Tag Archives: Consumer Behavior

Cases

Curating taste in Santa Barbara

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When I stayed at the Simpson House Inn in Santa Barbara, the staff told me to visit the Santa Barbara Company for gifts. They said it is the best place. I went there and saw why.

The store does not only sell items one by one. It makes gift boxes with many different things.

One basket had bath salts, white sage soap, a candle, and a seaside mist. These items are chosen for a calming ritual.

Another box had honey, tea bags, postcards, and a candle, showing the taste of Santa Ynez Valley.

A third box had cookies, a honey lollipop, dried flowers, and a small owl-shaped soap. Each box gave a different feeling.

Making these combinations is not simple. It is difficult to choose across categories and still make the gift feel right. But when it works, it matches well with the personal taste of the receiver. One good example is the wine display by the Inglenook winery.

I do not believe AI could easily perform this task. AI can recommend based on past data, but true curation requires subjectivity. To make new and surprising combinations, human taste and imagination are needed. In that sense, curated gift boxes remind me that human taste is still a unique form of intelligence

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Reference

Hwang, S., Park, H., Sohn, M., Yoo, D., Han, C., & Joo, J. (2022). Goal based bundling: A behaviorally informed strategy to combine multiple smart products. In G. Bruyns & H. Wei (Eds.), [ _ ] With Design: Reinventing Design Modes (pp. 2888–2901). Singapore: Springer.

Contemporary electronic manufacturers struggle with how to develop attractive bundles by combining their existing smart products. In the present work, we propose Goal Based Bundling (GBB) by drawing on the academic research of goal systems theory (Kruglanski et al., 2018) and shed light on two previously ignored aspects of bundling strategy: service and glue product. We applied our GBB to a collaborative project with Samsung Electronics, whose goal was to develop new product bundles for kids by combining multiple smart home products. We constructed a framework of Samsung Electronics’ smart products and then visualized it on its sales website. A UI design conveying the value of smart products bundle was developed based on GBB structure. We discuss the process and the result of our project to provide insights into the product managers who combine existing smart products to develop a bundle.

Cases

Triangle wine labels at Au Bon Climat

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I visited Au Bon Climat in Santa Barbara for a wine tasting. They served four wines under the same winery. Each wine had a different story: one was named after the winemaker’s mother, another after his daughter, and another after his son. The tasting experience combined with these stories felt personal.

What surprised me more was the wine label. Most wine bottles use square or rectangle labels, but Au Bon Climat uses a triangle label. This shape made the bottle stand out from many other wines on the shelf. Such a small design detail could change how people notice and remember a brand.

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Reference

Choi, B., & Joo, J. (2021). Authentic Information on the Back Label of Wine Bottle. Asia Marketing Journal, 23(3), 13–26.

This paper investigates whether including authentic information on the back labels of wine bottles enhances consumers’ confidence and purchase intentions about wine; it also assesses the moderating role of involvement and knowledge about wine. We conducted two experimental studies. Study 1 generated three findings. First, when the back label had authentic information, subjects showed higher confidence levels. Second, this effect was hold for subjects with low levels of involvement. Finally, we did not observe this effect for subjects with high levels of involvement. Study 2 extended study 1’s findings and identified the moderated mediation effect of confidence. The findings highlight the important impact on wine choice of authentic information. However, the findings also suggest that authentic information may not be sufficient to attract people with high levels of involvement and knowledge. This study’s findings provide wine producers with practical marketing insights.

Cases

Erewhon in LA: Where health feels like luxury

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I visited one Erewhon store in Los Angeles. Erewhon is known as the most expensive grocery store in the world. All items are organic or health-focused, and many are linked to celebrities or wellness influencers.

The smoothies are expensive and some are named after Hailey Bieber or Travis Scott. Even a small sushi wild tuna roll costs $14.

But what surprised me more was how carefully the vegetables were displayed. Each carrot and leaf was perfectly lined up. It looked almost like a vegetable museum. This kind of display, along with sustainable ingredients and celebrity hype, might help customers feel the price is worth it.

Erewhon’s name comes from a novel where people are punished for being sick. The store also seems to say that my health is my responsibility. With its careful curation and premium feel, Erewhon gives me the feeling that I am doing something good for myself.

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Reference

Haws, K. L., Reczek, R. W., & Sample, K. L. (2017). Healthy diets make empty wallets: The healthy= expensive intuition. Journal of Consumer Research, 43(6), 992-1007.

Understanding consumer decision making about what to eat is both complex, as multiple factors can drive food choice, and important, as food choice impacts overall health. This research examines an intuition at the crossroads of two important criteria for food decision making—healthiness and price—finding that consumers believe that healthier food is more expensive than less healthy food. While this relationship may be accurate in some cases, consumers overgeneralize this belief to contexts and product categories where it is not objectively true. As a result, the healthy = expensive intuition influences consumer decision making by impacting inferences of missing attributes and choice between alternatives. Further, consistent with dual process models, the intuition acts as a bias in shaping how consumers process information about health and price when consumers are processing heuristically, including altering both perceptions of how “healthy” a given ingredient is as a function of product price and the amount of information search consumers engage in when evaluating health claims, such that consumers have a higher standard of evidence when evaluating intuition-inconsistent claims. Overall, the healthy = expensive intuition has a powerful influence on consumer decision making, with significant implications for both consumers and marketers.

Cases

How creative packaging turns an ordinary candle into something extraordinary

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At the Seattle-Tacoma International Airport, I stopped by a souvenir shop featuring local designers. One product package caught my eye: a candle sealed inside a sardine can. It was one of the most unexpected and playful mismatches between form and function I have seen.

Designs like this stand out. But are they effective? Research suggests that consumer responses to such mismatches depend on the type of product. For functional products, incongruent designs can enhance preference. For experiential products, however, congruent designs are better. In other words, mismatch works best when the product is seen as utilitarian.

Yet this sardine-can candle, clearly a hedonic product, seems to challenge the logic. Despite its experiential nature, the mismatch in form adds charm.

The real question is whether the surprise created by the product package fade after the first glance or continues through the purchase experience. This souvenir suggests it endures. I bought two candles partly to appreciate the creativity the designers put into it. The unexpected packaging not only captures attention but also transforms the ordinary into something curiously extraordinary.

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Reference

Noseworthy, T. J., & Trudel, R. (2011). Looks interesting, but what does it do? Evaluation of incongruent product form depends on positioning. Journal of Marketing Research, 48(6), 1008-1019.

Marketers struggle with how best to position innovative products that are incongruent with consumer expectations. Compounding the issue, many incongruent products are the result of innovative changes in product form intended to increase hedonic appeal. Crossing various product categories with various positioning tactics in a single meta-analytic framework, the authors find that positioning plays an important role in how consumers evaluate incongruent form. The results demonstrate that when a product is positioned on functional dimensions, consumers show more preferential evaluations for moderately incongruent form than for congruent form. However, when a product is positioned on experiential dimensions, consumers show more preferential evaluations for congruent form than for moderately incongruent form. Importantly, an increase in perceived hedonic benefits mediates the former, whereas a decrease in perceived utilitarian benefits mediates the latter. The mediation effects are consistent with the view that consumers must first understand a product’s functionality before engaging in hedonic consumption.

Cases

Why multiplexes should learn from independent theaters

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On a sunny Saturday, I watched a classic movie titled To Be or Not to Be at the Stanford Theatre, a historic theater in Palo Alto. This movie experience felt like quiet therapy. I want to keep returning to this theatre for several reasons.

First, the analog ticketing gave me human connection. I received a red paper ticket at the tall glass booth, and another person inside cut it in half and handed it back. This mechanical process made me feel warmly connected.

Second, it was affordable in an expensive area. The ticket was $7, which is cheaper than a typical restaurant tip, and a small popcorn was only $1.50. In a place like Palo Alto where everything feels expensive, this low price made me feel comfortable.

Third, and most important, was the atmosphere. Most of the audience were senior couples, quietly watching the movie. Nobody used smartphones and nobody spoke loudly. I did not interact with them, but I felt comfort simply being near them. This calm environment helped me slow down my thoughts that dynamic AI talks never could. Although we often study seniors, we know little about how we feel when quietly sharing space with seniors. Perhaps, we enjoy being near them, watching them chat softly and walk slowly.

Independent theaters like the Stanford Theatre may represent the future of cinema. Multiplexes continue to be positioned as destinations for young couples, but moviegoers are turning away from them. Instead of focusing on couples looking for extraordinary experience, theaters should become places for individuals seeking quiet and reflection.

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Reference

Bargh, J. A., Chen, M., & Burrows, L. (1996). Automaticity of social behavior: Direct effects of trait construct and stereotype activation on action. Journal of personality and social psychology, 71(2), 230.

Previous research has shown that trait concepts and stereotypes become active automatically in the presence of relevant behavior or stereotyped-group features. Through the use of the same priming procedures as in previous impression formation research, Experiment 1 showed that participants whose concept of rudeness was primed interrupted the experimenter more quickly and frequently than did participants primed with polite-related stimuli. In Experiment 2, participants for whom an elderly stereotype was primed walked more slowly down the hallway when leaving the experiment than did control participants, consistent with the content of that stereotype. In Experiment 3, participants for whom the African American stereotype was primed subliminally reacted with more hostility to a vexatious request of the experimenter. Implications of this automatic behavior priming effect for self-fulfilling prophecies are discussed, as is whether social behavior is necessarily mediated by conscious choice processes.

“…We constructed two versions of the scrambled sentence task: one elderly prime version, which contained words related to the elderly stereotype, and another, neutral version. For the elderly prime version, the critical stimuli were worried, Florida, old, lonely, grey, selfishly, careful, sentimental, wise, stubborn, courteous, bingo, withdraw, forgetful, retired, wrinkle, rigid, traditional, bitter, obedient, conservative, knits, dependent, ancient, helpless, gullible, cautious, and alone… In the neutral version, the elderly prime words were replaced with the words unrelated to the elderly stereotype (e.g., thirsty, clean, private).”

“…Participants in the elderly priming condition (M = 8.28 s) had a slower walking speed compared to participants in the neutral priming condition (M= 7.30 s), t(2S) = 2.86,p< .01, as predicted…”

“…Thus, our results are in harmony with those of Carver et al.
(1983), who advanced a “behavioral schema” model as an explanation for modeling effects. According to the behavioral
schema model, the perceptual and actional representations of
the same type of behavior share many features in common and
thus develop strong connections. As a result, if one has just perceived another person acting in a generous or an aggressive way, for example, one’s behavioral schema for generosity or aggression is activated and accessible, and so one is more likely to behave that way oneself in subsequent situations for which generosity or aggression is a relevant response.“

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How consumers create greenwashing

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I was recently invited by Shelley Takahashi, Professor of Industrial Design at California State University Long Beach, to speak to junior students about sustainability.

During this opportunity, I shared my research on green consumption conducted with Bohee Jung (Jung & Joo, 2021). We borrowed the concept of choice–preference inconsistency from consumer behavior research to test whether consumers over-choose green options even when they do not evaluate them highly.

We found that while 76% chose the green option, only 49% actually rated it more favorably. A similar gap can be seen in real-world cases like the hype around Starbucks plastic reusable cups. Although companies are often accused of greenwashing, consumers themselves contribute by over-choosing green products they do not fully use.

Photo: Nicole Jolliff

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Reference

Jung, B., & Joo, J. (2021). Blind Obedience to Environmental Friendliness: The Goal Will Set Us Free. Sustainability, 13(21), 12322.

In the past, researchers focusing on environmentally friendly consumption have devoted attention to the intention–action gap, suggesting that consumers have positive attitudes toward an environmentally friendly product even though they are not willing to buy it. In the present study, we borrow insights from the behavioral decision making literature on preference reversal to introduce an opposite phenomenon—that is, consumers buying an environmentally friendly product even though they do not evaluate it highly. We further rely on the research on goals to hypothesize that choice–evaluation discrepancies disappear when consumers pursue an environmentally friendly goal. A two (Mode: Choice vs. Evaluation) by three (Goal: Control vs. Quality vs. Environmentally friendly) between-subjects experimental design was used to test the proposed hypotheses. Our findings obtained from 165 undergraduate students in Korea showed that, first, 76% of the participants chose an environmentally friendly cosmetic product whereas only 49% of the participants ranked it higher than a competing product, and, second, when participants read the sentence “You are now buying one of the two compact foundations in order to minimize the waste of buying new foundations,” the discrepancy disappeared (64% vs. 55%). Our experimental findings advance academic discussions of green consumption and the choice–evaluation discrepancy and have practical implications for eco-friendly marketing.

Cases

Displaying lifestyle: Inglenook winery and Tsutaya bookstore

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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.

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Reference

Stokburger-Sauer, N. E., & Teichmann, K. (2016). The effect of context attractiveness on product attractiveness and product quality: The moderating role of product familiarity. Marketing Letters, 27(4), 675–686.

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.

Cases

Red stickers at the gas pump changed how we pay

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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. Interestingly, I actually feel relieved when they are not there because it means the machine has not been tampered with.

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.

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Reference

Karjaluoto, H., Shaikh, A. A., Leppäniemi, M., & Luomala, R. (2020). Examining consumers’ usage intention of contactless payment systems. International Journal of Bank Marketing, 38(2), 332-351.

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.

Cases

How urinal heights in California made me kinder

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Men’s restrooms in California are interesting. Among multiple urinals, one is almost always placed significantly lower than the others.

At Stanford University’s Y2E2 building, the engineering department’s restroom features a lowered urinal.

D.School, home to Stanford’s designers and creativity thinkers, also incorporates this principle.

In the Mountain View Public Library, the pattern continues.

Even at the Santa Cruz amusement park, this feature can be observed.

Interestingly, California’s attention to height differences goes beyond urinals.

At the Stanford Redwood City’s gym, drinking fountains are installed at two different heights.

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.

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Reference

Patrick, V. M., & Hollenbeck, C. R. (2021). Designing for all: Consumer response to inclusive design. Journal of consumer psychology, 31(2), 360-381.

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.

Cases

Why Americans stick to Keurig while the world prefers Nespresso

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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.

However, Nespresso has gaining market share in the United States. Since introducing the VertuoLine system, which brews full-size coffees in addition to espresso, Nespresso increased its US market share to 14.4% in 2023 up from 11% in 2022. During the same period, Keurig’s share declined from 56.2% to 53.1%. The competition between the two brands is intense and dynamic.

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.

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Reference

Carpenter, G. S., & Nakamoto, K. (1989). Consumer Preference Formation and Pioneering Advantage. Journal of Marketing Research, 26(3), 285-298.

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.