We often pay in cash or by credit card. Differently from cash, credit card often leads us to over-consumption. This is because credit card does not require us to write down the amount paid (rehearsal) and our wealth is not depleted immediately rather than with a delay (immediacy) (Soman 2001).
We could also donate in cash or by credit card. For example, visitors at the Tate Liverpool in UK could donate 4 pounds by inserting bills into a silver box or tapping their credit cards on a white device. Which donation mechanism benefits the museum better?
Past expenses have been shown to influence future spending behavior by depleting available budgets. However, a prerequisite for this relationship is the accurate recall of past payments and the experiencing of the full aversive impact associated with them. This article shows that the use of different payment mechanisms influences both these factors and hence moderates the effects of past payments on future spending. Specifically, past payments strongly reduce purchase intention when the payment mechanism requires the consumer to write down the amount paid (rehearsal) and when the consumer’s wealth is depleted immediately rather than with a delay (immediacy). Two experiments show support for the proposed theoretical framework.
Nowadays people avoid meeting others. We could buy products through mobile phones and order food at screens inside restaurants. A recent virus outbreak even encourages us to stop shaking hands with strangers.
Ironically, the more we avoid meeting others, I believe, the easier others sell their products to us. When I visited Prezzemolo & Vitale, a local grocery store in Notting Hill in London, an employee brought a lump of meat on a board, cut it into thin slices, and passed them over to passers by. Interestingly, most of those who tried samples bought several pieces of different types of meat. I was not exception.
When he looked at me with a slice of meat, I inferred, he made an effort to approach me. This inference is rarely made when I stand in front of machines such as mobile phones or kiosks. I conclude that when we meet people and machines, we may have different inference: people make effort to come close to us whereas machines do not. This inferred effort may play a critical role in determining our next behavior such as buying a product.
This research shows that consumers reward firms for extra effort. More specifically, a series of three laboratory experiments shows that when firms exert extra effort in making or displaying their products, consumers reward them by increasing their willingness to pay, store choice, and overall evaluations, even if the actual quality of the products is not improved. This rewarding process is defined broadly as general reciprocity. Consistent with attribution theory, the rewarding of generally directed effort is mediated by feelings of gratitude. When consumers infer that effort is motivated by persuasion, however, they no longer feel gratitude and do not reward high-effort firms.
Effort not only dictates our behavior. It helps us enjoy what we do.
In four studies in which consumers assembled IKEA boxes, folded origami, and built sets of Legos, we demonstrate and investigate boundary conditions for the IKEA effect-the increase in valuation of self-made products. Participants saw their amateurish creations as similar in value to experts’ creations, and expected others to share their opinions. We show that labor leads to love only when labor results in successful completion of tasks; when participants built and then destroyed their creations, or failed to complete them, the IKEA effect dissipated. Finally, we show that labor increases valuation for both “do-it-yourselfers” and novices.
When I had a lunch at Buenos Aires, Argentina, I ordered four bottles of Coca Cola. Interestingly, bottle sizes differed and the amount of soda in each bottle looked different. I simply thought this was due to the Quality Control failure of the Coca Cola in Argentina.
After coming back from Buenos Aires to Seoul, I met an interesting case about Corona Beer. When this competitive Mexican beer was initially introduced to US in 1980s, American beer companies were concerned about the disruptive competitor. Budweiser soon noticed that, however, the amount of beer differed across bottles. Corona claimed that this reflected the Mexican spirit of leisure. Similar to what Corona did, Coca Cola may want to express its Argentinian spirit of leisure.
One of the most well-known reframing strategies in marketing is PAD (Pennies-a-day) strategy, the temporal reframing of a transaction from an aggregate expense to a series of small daily or ongoing expenses. According to Gourville (1998), it fosters the retrieval and consideration of small ongoing expenses as the standard of comparison, whereas an aggregate framing of that same transaction is shown to foster the retrieval and consideration of large infrequent expenses. This difference in retrieval influences subsequent transaction evaluation and compliance.
To increase transaction compliance, marketers sometimes temporally reframe the cost of a product from an aggregate one-time expense to a series of small ongoing expenses, often in spite of the fact that the physical payments remain aggregated. This temporal reframing is identified in this article as the “pennies-a-day” (PAD) strategy. A two-step consumer decision-making process of (1) comparison retrieval and (2) transaction evaluation is posited to explain the effectiveness of this strategy. In a series of laboratory studies, general support for PAD effectiveness across a range of product categories and specific support for the proposed two-step model was found. The PAD framing of a target transaction is shown to systematically foster the retrieval and consideration of small ongoing expenses as the standard of comparison, whereas an aggregate framing of that same transaction is shown to foster the retrieval and consideration of large infrequent expenses. This difference in retrieval is shown to significantly influence subsequent transaction evaluation and compliance.
Perched atop the city part of the Strahov Monastery compound and the lush surrounding Petrin Hill, the Strahov Brewery is a delightful find in the bustling city of Prague. Just steps from the massive Prague Castle complex, the microbrewery serves about ten variations of St. Norbert beer (3 all year round and 7 seasonally) and the brews are all delicious and fresh with crisp hints of unique flavors.
This brewery has an eye -pleasing beer menu. It introduced five different beers with color, ABV (Alcohol By Volume), IBU (International Bittering Units) scale, description, hops, availability, price, and food pairing. Much like the positioning map beer menu at the Fairmont Chateau Lake Louise, the Strahov Brewery menu eased the burden of my decision-making.
Interestingly, I found that everyone ordered Amber Larger, Dark Larger, or IPA. These three beers were placed on the left side of the menu and each one was supported by its own comment: representing 70% of the production, award winning, or brew master recommended. I noticed that a vertical line in the middle of the menu plays a role of the “visual barrier” and therefore the two beers on the right side did not attract attention. The menu designer used mere categorization effect smartly.
What is the effect of option categorization on choosers’ satisfaction? A combination of field and laboratory experiments reveals that the mere presence of categories, irrespective of their content, positively influences the satisfaction of choosers who are unfamiliar with the choice domain. This “mere categorization effect” is driven by a greater number of categories signaling greater variety among the available options, which allows for a sense of self‐determination from choosing. This effect, however, is attenuated for choosers who are familiar with the choice domain, who do not rely on the presence of categories to perceive the variety available.
Background People often choose between two competing options: option A (aesthetically superior but functionally inferior) and option F (functionally superior but aesthetically inferior). We hypothesize that people like option A more when it is presented with option F (joint evaluation) than when presented alone (separate evaluation) because people find aesthetic attributes are hard to evaluate. We further hypothesize that this effect holds neither for option F nor among experts.
Methods We briefly reviewed two cases in the Korean automobile industry and then conducted two experiments in China. In the first experiment, we compared preferences about two USB drivers between two evaluation modes. In the second experiments, we compared preferences about two basketball shoes in the joint evaluation between novices and experts.
Results We found from the first experiment that participants increased their preferences for option A in the joint evaluation compared to the separate evaluation. Their preferences for option F did not differ between the two evaluation modes. In the second experiment, only novices preferred option A over option F in the joint evaluation. Experts did not prefer option A over option F.
Conclusions Our findings contribute to the scholarly discussions about form and function. They also provide practical implications to designers and marketers who need to sell aesthetically pleasing products. This work goes beyond design marketing interface to add evaluation mode as an intervention to nudge people to choose aesthetically pleasing products, which has been barely discussed in behavioral economics.
Fairmont Chateau Lake Louise is a hotel in Alberta, Canada. Surrounded by mountain peaks and an emerald lake in the Banff National Park, this hotel has a pub for the outdoor enthusiasts coming from all over the world. At the pub, the menu was carefully designed for foreigners by mapping local drinks in two dimensions: how bitter (vs. sweet) and mild (vs. full flavor) beers are and how sweet (vs. sour) and mild (strong) cocktails.
However, as the menu suggests, positioning map could benefit customers as well when provided with unfamiliar products. As persona helps designers communicate with users, map could help novice customers make informed decisions. In other words, positioning map aids consumers’ understanding of their own preferences, like consumption vocabulary.
Consumers’ understanding of their own preferences can be aided by a “consumption vocabulary”-a taxonomy or framework that facilitates identifying the relation between a product’s features and one’s evaluation of the product. In the absence of such a vocabulary, consumers’ understanding of their own preferences will require more extensive experience and may never fully develop. The effect of such a vocabulary is tested in two experiments in which subjects provided with a vocabulary (1) exhibit better-defined and more consistent preferences than control subjects, (2) show improved cue discovery, and (3) show learning (i.e., increases in consistency over time). All results hold regardless of the functional form of the model used to assess subjects’ preference formation.
There is a Ninjago World at the Legoland in Denmark. In front of a flying dragon brick, I met an unfamiliar sign.
At first, I questioned why Lego hates Marvel so that pushing hand out like Iron Man was banned. Very soon, I realized it means “do not touch.” Later, I found the same sign at a construction site in downtown. It says “No entry for unauthorized people (Adgang forbudt for uvedkommende).”
Are these dynamic signs more effective than static ones? According to marketing research, people pay more attention to road signs when they are dynamic. We may need more “Iron Men” signs on the road.
We propose that features of static visuals can lead to perceived movement (via dynamic imagery) and prepare the observer for action. We operationalize our research within the context of warning sign icons and show how subtle differences in iconography can affect human behavioral response. Across five studies incorporating multiple methodologies and technologies (click-data heat maps, driving simulations, surveys, reaction time, and eye tracking), we show that warning sign icons that evoke more (vs. less) perceived movement lead to a quicker propensity to act because they suggest greater risk to oneself or others and increase attentional vigilance. Icons used in our studies include children crossing signs near schools, wet floor signs in store settings, and shopping cart crossings near malls. Our findings highlight the importance of incorporating dynamic elements into icon design to promote imagery and thereby elicit desired and responsible consumer behavior.
I followed map in Prague, Czech Republic. I crossed a bridge (Legions’ Bridge), climbed up a tower (Petrin Tower), and drank beer at a local brewery (Strahov Monastery Brewery). However, I went to one place most tourists are not interested in. I visited a design exhibition held at a convention center (Výstaviště Praha Holešovice).
Professional designers opened their booths and invited visitors in the convention center. I listened to presentations, tested products, talked to designers, and bought a few items.
Afterwards, I became curious about this product and googled “Love Magenta.” I expected to find a person who loves the purplish red color and sell 3D food printers. Surprisingly, Love Magenta is the online store of the Deutsche Telekom. The website of “Love Magenta” says:
Magenta – so much more than just Deutsche Telekom’s corporate color, the most important element of our corporate identity.
But Magenta means even more to us: It represents our attitude towards life. Our employees show their pride in our brand with our everyday products. We showcase our favorite color perfectly in our online shop: sometimes bold, sometimes understated – but always stylish and up to date.
The shop offers a constantly changing range of high-quality products, including fashion, accessories, and gadgets. What these items have in common is the color Magenta, of course – and the love and attention dedicated to each detail. All products are designed and produced exclusively for our shop. This ensures the highest possible quality, and gives our designers complete freedom to create truly unique items. It’s never been easier for our employees and customers to express their love for Magenta in so much style.
Take a look – we’re sure you’ll find something you like.
Color is an effective marketing tool and some colors are stylish. Silver Bang & Olufsen speakers and white Balmuda toasters are eye catching. However, most success cases come from product manufacturers. How can service companies link themselves with stylish colors when they have no tangible, visible products? Deutsche Telekom gave an answer; Really New Products (RNPs) such as 3D food printers help service companies link their colors and styles. In the near future, other Really New Products such as wearable devices, voice recognition devices, or drones will be effective marketing tools for service companies to promote their own colors in stylish ways.
Henckell is my favorite cafe in Frederiksberg, Copenhagen. It is a local place with great coffee and sandwich. I feel cozy inside. It has only four small tables.
There is a tip jar next to the credit card machine on the counter table. Interestingly, it has a smiley face, two arms, and two legs. One day out of curiosity, I kept watching how many guests tipped in this human-looking tip jar. Afterwards, I also asked a server whether guests liked it. Surprisingly, I noticed that a few guests hesitated putting coins into this jar for an unknown reason. The server even told me that not few guests complained about the tip jar because its mouth is too small to insert coins.
When human flavor is added to an object, people like the object. It is supported by academic studies about anthropomorphism. For instance, when a car is anthropomorphized and its characteristics are congruent with the proposed human schema, people evaluate it positively (Aggarwal and McGill 2007). When a garbage bin is anthropomorphized (e.g., “feed me”), people follow the message and show prosocial behaviors (Ahn, Kim, Aggarwal 2013). When an innovative, uncertain product is anthropomorphized (e.g., “this little guy”), people tend to adopt this product (Jiang, Hoegg, and Dahl 2011).
However, anthropomorphism might backfire if the usefulness of the product is sacrificed. When I come back to this cafe, I want to draw a different character with a bigger mouth and see what happens.
People are often reluctant to comply with social causes because doing so may involve personal sacrifices of time, money, and effort for benefits that are shared by other members of society. In an effort to increase compliance, government agencies and public institutions sometimes employ financial tools to promote social causes. However, employing financial tools to induce prosocial behavior is expensive and often ineffective. We propose that anthropomorphizing a social cause is a practical and inexpensive tool for increasing compliance with it. Across three prosocial contexts, we found that individuals exposed to a message from an anthropomorphized social cause, compared with individuals exposed to a message relating to a nonanthropomorphized social cause, were more willing to comply with the message. This effect was mediated by feelings of anticipatory guilt experienced when they considered the likely consequences of not complying with the cause. The theoretical and practical implications of these findings are discussed.
In this study, we adopted a food-waste composting campaign. A total of 104 undergraduates (54% female and 46% male; mean age = 19.8 years) participated in return for course credit. Participants in the anthropomorphism condition were exposed to a campaign poster showing a garbage bin with humanlike features of eyes, a nose, and a mouth alongside the caption, “Please feed me food waste only!” Participants in the nonanthropomorphism condition were shown a campaign poster in which the garbage bin lacked humanlike features and was accompanied by the caption, “Please put food waste in only!”. Participants completed a measure of expected compliance with the campaign (α = .89) using response scales from 1 (very unlikely) to 9 (very likely). In addition, we employed a 4-item measure of anticipatory guilt adapted from Cotte, Coulter, and Moore (2005). The four items assessed the degree of guilt, shame, responsibility, and accountability, respectively, that participants would feel if they did not comply with the campaign and were administered with 9-point scales (α = .89).
As expected, we found increased compliance in the anthropomorphism condition (M = 6.99, SD = 1.62) compared with the nonanthropomorphism condition (M = 6.24, SD = 1.80), β = 0.22, SE = 0.34, p < .05. Moreover, anticipatory guilt was higher in the anthropomorphism condition (M = 5.16, SD = 1.39) compared with the nonanthropomorphism condition (M = 4.49, SD = 1.64), β = 0.22, SE = 0.30, p < .05, which in turn resulted in an increased level of compliance, β = 0.45, SE = 0.10, p < .001. When we controlled for anticipatory guilt, the direct effect of anthropomorphism on compliance was no longer significant, β = 0.12, SE = 0.32, p = .17, Sobel z = 2.04, p < .05, which suggests that anticipatory guilt mediated the effect of anthropomorphism on compliance.
About 36 million people live in Tokyo and its neighboring cities. Most restaurants well known to foreigners are heavily crowded. Therefore, when I dine out in Tokyo, I have to wait for a table for a decent amount of time. The fact that many local people are waiting for their tables relieves my concern that I might have chosen a wrong restaurant. Although crowdedness plays a role as social proof when I “choose” a restaurant, I think I may enjoy dish more if I have a breathing room or enough empty space inside when I “experience” a restaurant.
My thought was supported when I had a lunch at a restaurant run by D&Department in Tokyo. D&Department project is a store-style activist proposed by Nagaoka Kenmei, a Japanese designer, in 2000, with a theme of a “long-life design.” It introduces design products for our daily lives such as eating, drinking, publishing and traveling. It aims to spread all over the country the products excavated in local regions. Therefore, the design products introduced by D&Department are the durable items that should be used for a long time and regional items that each specific region of Japan uniquely identifies. Therefore, serving local, authentic dish at a restaurant made sense to me.
Going beyond design items and local dish, this restaurant provided sufficient empty space to each guest, which was rare in Tokyo. This restaurant limited the number of guests entering the space. Therefore, people focused on their own dish inside while a huge crowd of people waited for their tables outside. This space was quiet and well organized and guests were not visually distracted.
Do we like crowdedness or emptiness at restaurants? Marketing scientists have studied this issue. Some argue that crowdedness plays a role as a social proof while others argue that emptiness signals social class. We may like crowdedness when buying mass products or visiting casual restaurants, whereas we pursue emptiness when searching for luxury goods or dining out at Michelin starred restaurants.
This article is about social space and material objects for sale within that space. We draw primarily on Goffman’s (1971) concepts of use space and possession territories to predict that as the social density of a given space increases, inferences of the subjective social class and income of people in that space fall. Eight studies confirm that this is indeed the case, with the result holding even for stick figures, thus controlling for typical visual indicators of social class such as clothing or jewelry. Furthermore, these social class inferences mediate a relationship between social density and product valuation, with individuals assessing both higher prices and a greater willingness to pay for products presented in less crowded contexts. This effect of inferred class on product valuation is explained by status-motivated individuals’ desire to associate with higher-status people. To the best of our knowledge, this research is the first to reveal the link between social density, status inferences, and object valuations. As such, it makes a novel contribution to what has come to be known in sociology as the topological turn: a renewed focus on social space.
