propositions using field experiments, secondary customer data, paper-and-pencil problems, and Tobit and logit models. The key findings indicate that (1) participants in a real café reward program purchase coffee more frequently the closer they are to earning a free coffee; (2) Internet users who rate songs in return for reward certificates visit the rating Web site more often, rate more songs per visit, and persist longer in the rating effort as they approach the reward goal; (3) the illusion of progress toward the goal induces purchase acceleration (e.g., customers who receive a 12-stamp coffee card with 2 preexisting “bonus” stamps complete the 10 required purchases faster than customers who receive a “regular” 10-stamp card); and (4) a stronger tendency to accelerate toward the goal predicts greater retention and faster reengagement in the program. The conceptualization and empirical findings are captured by a parsimonious goal-distance model, in which effort investment is a function of the proportion of original distance remaining to the goal. In addition, using statistical and experimental controls, the authors rule out alternative explanations for the observed goal gradients. They discuss the theoretical significance of their findings and the managerial implications for incentive systems, promotions, and customer retention.
At Stanford University, parking is segregated based on how much you pay. Drivers can purchase Permit A for $133 per month or Permit C for $38 per month. Each permit dictates where you are allowed to park. Permit A holders must park in Permit A-designated areas, while Permit C holders are restricted to Permit C zones.
This tiered system ensures that those who pay more get closer and more convenient parking, while lower-paying permit holders have to park farther away. For example, in the five-story outdoor Via Ortega Garage, the lower two floors are reserved for Permit A holders, while the upper three floors are designated for Permit C holders.
The same pricing structure applies to indoor, underground parking facilities like Roble Field Garage. Permit C holders should drive farther down to find an available spot than permit A holders.
Permit A parking lots are often partially empty, while Permit C lots are crowded. Those who pay more not only get better locations but also enjoy less competition for spaces. The message is clear: convenience comes at a price.
While searching for an empty space in the Permit C parking lot, a thought crossed my mind: Why not pay $100 more to enjoy convenience?
Then, it struck me that I had become so absorbed in choosing between two permits that I completely ignored a third, unspoken option which I once enjoyed: riding a bicycle. The very act of choosing between two permits kept me from questioning whether I needed to drive at all.
We are born to choose. Once presented with options, we become fixated on making a choice, failing to recognize that the choice itself may be artificially constructed. Differentiated parking fees may subtly reinforce car dependency instead of encouraging biking.
Belief in one’s ability to exert control over the environment and to produce desired results is essential for an individual’s well-being. It has repeatedly been argued that perception of control is not only desirable, but is also probably a psychological and biological necessity. In this article, we review the literature supporting this claim and present evidence of a biological basis for the need for control and for choice—that is, the means by which we exercise control over the environment. Converging evidence from animal research, clinical studies, and neuroimaging suggests that the need for control is a biological imperative for survival, and a corticostriatal network is implicated as the neural substrate of this adaptive behavior.
In the crowded world of running shoes, big names like Nike and Adidas are everywhere. But even with these giants, ON Running is making a mark.
It started in 2010 in Switzerland. One of the three founders, Olivier Bernhard, wanted a new kind of running shoe. He tried something different by attaching pieces of garden hose to shoe soles. This simple idea led to CloudTec, making runners feel like they are running on clouds.
One possible reason why ON Running is successful is its smart naming of this technology. The word “Cloud” signals softness, while “Tec” adds a sense of innovation. Without knowing the details of the technology, consumers can easily grasp that these shoes provide a unique running experience: soft landings followed by explosive take-offs.
This research develops a taxonomy of alphanumeric brand names (ABs) based on the alignment between the brand names and their links to products and attributes. Five empirical studies reveal that ABs have systematic effects on consumers’ product choices, moderated by consumers’ need for cognition, the availability of product attribute information, and the taxonomic category of the AB. In an identical choice set, the choice share of a product option whose brand name takes a higher versus lower numeric portion (e.g., X-200 versus X-100) increases, and it is preferred more even when it is objectively inferior to other choice alternatives. Consumers with low need for cognition use “the higher, the better” heuristic to select options labeled with ABs and choose brands with higher numeric portions. Consumers with high need for cognition process ABs more systematically and make inferences about attribute values based on brand name–attribute correlations. The effects of ABs on consumer preferences are prevalent for most technical products, even when consumers do not know the product category or meanings of attributes.
When I first saw golf carts at Stanford, I was very surprised. It felt like I was not at a university but on a golf course. Seeing these small vehicles moving around campus made me excited. They looked fun, and the atmosphere felt more relaxed.
Other universities might use golf carts for similar purposes. However, because Stanford’s campus is very large, these carts are common, making them feel like a normal part of life here.
New students may feel this effect when they first arrive, but after some time, they get used to it. Even now, when I see these carts, I feel like I am in an exciting place.
When golf carts line up in parking spots, they remind me of a group of cats sitting quietly. Their backside is cute; they look like the back of cats because the small roofs and rounded shapes create a soft, compact appearance.
In this article, the author describes a new theoretical perspective on positive emotions and situates this in perspective within the emerging field of positive psychology. The broaden-and-build theory posits that experience of positive emotions broaden people’s momentary thought–action repertoires, which in turn serves to build their enduring personal resources, ranging from physical and intellectual resources to social and psychological resources. Preliminary empirical evidence supporting the broaden-and-build theory is reviewed, and open empirical questions that remain to be tested are identified. The theory and findings suggest that the capacity to experience positive emotions may be a fundamental human strength central to the study of human flourishing.
However, fast service alone is not enough. Dutch Bros succeeds because of its superior customer experience. Unlike Starbucks, which can feel transactional, Dutch Bros creates a warm and personal experience. Their “broistas” (baristas) often remember customers’ names and favorite drinks, making visit feel like a conversation rather than a purchase. The company’s motto, “We may sell coffee, but we are in the relationship business,” reflects its focus on customer connections.
Dutch Bros understands what Gen Z wants, that is, a fast and friendly experience. Rather than focusing solely on coffee taste, it focuses on the experience of coffee buyers. Customer experience matters.
Understanding customer experience and the customer journey over time is critical for firms. Customers now interact with firms through myriad touch points in multiple channels and media, and customer experiences are more social in nature. These changes require firms to integrate multiple business functions, and even external partners, in creating and delivering positive customer experiences. In this article, the authors aim to develop a stronger understanding of customer experience and the customer journey in this era of increasingly complex customer behavior. To achieve this goal, they examine existing definitions and conceptualizations of customer experience as a construct and provide a historical perspective of the roots of customer experience within marketing. Next, they attempt to bring together what is currently known about customer experience, customer journeys, and customer experience management. Finally, they identify critical areas for future research on this important topic.
Similarly, two hand dryers vary their heights in the Mountain View Public Library.
The Santa Cruz amusement park includes one sink with a footstep among a row of basins.
These height variations comply with accessibility codes to accommodate a broader range of users, including children and individuals with disabilities. They are specified in the California Building Code (CBC), Chapter 11B.
According to Section 11B-605.2 of the CBC, urinals must be either stall-type or wall-hung, with the rim positioned no higher than 17 inches (432 mm) above the finished floor. Additionally, urinals are required to have a minimum depth of 13½ inches (343 mm), measured from the outer face of the urinal rim to the back of the fixture.
In all the cities I have visited including Toronto, Seoul, and Copenhagen, I have never encountered men’s restrooms with urinals at varying heights. It was only after being exposed to this design in California that I became aware of how some individuals might struggle with standard urinals.
Certainly, ideal height for urinals is arguable. However, regardless of the practical effectiveness of the height variations, California’s effort to accommodating different people is psychologically effective. This enforced inclusivity encourages me to be more considerate of others including children or individuals in wheelchairs. Design can reveal aspects of the world we overlook.
Inclusive design considers the needs and capabilities of the whole population to decrease the actual or perceived mismatch between the user and the design object. We review the inclusive design literature across multiple disciplines to conceptualize inclusive design, identify who should be included in the inclusive design process, present an overview of the evolution of design approaches, and summarize best practices on how organizations can facilitate inclusive design. We posit three levels of inclusive design based on the diminishing degree of mismatch between the user and the design object: providing accessibility (Level 1), engaging participation by creating equitable experiences (Level 2), and facilitating empowered success via flow experiences (Level 3). We introduce our Design, Appraisal, Response, Experience (DARE) framework to explain the complex cognitive appraisals and emotional responses that each of these three levels of inclusive design elicits and underscores the notion that inclusive design works best when it’s not intended for a specific need, but rather benefits anyone who uses it. We conclude with a call for future research in this rich and important domain of investigation that seeks both to understand consumer response to inclusive design and to incorporate inclusive design into brand strategy, practice, and policy.
After arriving in California, I was struck by a coffee pod brand completely unfamiliar to me: Keurig. Despite owning a Nespresso coffee machine at the office and a De Longhi espresso machine at home, I was surprised that I had never seen or heard about Keurig before.
In California, Keurig machines are everywhere. The brand holds 41% of the single-serve coffee machine market in the United States and is estimated to have three times the sales of Nespresso nationwide.
However, Nespresso is the leading coffee capsule brand in most other markets. In Korea, it dominates the coffee machine market with a 52% share.
The biggest advantage of Keurig is that many coffee companies produce pods or capsules compatible with its machines. Brands like Starbucks, Peet’s Coffee, and Dunkin offer options for Keurig users. Additionally, Keurig machines and K-Cups are generally more affordable than Nespresso machines and capsules.
Does this mean cultural differences explain their dominance in different markets? Do Californians value variety and quantity, while Koreans appreciate premium experiences?
Cultural differences are unlikely to be reasons. The real explanation is much simpler: people rarely switch from the brand they first encounter. Californians often start with Keurig because it is the most accessible option, while Koreans are introduced to Nespresso through advertising. Once preferences are formed, they tend to stick.
Each brand’s popularity may not be driven by taste or luxury but by who enters the market first. This is why Uber holds an advantage over Lyft in ride-hailing services and why Waymo continues to thrive while Cruise failed in the self-driving car industry.
Examined whether pioneering advantage could arise from the process by which consumers learn about brands and form their preferences (PFs). In 2 experiments with 103 MBA students, hypothetical emerging markets were constructed, varying the order of brand (computer software packages or down quilts) entry across Ss and the types of competitors that subsequently entered the market. Analysis showed that PFs were influenced by the order of brand entry. Moreover, the PF formation process produced a PF structure that made a pioneer’s market share largely invulnerable to competitors, even if switching costs were minimal and brands could reposition.
