Category Archives: Cases

Cases

Will be canned wine successful?

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I drink wine often. It goes well with dinner, helps me read papers, and soothes me at night. In the past, I enjoyed numerous marriages of soil, weather, and grape variety. Now, my tongue is developed although I neither remember one nor am able to elaborate why I like one.

Recently, I went to Urban Break 2021 and saw a pop-up store of Babe Wine, a brand name of a canned wine. It attracted a crowd of visitors. Out of curiosity, I sampled a sip of Grigio, Rose, and Red. They differed from the wine I experienced before. They came out from icy-cold cans and had bubbles. I ended up failing to like this wine.

Despite of my disappointment, this canned wine attracts attention internationally. “From 2016-2020, BABE’s CAGR was nearly 2,000% according to IRI. These numbers quickly caught the eye of beverage giant Anheuser-Busch, who acquired Babe in 2019.” According to the article in Forbes, “Babe specifically focused on targeting the wine lover who cracked open bottles on the regular, but “couldn’t name a single brand,” says Ostrovsky.”” 

Why do people like a canned wine I do not? Indeed, I have a long history of prediction errors. On one hand, I once thought that BTS, Tiktok, and Instagram would fail to make a presence. On the other hand, I expected that Clubhouse, a social audio app, and Gathertown, a meta-verse service, would succeed in Korea. Not surprisingly, my predictions were proven to be incorrect.

Then, how could experts like me (e.g., wine lovers) predict whether a product is successful in the market when it is designed for novices (e.g., canned wine)? About 10 years ago, researchers at University of Oxford and New York University suggested that an accurate prediction of an extreme event is an indication of poor forecasting ability. This suggests that even experts who have forecasting abilities predict only non-radical events. Predicting the next hit is beyond our control.

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Reference

Denrell, J., & Fang, C. (2010). Predicting the Next Big Thing: Success as a Signal of Poor Judgment. Management Science, 56(10), 1653–1667.

Successfully predicting that something will become a big hit seems impressive. Managers and entrepreneurs who have made successful predictions and have invested money on this basis are promoted, become rich, and may end up on the cover of business magazines. In this paper, we show that an accurate prediction about such an extreme event, e.g., a big hit, may in fact be an indication of poor rather than good forecasting ability. We first demonstrate how this conclusion can be derived from a formal model of forecasting. We then illustrate that the basic result is consistent with data from two lab experiments as well as field data on professional forecasts from the Wall Street Journal Survey of Economic Forecasts.

Cases

How to force myself to read a book?

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I find myself reading books challenging. Most books are too long to start and I am too busy to finish reading book. Therefore, I have applied numerous insights obtained from behavioral research to force myself to read books.

So far, the most effective method is to buy a physical book. This is particularly effective when the book is not available at a local book store and it needs to be delivered to me in the mail. My intention to finish reading the book *irrationally* increases because it has a physical form and I do not want to waste, interestingly, its delivery cost.

Atasoy, O., & Morewedge, C. K. (2018). Digital Goods Are Valued Less Than Physical Goods. Journal of Consumer Research, 44(6), 1343–1357.

Digital goods are, in many cases, substantive innovations relative to their physical counterparts. Yet, in five experiments, people ascribed less value to digital than to physical versions of the same good. Research participants paid more for, were willing to pay more for, and were more likely to purchase physical goods than equivalent digital goods, including souvenir photographs, books (fiction and nonfiction), and films. Participants valued physical goods more than digital goods whether their value was elicited in an incentive compatible pay-what-you-want paradigm, with willingness to pay, or purchase intention. Greater capacity for physical than digital goods to garner an association with the self (i.e., psychological ownership), underlies the greater value ascribed to physical goods. Differences in psychological ownership for physical and digital goods mediated the difference in their value. Experimentally manipulating antecedents and consequents of psychological ownership (i.e., expected ownership, identity-relevance, perceived control) bounded this effect, and moderated the mediating role of psychological ownership. The findings show how features of objects influence their capacity to garner psychological ownership before they are acquired, and provide theoretical and practical insights for the marketing, psychology, and economics of digital and physical goods.

The second most effective method is to bookmark with sticky notes after briefly reading the table of contents. I often stick only three notes on the pages I want to read to relieve burden. When I see them, I *mistakenly* think I already started reading the book.

Kivetz, R., Urminsky, O., & Zheng, Y. (2006). The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention. Journal of Marketing Research, 43(1), 39–58.

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.

Certainly, I want to read more books without these tricks. However, I have insufficient self control resources and frequently mispredict my available time. I wish these tricks drive me to start as well as complete reading books.

Cases

Less is better for flower?

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Less is often better. Chris Hsee demonstrated in his experiment that an overfilled ice cream serving with 7 oz of ice cream was valued more than an underfilled serving with 8 oz of ice cream. However, participants indicated greater willingness to pay for an underfilled ice cream than an overfilled one ($1.85 vs. $1.56). This is because, according to him, when participants determined the value of each option alone (i.e., separate evaluation), they focused on an easy-to-evaluate attribute (whether an ice cream is overfilled or underfilled) and failed to consider a hard-to-evaluate attribute (the amount of ice cream). However when indicating their willingness to pay together (i.e., joint evaluation), they considered the hard-to-evaluate attribute important. Note that a hard-to-evaluate attribute is an attribute that “people do not know whether a given value on that attribute is good or bad.”

I had a similar experience at the Nicolai Bergmann, a flower shop located in Seoul, Korea. A preserved, overfilled flower attracted my attention when I entered the store. However, I found another flower next to it and it was in a square box. Although the overfilled flower attracted me first, I chose the boxed one for several reasons. The primary reason was that when comparing these two flowers side-by-side, I considered their hard-to-evaluate attribute (the amount of flower) seriously. I expect many other visitors may reach the same conclusion.

Hsee, C. K. (1998). Less is better: When low‐value options are valued more highly than high‐value options. Journal of Behavioral Decision Making, 11(2), 107-121.

This research demonstrates a less-is-better effect in three contexts: (1) a person giving a $45 scarf as a gift was perceived to be more generous than one giving a $55 coat; (2) an overfilled ice cream serving with 7 oz of ice cream was valued more than an underfilled serving with 8 oz of ice cream; (3) a dinnerware set with 24 intact pieces was judged more favourably than one with 31 intact pieces (including the same 24) plus a few broken ones. This less-is-better effect occurred only when the options were evaluated separately, and reversed itself when the options were juxtaposed. These results are explained in terms of the evaluability hypothesis, which states that separate evaluations of objects are often infuenced by attributes which are easy to evaluate rather than by those which are important.

Cases

Lay rationalsim leads consumers to choose subscription services

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Subscription-based model attracts attention. It helps firms to stabilize profits, obtain insights, and forecast sales, enabling them sustain.

However, marketers have to pay attention to consumer psychology when they develop a subscription service. That is, pain of payment is detached from joy of enjoyment. When consumers consider subscribing a service or not, they emphasize the realized pain of payment rather than their expected joy of enjoyment. In this case, they tend to rely on “lay rationalism” and base their decisions on reason than on feeelings (Hsee et al. 2014, pg. 134). In order to use reason to guide decisions, consumers may calculate the cost effectiveness of a service rigorously (e.g., how much I will enjoy later based on how much I pay now).

Since payment-enjoyment time gap leads consumers to rely on lay rationalism, they may like a subscription service that is is easy to calculate its cost effectiveness. Take an example of the following 2 TB Dropbox service. The cost effectiveness of the two billing cycle options are easy to calculate and easy to compare because their pay period is identical (month). I subscribed this Dropbox service because I found it easy to calculate cost effectiveness.

In contrast, when cost effectiveness is difficult to calculate, a subscription service may not be chosen. Take an example of the following 3 TB Dropbox space. In this case, the cost effectiveness of the two billing cycle options are difficult to calculate and difficult to compare because their pay periods differ (year vs. month). I assume many others hesitate to choose one of the two options.


Hsee, C. K., Yang, Y., Zheng, X., & Wang, H. (2014). Lay Rationalism: Individual Differences in Using Reason Versus Feelings to Guide Decisions. Journal of Marketing Research, 52(1), 134–146.

People have a lay notion of rationality—that is, the notion of using
reason rather than feelings to guide decisions. Yet people differ in the degree to which they actually base their decisions on reason versus feelings. This individual difference variable is potentially general and important but is largely overlooked. The present research (1) introduces the construct of lay rationalism to capture this individual difference variable and distinguishes it from other individual difference variables; (2) develops a short, easy-to-implement scale to measure lay rationalism and demonstrates the validity and reliability of the scale; and (3) shows that lay rationalism, as measured by the scale, can predict a variety of consumer-relevant behaviors, including product preferences, savings decisions, and donation behaviors.

Cases

Why are we attracted by Starbucks toys?

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Starbucks Coffee Korea recently launched a set of limited edition Playmobil toy figures. Customers get one of six tall-size beverages with an accompanying Playmobil figure for $12.

Today at a nearby Starbucks, I found several customers paid extra to have a barista figure. Another Starbucks was crowded even though customers have to leave store shortly due to social distancing regulations. It suggests this campaign increases offline store traffic.

Why do adults like Starbucks toys? Although brand power and scarcity play key roles, a more deeply rooted reason is that Playmobil figures are whimsically cute. “Cute products (e.g., an ice-cream scoop shaped like a miniature person or a dress with tropical colors and pink flamingos) can have whimsical nature, which is associated with capricious humor and playful disposition. Whimsical cuteness is … associated with fun and playfulness.” (Nenkov and Scott 2014, pg. 327).

Interestingly, whimsically cute products do not necessarily appeal when they are designed for kids. Contrary to our belief, whimsical cuteness attracts adults. This argument is supported by the experimental findings obtained from a marketing paper.

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Reference

Nenkov, G., & Scott, M. (2014). “So Cute I Could Eat It Up”: Priming Effects of Cute Products on Indulgent Consumption. Journal of Consumer Research,41(2), 326-341.

This article examines the extent to which consumers engage in more indulgent consumption when they are exposed to whimsically cute products and explores the process by which such products affect indulgence. Prior research on kindchenschema (baby schema) has found that exposure to cute babies or baby animals leads to more careful behavior (see the study by Sherman, Haidt, and Coan), suggesting restraint. The present research uncovers the opposite: consumers become more indulgent in their behavior after exposure to whimsically cute products. Drawing from research on cognitive priming, kindchenschema, anthropomorphization, indulgence, and regulatory focus, this research posits that exposure to whimsically cute products primes mental representations of fun, increasing consumers’ focus on approaching self-rewards and making consumers more likely to choose indulgent options. These effects do not emerge for kindchenschema cute stimuli, since they prime mental representations of vulnerability and caretaking. Four empirical studies provide evidence for the proposed effects and their underlying process.

When two cookies were presented under “The Cookie Shop,” participants indicated significantly weaker preference for the healthy entree when they had earlier viewed the whimsically cute cookie than when they had viewed the neutral cookie. However, no such differences occurred when two cookies were presented under “The Kid’s Cookie Shop.”

Cases

How thick is 2cm-thick steak?

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Thickness matters when cooking steak. A rule of thumb is to cook a 2cm-thick piece of steak for 2 minutes for rare, 4 minutes for medium, and 6 minutes for well-done. However, we struggle with guessing how thick a piece of steak is. Seven years ago, I met a clever solution for this problem at a grocery store where there was a manually carved wood plank. Since it shows how professional providers empathize with novice customers, I have shared it with many planers and designers. Recently, I met a similar but more carefully designed wood plank at a different grocery store in Seoul, Korea. According to the website, Gourmet 494 is

a space for food, entertainment and communication, built on the concept of “grocerant” (grocery + restaurant) for the first time in Korea where groceries (food ingredients) and restaurants (food and beverages) come together in one place

Wood plank tells that thickness is difficult for people to evaluate. A specific value (e.g., 2 cm) is hard to tell another value (e.g., 3 cm) because we are not sensitive about it. About this issue, a group of psychologists introduced a concept of General Evaluability Theory about 10 years ago.

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Reference

Hsee, C. K., & Zhang, J. (2010). General evaluability theory. Perspectives on Psychological Science, 5(4), 343-355.

A central question in psychology and economics is the determination of whether individuals react differently to different values of a cared-about attribute (e.g., different income levels, different gas prices, and different ambient temperatures). Building on and significantly extending our earlier work on preference reversals between joint and separate evaluations, we propose a general evaluability theory (GET) that specifies when people are value sensitive and when people mispredict their own or others’ value sensitivity. The GET can explain and unify many seemingly unrelated findings, ranging from duration neglect to affective forecasting errors and can generate many new research directions on topics ranging from temporal discounting to subjective well-being.

In the section of Nature, the authors wrote the following. According to them, human beings do not seem to have an innate or stable scale to evaluate values on thickness.

Nature refers to whether human beings have an innate and stable physiological or psychological “scale” (reference system) to evaluate values on an attribute. The attribute is inherently evaluable if they do or inherently inevaluable if they do not. Ambient temperature is an example of an inherently evaluable attribute; even without learning or social comparison, we can tell what temperature makes us comfortable and happy and what does not. Other examples include amount of sleep, social isolation, or connectedness. The size of a diamond and the power of a car are examples of inherently inevaluable attributes; without learning or comparison, we would not know how to assess such variables. Of course, some people know how to evaluate diamond size and car power, but such knowledge is learned, not innate. Because people possess innate reference systems for inherently evaluable attributes but not for inherently inevaluable attributes, value sensitivity (without learning or comparison) is higher for inherently evaluable attributes (H1.3). More precisely, people in SE are more sensitive to differences on an inherently evaluable attribute than to differences on an inherently inevaluable attribute, holding their sensitivity to the two types of differences in JE constant; see our discussion of the Mode × Value × Nature interaction later in this article.

It should be noted that classifying a variable as inherently evaluable does not mean that it is immune to the influence of external reference information (such as social comparison); instead, it means that people can evaluate the variable even without such information. Also, inherently evaluable variables are not always associated with basic biological needs—they also include socio-psychological variables, such as loneliness, depression, and sense of achievement. (For details, see Hsee, Yang, Li, & Shen, 2009.)

Cases

Look and feel mismatch: Looking heavy but feeling light

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We sometimes experience sensory disconfirmation, meaning we expect to feel A but actually feel B. For instance, iPhone looks like a product with light plastic but it is made by heavy metal. In particular, disconfirmation between visual and haptic information (or mismatch between look and feel) is critical for business.

Showroom (Curated by Sarah Robayo Sheridan, January 21 – March 5, 2016)

“How do Toronto artists perceive new social and visual orders brought about by a decade of rapid urban development?”

Commonly, a showroom is intended to present a generic ideal of living, devoid of the nuances of lives as they are lived. The artists in this exhibition, however, turn our attention to the influence of lifestyle marketing in constructing the form and texture of the cityscape. By turns, critical, comedic and formal, the works deepen given knowledge of architecture, place, and the social order.

Fitness equipment looks heavy and rough. However, some artists challenge our intuition: dumbbells are light and sandbags are soft in the exhibition. According to research, when negative sensory disconfirmation is introduced, the source of disconfirmation can sometimes be perceived positively. To go further, the more our intuitions are challenged by look-and-feel mismatch, the more we may become creative.

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Reference

Sundar, A., & Noseworthy, T. J. (2016). Too Exciting to Fail, Too Sincere to Succeed: The Effects of Brand Personality on Sensory Disconfirmation. Journal of Consumer Research, 43(1), 44–67.

Across four studies, the authors demonstrate that consumers intuitively link disconfirmation, specifically sensory disconfirmation (when touch disconfirms expectations by sight), to a brand’s personality. Negative disconfirmation is often associated with negative posttrial evaluations. However, the authors find that when negative sensory disconfirmation is introduced by an exciting brand, the source of disconfirmation can sometimes be perceived positively. This occurs because consumers intuitively view disconfirmation as more authentic of an exciting personality. Similarly, despite the wealth of literature linking positive disconfirmation to positive posttrial evaluations, the authors find that sensory confirmation is more preferred for sincere brands because consumers intuitively view confirmation as more authentic of a sincere personality. The authors conclude by demonstrating the intuitive nature of this phenomenon by showing that the lay belief linking brand personality to disconfirmation does not activate in a context where sensory disconfirmation encourages a more deliberative assessment of the product.

Cases

How could we enjoy difficult modern art easier?

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Modern art work is difficult to understand. Someone posted at Quora that modern art paintings are difficult to understand because…

Modern art paintings are the best way to portray the unseen on the canvas. It is about the expression of emotions and feelings on and is not what you see at the very first glance. It can have many interpretations when seen through different angles. If you want to know more about modern art, then you can also read “Why is the New Art So Hard to understand”. It is a book written by Theodor Adorno, a German social theorist who shed more highlight on this concept that why Modern art paintings are so hard to understand modern art. Although the book was written in 1931, it is still relevant in today’s era.

How could we lower its difficulty and help visitors enjoy the modern art better? One solution is to allow visitors not to understand the artists’ intentions correctly. Instead, if visitors are allowed to misunderstand artists’ intentions and even disagree with artists’ opinions, if any, they will be relieved to fail.

A great example is the underlined sentence under the modern artwork named The Great Bear by Simon Patternson in 1992. This sentence was added by a curator working at the Tate Liverpool, UK. Indeed, several students stood in front of this artwork and casually discussed to answer the question.

Simon Patterson born 1967 (Born and work UK) / The Great Bear 1992 (Lithograph on paper)

While this appears to be a standard map of the London Underground, the name of each station has been changed. Patterson has swapped the real station names for those of footballers, actors, and other celebrated figures. The image challenges our expectation that we can trust maps and diagrams. Sometimes Patterson seems to be making jokes with his choices. For example, Gary Lineker, who never received a yellow or red card as a football player, sits at the connection between footballers and saints.

  • What do you think about artists taking and changing existing images?

A similar sentence was found under another artwork (see below). Reading just one more sentence under the artwork made this Tate Modern museum more friendly and more approachable.

  • Why do you think the artist made this work? What is the ‘it’ you are being asked to stop?

Behaivoral scientists argue that people find information important when it is easy to process (called fluent). Since modern art is difficult, people often avoid and even ignore it. When curators make the modern art easier to process, people will enjoy it.

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Reference

Shah, A. K., & Oppenheimer, D. M. (2007). Easy does it: The role of fluency in cue weighting. Judgment and Decision Making, 2(6), 371–379.

We propose that people weight fluent, or easy to process, information more heavily than disfluent information when making judgments. Cue fluency was manipulated independent of objective cue validity in three studies, the findings from which support our hypothesis. In Experiment 1, participants weighted a consumer review more heavily when it was written in a clear font than in a less clear font. In Experiment 2, participants placed more weight on information when it was in focus than when it was blurry. In Experiment 3, participants placed more weight on financial information from brokerage firms with easy to pronounce names than those with hard to pronounce names. These studies demonstrate that fluency affects cue weighting independent of objective cue validity.

Cases

Asians love making choices

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Many Asians live on rice rather than bread. Since it used to sell in heavy bags, they did not have options to choose. However, people nowadays decrease the amount of food to consume and increase the diversity of means to enjoy. A wide variety of small-portion “meal kits” become highly popular. Certainly, rice is not exceptional.

When I visited Tokyo, Japan, I found a store called Akomeya in Shinjuku area. This store is located across Blue Bottle and has more customers than it. When I entered this store out of curiosity, I found it sells small packages of numerous types of rice. In Akomeya, customers could make a choice out of many options, which does not usually happen when buying rice.

Although freedom of choice may not be a pillar of Western culture any more, it may still be attractive for Asians.

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Reference 1

Mochon, D. (2013). Single-Option Aversion. Journal of Consumer Research, 40(3), 555–566.

This article documents single-option aversion, an increase in consumers’ desire to search when faced with a single option. This effect can lead to a product being chosen more often when competing alternatives are included in the choice set, contrary to various rational models of search, as well as to recent research on choice conflict showing that additional options can lead to higher deferral rates. A series of lab studies document this effect, differentiate it from other context effects, and test some of its boundary conditions. The results suggest that single-option aversion is not driven by the information provided by the additional options, that the desire to search is critical for this effect to occur, and that the effects of single- option aversion are not limited to the immediate choice set. These results have both practical and theoretical implications for the understanding of consumer search and choice deferral.

Indeed, in a more recent study with over 7,000 participants from six countries, researchers found that choice deprivation—a feeling of not having enough to choose from—not choice overload is the most common consumer experience in both trivial and highly consequential domains. And choice deprivation isn’t just more common—it’s also more harmful to choice satisfaction than overload.

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Reference 2

Reutskaja, E., Cheek, N. N., Iyengar, S., & Schwartz, B. (2022). Choice Deprivation, Choice Overload, and Satisfaction with Choices Across Six Nations. Journal of International Marketing, 30(3), 18–34.

Whether consumers have too little, too much, or the ideal amount of choice can have profound consequences. The present research explores patterns of choice deprivation (having less choice than desired) and choice overload (having more choice than desired) across six choice domains in six countries that together provide home to about half the human population (Brazil, China, India, Japan, Russia, and the United States; combined N = 7,436). In most domains in most countries, choice deprivation was the norm—only in the United States was choice overload commonly reported. Deprivation was also more strongly related to decreased satisfaction with choices than was overload, suggesting that choice deprivation can be both more common and more consequential than overload. The present research has implications for “inverted U-shape” theories of consumer choice experiences and underlines the need for more diverse samples, including cross-cultural samples, in research on choice deprivation and overload.

Cases

How to attract attention of pedestrians?

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How could we make passing pedestrians stop and look at something? One solution is to apply technology. For instance, tactile pavings or tactile ground surface indicators tell them when to cross roads.

Another solution is to apply design. While I stayed in Curitiba, Brazil, fire extinguishers always attract my attention successfully. This is because they are located inside red-yellow squares painted on the ground.

Interestingly, the same rule applies when fire extinguishers are above the ground. Red-yellow squares are painted on the ground when fire extinguishers are hung on the wall.

Design beats technology in Curitiba. 🙂

Labrecque, L. I., & Milne, G. R. (2012). Exciting red and competent blue: the importance of color in marketing. Journal of the Academy of Marketing Science, 40(5), 711-727.

From beverages to consumer electronics, marketers are using color in innovative ways. Despite this, little academic research has investigated the role that color plays in marketing. This paper examines how color affects consumer perceptions through a series of four studies. The authors provide a framework and empirical evidence that draws on research in aesthetics, color psychology, and associative learning to map hues onto brand personality dimensions (Study 1), as well as examine the roles of saturation and value for amplifying brand personality traits (Study 2). The authors also demonstrate how marketers can strategically use color to alter brand personality and purchase intent (Study 3), and how color influences the likability and familiarity of a brand (Study 4). The results underscore the importance of recognizing the impact of color in forming consumer brand perceptions.