tag:blogger.com,1999:blog-53800479092712866032024-02-19T03:37:24.509-08:00patterns and profitsthoughts on consumer behavior and the challenges in conducting market research to better understand itspandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.comBlogger29125tag:blogger.com,1999:blog-5380047909271286603.post-85824371852410954532009-12-05T14:30:00.000-08:002009-12-05T17:20:10.393-08:00Relationship between NCAA Division I Football Support and Politics<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjmeMecMJKW0ap5EXSu73gVfEj3mBF8JqiR5wxtXmCqiamMDknZBTE4GKmPUK0ptGefKaEW8QcXhNYWPRfLyQfLKg7XogsKc6SXivGvvnL6lGc6lDQVy90I1RWy1KutxplCRb8LOlJudeW/s1600-h/footballstate.jpg"><img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 267px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5411926308134665458" border="0" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjmeMecMJKW0ap5EXSu73gVfEj3mBF8JqiR5wxtXmCqiamMDknZBTE4GKmPUK0ptGefKaEW8QcXhNYWPRfLyQfLKg7XogsKc6SXivGvvnL6lGc6lDQVy90I1RWy1KutxplCRb8LOlJudeW/s400/footballstate.jpg" /></a><br /><br /><br />The table above shows the relationship between a state's NCAA division I football attendance and which presidential candidate it supported in the 2008 election. Red states are those that supported the Republican candidate, blue states supported the Democratic candidate. Lighter blue states were "swing states" -- states that where the vote was close, but went for the Democratic candidate.<br /><br />The attendance figure was calculated by dividing the total Division I football attendance for 2008 by the state's total population.<br /><br />As the graph shows, there is a correlation between high attendance states, and support for the Republicans in the election.<br /><br />It would seem likely that stronger conservative feelings of loyalty and authority contribute to support.spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-32501403191511176662009-11-08T07:02:00.000-08:002009-11-08T07:10:56.522-08:00Population Growth & Economic Development<script type='text/javascript' src='http://static.feedroom.com/affiliate/_common/js/fr_embed.js'></script><br /><div id='flashcontent'></div><br /><script type='text/javascript'><br />var so = new FlashObject ("http://economist.pb.feedroom.com/pb-comp/economist/custom1/player.swf", "Player", "402", "329", "8", "#FFFFFF");<br />so.addVariable ("Environment", "");<br />so.addVariable ("SkinName", "custom1");<br />so.addVariable ("SiteID", "economist");<br />so.addVariable ("SiteName", "The Economist");<br />so.addVariable ("ChannelID", "13f850c882b46b0d9f3ebe670ff8fa7cade671c7");<br />so.addVariable ("StoryID", "8e1a8d447643b75efb7a023789b8b6f989bfda68");<br />so.addVariable ("Volume", ".5");<br />so.addVariable ("HostURL", document.location.href);<br />so.addParam ("quality", "high");<br />so.addParam ("allowFullScreen", "true");<br />so.addParam ("allowScriptAccess", "always");<br />so.addParam ("menu", "false");<br />so.write ("flashcontent");<br /></script>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-10903366821144904912009-05-15T20:20:00.001-07:002009-05-15T20:20:52.701-07:00Matching emotional appeals to emotional context<p><strong><a href="http://www.sciencedaily.com/releases/2009/03/090323134313.htm">Fear Or Romance Could Make You Change Your Mind, Study Finds</a></strong><br /><br />ScienceDaily (2009-03-24) -- New research suggests that the effectiveness of common persuasion tactics can be dramatically altered by two primal emotions -- fear and romantic desire. ... <em>> <a href="http://www.sciencedaily.com/releases/2009/03/090323134313.htm">read full article</a></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-3843483589516275892009-05-15T20:16:00.001-07:002009-05-15T20:16:54.779-07:00Touching predicts purchase behavior<p><strong><a href="http://www.sciencedaily.com/releases/2009/03/090331112723.htm">Buyer Beware: Touching Something In A Store Increases Perceived Ownership</a></strong><br /><br />ScienceDaily (2009-03-31) -- To avoid unwanted or unnecessary purchases, keep your hands off the goods. That's the conclusion of a new study in the Journal of Consumer Research. ... <em>> <a href="http://www.sciencedaily.com/releases/2009/03/090331112723.htm">read full article</a></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-85917943091703544302009-05-15T20:02:00.000-07:002009-05-15T20:05:03.765-07:00Future use preference differs from immediate use preference<p><strong><a href="http://www.sciencedaily.com/releases/2009/05/090512102600.htm">Now Or Later? Consumer Product Evaluation Depends On Purchase Timing</a></strong><br /><br />ScienceDaily (2009-05-12) -- Let's say you planned to buy a new car at the end of the year. But then your car conks out and suddenly you need to make a purchase. A new study says you'll use different criteria to evaluate vehicles in that situation than you would if you planned to buy a car immediately but then had to postpone the purchase. ... <em>> <a href="http://www.sciencedaily.com/releases/2009/05/090512102600.htm">read full article</a></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-75698164463821924402009-05-15T17:32:00.000-07:002009-12-05T17:29:35.773-08:00Abortion attitudes -- a barometer of conservative anxiety?Recent polling has shown a dramatic increase then number of people saying they are against abortion. The increase has been most dramatic amongst whites -- particularly conservatives. Attitudes towards abortion haven't changed substantially amongst Democrats and Blacks.<br /><br />This recent increase <span id="SPELLING_ERROR_0" class="blsp-spelling-corrected">occurred</span> after the election of Obama in <span id="SPELLING_ERROR_1" class="blsp-spelling-corrected">November</span> 2008; a similar spike in anti-abortion feelings <span id="SPELLING_ERROR_2" class="blsp-spelling-corrected">occurred</span> in 2001.<br /><br />Could heightened stress from inter-group conflict -- terrorist attacks from Middle East, minorities being elected to the head of our government -- find its expression in greater angst about abortion? Abortion is an easy issue to declare your opposition to -- even those who agree with its need conceptually don't promote the behavior actively.<br /><br />Its easy to have strong emotions about the killing of babies -- feelings that may not be dissimilar in strength to fears of other groups of people in threatening positions. Perhaps these <span id="SPELLING_ERROR_3" class="blsp-spelling-error">inter-group</span> fears are displaced and publicly presented in anti-abortion rhetoric.<br /><br /><br /><a href="http://people-press.org/report/513/public-takes-conservative-turn-on-gun-control-abortion">read PEW Research poll here</a><br /><br /><a href="http://www.gallup.com/poll/118399/More-Americans-Pro-Life-Than-Pro-Choice-First-Time.aspx">read Gallup poll here</a>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-48192192082428718372008-08-28T12:51:00.000-07:002008-08-28T12:52:03.167-07:00People Trust Extreme Positions More<p><strong><a href="http://www.sciencedaily.com/releases/2008/08/080808105004.htm">Extreme Appeal: Voters Trust Extreme Positions More Than Moderate Ones, Study Finds</a></strong><br /><br />ScienceDaily (2008-08-08) -- Trying to appear moderate is not always the best strategy for capturing votes during an election, reveals a new study. Extreme positions can build trust among an electorate, who value ideological commitment in times of uncertainty. "A rational electorate is reluctant to support someone who does not exhibit commitment to some ideology," says USC economist Juan Carrillo. "Voters rightly perceive that someone without ideological commitment cannot have developed a valuable political program." ... <em>> <a href="http://www.sciencedaily.com/releases/2008/08/080808105004.htm">read full article</a></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com2tag:blogger.com,1999:blog-5380047909271286603.post-39784379696980574862008-08-28T11:18:00.001-07:002008-08-28T12:48:46.856-07:00Advertising Strategy varies based on Purchase Timing<p><strong><a href="http://www.sciencedaily.com/releases/2008/08/080814104843.htm">Timing Of Political Messages Influences Voter Preferences, Researcher Finds</a></strong><br /><br /><br />ScienceDaily (2008-08-15) -- In political campaigns, timing is almost everything. Candidates communicate with voters over a long period of time before voters actually vote. What candidates say to these voters is, of course, important, but it turns out that when they say it also influences voter preferences. ... <em>> <a href="http://www.sciencedaily.com/releases/2008/08/080814104843.htm">read full article</a></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-87887193271535251892008-08-09T18:19:00.000-07:002008-08-09T18:24:50.572-07:00We're Only Human...: Polling the Crowd WithinThe article below shows how our minds respond to questions that we don't know the definitive answers to. Basically, when allowed to return to the question and re-answer it at a later time, the "average" of our answers tends to be more accurate than our initial response.<br /><br />How could knowledge of this tendency be better utilized in market research?<br /><br /><br /><a href="http://www.psychologicalscience.org/onlyhuman/2008/06/polling-crowd-within.cfm">We're Only Human...: Polling the Crowd Within</a>: "www.psychologicalscience.org/onlyhuman."spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-45113546555389504792008-08-02T08:45:00.001-07:002008-08-02T08:58:46.043-07:00Market Research from the respondent's perspectiveThe following unsolicited account demonstrates how respondents often easily see the purpose of research. Humans' natural instinct to scan for, and assign, causation and intent to interpersonal events most certainly influences the survey responses they give to market researchers.<br /><br />The account also reveals the issue facing market researchers on almost every project: Very few business people are interested in research, as much as they are interested in validation. New and unsolicited information is a risk, until it can communaly seen as an opportunity. The amount of effort needed to convert new information into an acknowledged opportunity leads to most research findings being discarded, discredited or dismissed (as below).<br /><br /><br /><em>"Okay, so I am paid to participate in online surveys for the construction industry. (I was nominated to be on this panel by inadvertently impressing people with my knowledge and desire to increase my knowledge of the technical component of a building and how we describe and detail it. I am a rare and treasured bird in the architectural industry. I digress. The first several pages are general and anonymous and then the last pages are specific to the manufacturer who is eliciting feedback for specific products and their reception as a new product or image of a current product. Obviously you understand better than most people. So I take a survey and I felt that they were asking the wrong questions, even though it became evident what they wanted. But how do you get that feedback when all the Q’s are rate with a number strongly agree or disagree. I get paid $20 because they know how difficult it is to get an Architect to do something that isn’t an immediate task for an impending deadline. However, I felt some obligation since they a re a good company and I am favorably oriented to the majority of the products so I sent them an email of interesting and unexpected feedback for one of their products in the Chicago Market. It is unheard of for companies to get unsolicited feedback from Architects. I didn’t expect any response, but I was surprised by the dismissive response. She must be crazy to think I am have time to pursue this with a rep.<br /><br />Is this a common scenario with US corps or corps in general that they seek market feedback from the people who will select and use their product, but when these receive it unfiltered by marketing analysis they don’t know what to do with it?"</em>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com1tag:blogger.com,1999:blog-5380047909271286603.post-26642127204000188942008-07-12T18:56:00.001-07:002008-07-12T18:56:56.413-07:00The Desirability of High Prices<p><strong><a href="http://www.sciencedaily.com/releases/2008/06/080625193859.htm">The High Cost Of Low Status: Feeling Powerless Leads To Expensive Purchases</a></strong><br /><br />ScienceDaily (2008-06-26) -- Feeling powerless can trigger strong desires to purchase products that convey high status, according to new research. In a study that may explain why so many Americans who are deeply in debt still spend beyond their means, authors found that research subjects who were asked to recall times when someone else had power over them were willing to pay higher prices for status-symbol items. ... <em>> <a href="http://www.sciencedaily.com/releases/2008/06/080625193859.htm">read full article</a></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-46909790850512495822008-07-12T18:45:00.000-07:002008-07-12T18:49:05.683-07:00Designing Research Events for Accuracy<p><strong><a href="http://www.sciencedaily.com/releases/2008/06/080625193854.htm">Too Many Choices Can Spoil The Research</a></strong><br /><br />ScienceDaily (2008-06-27) -- The more choices people get, the less consistent they are in making those choices, according to a new study. The study's findings may affect the way researchers examine consumer choices. ... <em>> <a href="http://www.sciencedaily.com/releases/2008/06/080625193854.htm">read full article</a></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-68051991217837133342008-06-22T12:49:00.000-07:002008-06-22T16:18:00.407-07:00"Nature is Prodigal in Variety, though Niggard in Innovation"While many recognize this observation from Charles Darwin's closing chapter in <em>The Origin of Species</em>, he had borrowed it from Henri Milne-Edwards.<br /><br />Both of these naturalists were struck by the lack of dramatic innovation in the evolution of living things, and the preponderance of minimal variation and refinement of traits across species and time.<br /><br />Looking at product development, modern observers see a repetitive pattern of trial and error -- dominated by the refinement and combination of existing ideas and technologies to create products and services that will be selected by consumers.<br /><br /><a href="http://blog.guykawasaki.com/2007/06/ten-questions-w.html">Interview with the author of <em>"The Myths of Innovation"</a></em><br /><em></em><br />If, in life and business, creativity and innovation are nothing but adjectives that accrue to those willing to try and fail over long periods of time -- what leads to our lack of patience in promoting trial and error, and letting creativity and innovation occur naturally?<br /><br />How much has the belief that creativity is a personality trait cost businesses over time -- as they invested in ideas based on personalities, rather than consumer selection?<br /><br />Or has it cost business anything at all?<br /><br />Could the beliefs in dramatic innovation and creativity be -- like religious beliefs -- the stuff of thought that helps keep groups organized around a common activity, and committed to one another in businesses?spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com2tag:blogger.com,1999:blog-5380047909271286603.post-39391351573340635122008-04-27T08:16:00.000-07:002008-11-13T12:47:01.898-08:00Why do Market Researchers Visit Different Cities?<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeTJwozDwF0BUD6YvYZRfhWllU0GjqxiCN7oUB7T-RDiiAKzMNIfZEFD2f2k6GzdA3PfEK77wKkG0O2AX_iSqcQzaHYBIqHpEZCBwSZdNNmBUCMGfG-OihuVluypbi0Shp5Vc8gLzRXSZ2/s1600-h/venn010.jpg"><img id="BLOGGER_PHOTO_ID_5193944478357254834" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeTJwozDwF0BUD6YvYZRfhWllU0GjqxiCN7oUB7T-RDiiAKzMNIfZEFD2f2k6GzdA3PfEK77wKkG0O2AX_iSqcQzaHYBIqHpEZCBwSZdNNmBUCMGfG-OihuVluypbi0Shp5Vc8gLzRXSZ2/s400/venn010.jpg" border="0" /></a><br />The chart above is based on Richard <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Lewontin's</span> famous study, as cited in Spencer <span class="blsp-spelling-error" id="SPELLING_ERROR_1">Well's</span> <em>Deep Ancestry</em> (2007).<br /><br />The graph shows that the bulk of genetic differences is within a population of human individuals you may find, not between them. For instance, if we sample a population from an average city, not <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">discriminating</span> by race, we would account for at least 93% of the genetic differences.<br /><br />In a country such as the United States, with a highly mobile workforce, national mass media, and national retail chains, even the population differences between areas are greatly <span class="blsp-spelling-corrected" id="SPELLING_ERROR_3">diminishing</span>.<br /><br />This highlights one of the most perplexing inefficiencies in marketing research -- the ritual of conducting research events and focus groups in multiple cities. Rather expending resources on a larger sample size in a single location, money is spend on travel, multiple facilities and time.<br /><br />Not only are are travel expenses and time away from the office greatly inflated by this practice, but the likelihood of inserting false or misleading results into the research process is increased -- not diminished. Expecting different results by geographic area can easily be the first step in getting them.<br /><br />Certainly, environmental or marketplace factors do exist for some products. Marketers and researchers should carefully, and earnestly, identify these before they appropriate research funds.spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com1tag:blogger.com,1999:blog-5380047909271286603.post-29075616019992333922008-03-25T07:06:00.001-07:002008-11-13T12:47:02.164-08:00Burial vs. Cremation: Changing Commitment Displays<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggW1vx5-CPhe43_OCZ6oLsR4NZmktN3a1K2eFQ8SuQyP0ROA-DCKLmqriN7uRDVuE0NXwD64XsK4vRtDzEM3NdlOMdLAah3PsvjbEVlgdx_rqLbRH3_WEU41mVl3N9V0UJt30H2VlDskPV/s1600-h/untitled.JPG"><img id="BLOGGER_PHOTO_ID_5181680627990189922" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggW1vx5-CPhe43_OCZ6oLsR4NZmktN3a1K2eFQ8SuQyP0ROA-DCKLmqriN7uRDVuE0NXwD64XsK4vRtDzEM3NdlOMdLAah3PsvjbEVlgdx_rqLbRH3_WEU41mVl3N9V0UJt30H2VlDskPV/s400/untitled.JPG" border="0" /></a>The chart above plots year 2000 data from 48 states and the District of Columbia. The X axis shows the percentage of deaths resulting in cremation; the Y axis, the percentage of state residents identifying themselves as Baptist, minus the percent of state residents claiming no religious affiliation.<br /><br />The choice to be buried or cremated appears to be heavily correlated with one's attitude towards religion. Comparing state-by-state cremation and religious affiliation rates, a pattern emerges that reasonably predicted cremation rates at that time.<br /><br />Baptists were chosen as they were believed to represent a group with high social reinforcement for religiosity. Assuming states with high Baptist populations would be more traditional/conservative in social structure and traditions, it was expected that burial rates would be less likely to have been supplanted by the growing popularity of cremation. This appears to be the case.<br /><br />With the growing popularity of cremation, a chart of current data would show increased levels of cremation in states with higher Baptist populations, shifting the trend line to the right.<br /><br />The interesting question is this: Was it the traditions and rituals of active religious life that reinforced burial, or the cognitive biases in the brains of people drawn to active religious life that also biased towards burial? Perhaps time will tell as cremation grows in popularity and becomes the accepted norm, due to economic factors.<br /><br /><br />The data used in the chart can be found at these locations:<br /><br /><a href="http://www.casketstores.org/corgnewspr.html"><br /><p>Cremation rates here</a></p><a href="http://www.gc.cuny.edu/faculty/research_briefs/aris.pdf"><br /><p>Religious Affiliation Data here</a></p><p></p><p></p><p><br /><br /><br /></p><p></p><p></p><p>Thinking further about my question above, I've found additional data, from a survey by the National Cremation Association: </p><p></p><a href="http://www.cremationassociation.org/docs/wirthlin-excerpt.pdf"><p>Cremation survey here</a></p><p></p><p><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf_f6VnVOemyTvQHAPOSjtOdbKYDG3WiIQLh0BPgMXcs86zGx_Ugb19j0qYeukLMWn5jdyTJxKMZmfPzXM8OqFLzGsFKJm5s0aXORPp0RXkryE8myfxM9mCFDiP0EAxh7EWxZPUc3tNX_y/s1600-h/crematestats.JPG"><img id="BLOGGER_PHOTO_ID_5182780414495872882" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf_f6VnVOemyTvQHAPOSjtOdbKYDG3WiIQLh0BPgMXcs86zGx_Ugb19j0qYeukLMWn5jdyTJxKMZmfPzXM8OqFLzGsFKJm5s0aXORPp0RXkryE8myfxM9mCFDiP0EAxh7EWxZPUc3tNX_y/s400/crematestats.JPG" border="0" /></a>This survey, from 2005, corroborates the by state information linking religiosity to burial, and adds two more factors correlated to the choice of burial -- income levels, and self-identification as being "Black." </p><p>The picture that starts to emerge from these elements is one of the strength of group membership being a leading factor in burial choices. Factors -- economic, psychological, social, etc. -- which put a premium on group membership for well-being make it difficult for members to depart with deceased ones, and consequently, lead them to retain their bodies as both <span style="color:#3366ff;">symbols of their commitment</span> and touchstones of positive memories. The archetypal example being the policy of military groups to not leaving anyone behind -- alive or dead.</p><p>As acceptance of cremation becomes the dominant form of remains disposal over the next 10 years -- due to cost, land and "green" concerns -- it will be interesting to see what symbols and rituals arise in popularity to replace the practice of burial. </p><p></p><p></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com2tag:blogger.com,1999:blog-5380047909271286603.post-69641836766729453532008-03-09T12:24:00.001-07:002008-11-13T12:47:02.338-08:00Brand Affinity in Addictive Products<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsAXz_5RwJaKLfUU02sxFQ1W4Qjygf_DtxJrH8BXnjZsFtPdxbaaCbOJSj7rxHVRA3eOo_l6v6XyVkJQ7JFj_gyRHT9G5wnoAbEB6Pix0nrwhxw9F6heGjXyZtJxbbhCsCSUWNjWeZJTE3/s1600-h/CigaretteBrandPrefstab1.jpg"><img id="BLOGGER_PHOTO_ID_5175825295350873570" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsAXz_5RwJaKLfUU02sxFQ1W4Qjygf_DtxJrH8BXnjZsFtPdxbaaCbOJSj7rxHVRA3eOo_l6v6XyVkJQ7JFj_gyRHT9G5wnoAbEB6Pix0nrwhxw9F6heGjXyZtJxbbhCsCSUWNjWeZJTE3/s400/CigaretteBrandPrefstab1.jpg" border="0" /></a><br />The table above is from the 2003 National Household Survey on Drug Abuse report on cigarette brand preferences. Key findings from the report were:<br /><br /><ul><li><em>In 2001, Marlboro was the cigarette brand used most often by past month cigarette smokers, followed by Newport, Camel, Basic, and Doral.<br /></em></li><li><em>Approximately 85 percent of cigarette smokers aged 12 to 25 smoked one of the three most used brands, whereas smokers aged 26 or older reported more diversity in cigarette brand selection.<br /></em></li><li><em>White and Hispanic smokers were most likely to use Marlboro, while black smokers were most likely to use Newport</em>. </li></ul><a href="http://www.oas.samhsa.gov/2k3/cigBrands/cigBrands.htm"><p>read full article</a></p><br />As with alcohol, it appears that the neurological effects of tobacco work to create strong brand memories and affinity in their users. However, looking at the dramatic differences in market share based on their stated race/ethnicity, it appears that brand choice for these products is also strongly influenced by social affiliation pressure as well. The social/group pressures seem to be a bigger factor than geographic difference for this product category. <p></p><p></p><p>This points towards several opportunities for improved marketing campaigns:</p><ol><li>When marketers think about brand affinity and strength, it is common for products with high emotional/neurological components -- automobiles (movement/speed), beer (alcohol), food (taste), etc. -- to dominate the ideation and examples they use between themselves and clients. This is true even when the category in question offers little direct stimulation to the brain. It would seem that marketers who disciplined themselves to focus on products that have similar nervous system interaction patterns should be more likely to product effective campaigns -- versus referring to the campaigns that have the most salience to themselves and others.</li><li>Despite -- or perhaps because of -- the strong impact that tobacco has on the brain, social expectations still appear to play a big role in preference. This probably contributes to the tendency more expensive alcohol to be perceived as tasting better. This same phenomenon may not be as strong in products without the same emotional charge.</li><li>For product without a direct or continuous stimulation of the brain, messaging and position campaigns may have to be based on the incidents -- however infrequent -- when the brain is stimulated by feelings of intense satisfaction or frustration with the product. For instance, when the product fails, or is associated with positive situations -- like the care of baby or loved one.</li><li>All too often, marketers worry more about geographic preferences when doing positioning or research. As this example points out, the groups people believe they belong to are better predictors of segmentation and behavior than are the physical location in which they live.</li></ol><p>Have others experienced similar problems in researching products and services?</p><p></p><p></p><p></p><p></p><p></p><p></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com2tag:blogger.com,1999:blog-5380047909271286603.post-18570131875118799332008-03-08T11:26:00.000-08:002008-03-08T11:54:36.813-08:00Consumer Perceptions of Volume -- Sight vs. Touch<p></p><p><em><strong>Which Holds More: A Tall, Thin Glass Or A Short, Fat One?</strong><br /><br />ScienceDaily (2006-02-13) -- A fascinating new study from the March 2006 issue of the Journal of Consumer Research explores how our senses interact to gauge volume, with important implications for perception of consumer products and consumption patterns. Specifically, the article argues that "elongation effect" -- the common tendency to think that a tall, thin glass holds more than a short, stout glass of equal volume -- is reversed when touch is used instead of sight to evaluate how much a container holds.... </em><a href="http://www.sciencedaily.com/releases/2006/02/060213093156.htm"><br />read full article</a><br /><br />This study contrasts the differences in perceived size, based on whether an item is looked at, or touched. For items that can't be touched before purchase, height seems a little more important in imparting a feeling of volume; for items that are handled, thickness conveys larger volume. What implications should this have on product and product display designs, if being perceived larger creates a positive sense of value?<br /><p></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-37419751280761718042008-03-08T10:22:00.019-08:002008-03-08T11:54:11.667-08:00Appreciating style -- Is it the Appearance, or Perceived Effort?<p></p><p><em><strong>Recipe For Ad Success: Just Add Art</strong><br /><br />ScienceDaily (2008-02-15) -- Advertisers looking to add appeal to their products need to look no farther than their nearest art museum, according to a new study that finds that even a fleeting exposure to art makes consumers evaluate products more positively. The study represents a pioneering attempt to systematically demonstrate how visual art influences consumer perceptions....<br /></em><a href="http://www.sciencedaily.com/releases/2008/02/080211120643.htm">read full article</a><br /><p>This article summarizes a paper to be published in the Journal of Marketing Research, which shows that the addition of perceived artwork to a product -- a box, a soap dispenser, plumbing fixtures, etc. -- improves the likelihood the product is perceived more favorably or luxuriously. The nature of the artwork -- recognizable, aesthetically pleasing etc. -- appears secondary to the very presence of the artwork -- the impression someone made an effort to change the appearance of the package.</p><p>Returning to the question of style preferences -- how much is a preference based on aesthetics alone, and how much is it based on the perceived effort and value added to the item in question?</p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-12140582363586360102008-03-08T06:52:00.000-08:002008-03-08T12:03:05.423-08:00Brand Extensions versus Brand Birthing<p></p><p><strong><em>Old Dogs Don't Notice New Tricks: Prior Knowledge Affects How Consumers Accept New Information</em></strong></p><p><em>ScienceDaily (2008-02-16) -- Over time, consumers develop a set of cues that we then use to make inferences about products, such as "all French restaurants have great service" or "more expensive candles smell better." However, this set of predictable beliefs can make it difficult for us to learn and recognize other real, positive qualities that are indicated by the same cues, reveals a new study....<br /></em><a href="http://www.sciencedaily.com/releases/2008/02/080212122101.htm">read full article</a></p><p><em></em></p><p>The article above points to an interesting problem with brands and brand extensions. Often the accumated memories / brand experiences make it difficult for new advertising and products to change the experience that consumers expect, and consequently, enjoy. </p><p>Shouldn't we expect more literature and growth in the area of how endorsed brands can be used to give birth to new brands, in situations where paradigm changing products or services are developed that would best prosper if unconstrained by the "baggage" of the well-known brand? </p><p><em></em></p><p><em></em></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-32825185505555164632008-03-07T05:04:00.001-08:002008-11-13T12:47:02.469-08:00Conservatism and Early Adopters<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJlbO2FAhLS1dRwvKz30HlDui9gbWvq3pQt08Y9rZgB5kK3c7Dr6gk1cRMCHOjiGUJ1BnQAFE7k_erJSDt8ScsdjomyBC1baFTcgzZR9Uy6ZFyDBWqmOPzSVPLS5OaXcdQqCTZodxKmMew/s1600-h/conservatism.JPG"><img id="BLOGGER_PHOTO_ID_5174985036539018706" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJlbO2FAhLS1dRwvKz30HlDui9gbWvq3pQt08Y9rZgB5kK3c7Dr6gk1cRMCHOjiGUJ1BnQAFE7k_erJSDt8ScsdjomyBC1baFTcgzZR9Uy6ZFyDBWqmOPzSVPLS5OaXcdQqCTZodxKmMew/s400/conservatism.JPG" border="0" /></a> The chart above is from the paper <em>"Political Conservatism as Motivated Social Cognition"</em>, by Jost, Glaser, Kruglanski and Sulloway.<br /><br /><a href="http://www.wam.umd.edu/~hannahk/bulletin.pdf">Link to paper here</a><br /><br />The paper summarizes several studies linking the psychological traits of individuals to their political views, focusing on which traits are positively and correlated with conservatism.<br /><br />As the diagram above illustrates, fear & uncertainty are underlying contributors for the expression for political conservatism.<br /><br />From a marketing standpoint, this presents an interesting challenge: if political conservatism is positively correlated to wealth and disposable income, how do get these consumers -- the ones who can afford to take risks -- to try new and innovative products (as innovation has been negatively correlated to conservatism in some studies)?<br /><br />For this group, should innovative products be positioned as extensions of existing products -- downplaying their innovative features -- and emphasizing their performance attributed vis-a-vis peers? This would shift the consumer's mindset from a sense of risk of experimenting with unproven technology, to a fear that a competitor would be gaining an advantage.<br /><br />Building further on this notion, it would seem that products that mitigated fears and anxiety of unseen contagions -- disease and crime -- would also be well positioned for the politically conservative segment, and a means for innovative ideas to gain access to the financial power of these consumers.spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com3tag:blogger.com,1999:blog-5380047909271286603.post-91650481164510533642008-03-03T10:15:00.000-08:002008-11-13T12:47:02.630-08:00Escalation of Commitment and Jonathan Swift<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0gxApj345EDic9HAcViRXF2-W76iShEdQE8_I2FeHJncB6WQnAURjVgotwhmhKrw8yJ1NkR8kA2z9z3P5eAEVysN736uuP_75bvq5BlEJS3M0-zRdjtSVbs8_TBOuqW6Xg_WA7UkDRLQU/s1600-h/esccommpic.JPG"><img id="BLOGGER_PHOTO_ID_5173586575823366978" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 604px; CURSOR: hand; HEIGHT: 320px; TEXT-ALIGN: center" height="274" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0gxApj345EDic9HAcViRXF2-W76iShEdQE8_I2FeHJncB6WQnAURjVgotwhmhKrw8yJ1NkR8kA2z9z3P5eAEVysN736uuP_75bvq5BlEJS3M0-zRdjtSVbs8_TBOuqW6Xg_WA7UkDRLQU/s400/esccommpic.JPG" width="497" border="0" /></a><br />Escalation of Commitment (or irrational escalation) occurs when people persist in investing in an idea or course of action, despite an inflow of new information indicating that the idea or action is irrational. Psychologists and Organizational Behavioralists have been studying the phenomenon for quite some time; the table (click on it to enlarge) above summarizes several published studies (Mahlendorf, 2007).<br /><br />Examples abound of ideas that were pursued to great economic loss, despite readily available rational information that could foretell the probable outcome. From a market research perspective, understanding why this information was not used -- or counter-information was fabricated to negate the rational information -- is central to the understanding how new insights from research can be exploited by organizations.<br /><br /><em>It is useless to attempt to reason a man out of a thing he was never reasoned into... J.S.<br /></em><br />In response to these papers, some have argued that the largely emotional causes (optimism, selective perception, over-confidence, self rationalization, bias towards weighing project completion higher than the project value, etc.) do not adequately explain the behavior, and that the behavior at some level is rational.<br /><br />What if both sides in this argument are correct: Escalation of Commitment can be irrational at the local level, but rational at the species, or super-organism level?<br /><br />In a social species, genes guarantee a bias for following amongst the masses -- via tendencies that express themselves in feelings like the need for conformance, and to the extereme, in "separation anxiety". At the same time, there must be sufficient genetic variation to provide a varying amount of more aggressive individuals to lead. These innate desires may be in constant need of satiation; forming & maintaining social structures automatically.<br /><br />It is difficult to argue, looking at the evolutionary success of species that seem to function as "super-organisms" -- ants & humans -- that these genetic biases have operated in a way that appears rational, contributed to this success.<br /><br />At the local level however, where evolutionary competition is largely intra-species and typically between groups, the constant need for commitment on the part of individuals requires socially uniting hopes and goals to be generated at regular intervals.<br /><br />This would imply that the most important attribute of a hope or goal is its availability when needed -- the extent to which a goal is perceived rational is secondary, and will be accentuated by the emotions involved in anxiety reduction and belonging to a group. A key to leadership is often keeping a simple goal or hope foremost in the minds of followers.<br /><br /><em>Faith! he must make his stories shorter or change his comrades once a quarter… J.S.<br /></em><br />While there is no doubt that more rational goals (from an economic perspective) will be more salient -- stronger and longer lasting -- than irrational goals, the key for organizational and social stability may just be the presence of goals and hopes of any kind. For leaders, the key may be to keep goals in front of people, with the hope that some will be deemed successful at a later date.<br /><br /><em>I have always believed no matter how many shots I miss, I'm going to make the next one…. J.S.<br /></em><br />From market research perspective, the questions then become:<br /><br />When and where should research be done and communicated, to maximize the transference of rational information about customers and the market? Can it be funded in this manner?<br /><br />If much of the funding for research derives from projects already undergoing Escalation of Commitment, can rational insights be incorporated into the findings in a way that they stand out from any biased information produced by directed research activities?<br /><br />As market researchers strive to survive and thrive as a coherent function at the service of other organizations, what prevents them from falling victim to enabling irrational commitment, rather than ameliorating it?<br /><br />Finally, with market researchers organized into groups, in competition with other such groups, how immune are they to also experiencing Escalation of Commitment, and in their roles as advisors to others, how much damage can result to not only their reputations, but their clients’ businesses as well?<br /><br /><em>Ambition often puts Men upon doing the meanest offices; so climbing is performed in the same position with creeping… J.S.<br /><br /></em><br /><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHGf-TP9KamCO_6IDFOMrM7LftRqyGghCa3MDyQpMwrgPSy10lwJu89G2jnGKOTifTwtL1xL94DroxTh15x7kidwAkadVn0oh76cMk5x2Kmnp7aqhx1UTNs09c2X-Q5p7pzvKnST8Lru4O/s1600-h/esccommpic.JPG"></a><br /><br /><br /><br /><div></div></div>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com1tag:blogger.com,1999:blog-5380047909271286603.post-79074892722414246122008-02-24T08:18:00.000-08:002008-11-13T12:47:02.726-08:00What kind of wine would birds prefer? The impact of volume on preference.<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgnNPeEderaFUhxP7HN5boE3sXzbzvU4ASTflZ7tf09jyqMyrsKj9vno02Q2EUfAml_jRtIL8H02r2LdFGRKmHKj2xvp1FyExaJZvbuZI0aHJ8oy1B2bbmuX0HQN4nffPUkYeXzecYxpGt/s1600-h/birds.jpg"><img id="BLOGGER_PHOTO_ID_5170586662992839362" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgnNPeEderaFUhxP7HN5boE3sXzbzvU4ASTflZ7tf09jyqMyrsKj9vno02Q2EUfAml_jRtIL8H02r2LdFGRKmHKj2xvp1FyExaJZvbuZI0aHJ8oy1B2bbmuX0HQN4nffPUkYeXzecYxpGt/s400/birds.jpg" border="0" /></a><br /><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhl5NjEo30X-lsZ2MlabVZECvp26NJJv1xH405NGyhPxra5bmq3cyxzZfzVcQuwNX_9j5K6Rpi0czJ8VKkGn4xpx8KjmRjauTpF8XqETIL-MB8A2bdofkvvFHsAtqV5-RcVdKadANuZC7j/s1600-h/birdscounting.gif"></a><br /><br /><div></div></div><br /><p>This graph, showing the accuracy with which birds noted differences in quantities, is described in Jacky Emmerton's article: <em>Birds’ Judgments of Number and Quantity</em>, which can be found here<em>:</em> <p><a href="http://www.pigeon.psy.tufts.edu/avc/emmerton/default.htm">Link to article</a><br /><br /><p>The article covers several studies, which consistently show that birds consistently perceive differences in numerosity, with their ability to discern improving as the differences between two amounts is proportionally differnet. It also relates the extra effort needed to train birds to select lower quantities when shown a pair of values (volumes), as they appear to be drawn more to the larger one.</p><br /><p>This ability has also been found in other animal species, and is increasingly believed to have deep evolutionary roots.</p><br /><p>As consumers select products, how does this deeply ingrained tendency to compare numerical values -- both symbolically and spatially (in size or volume) -- impact purchase preference?</p><br /><p>It would seem a great deal: </p><br /><p><em>A Wine's High Price Adds to Its Pleasure, Study Finds</em> <p><span style="font-size:85%;">Mclatchy-Tribune News Service. - February 24, 2008</span><br /><a href="http://www.psycport.com/showArticle.cfm?xmlFile=krt%5F2008%5F02%5F24%5Fknigb%5F0858%2D0016%2DWINEINTHEBRAIN%2DADV24%2EWA%2Exml&provider=Mclatchy%2DTribune%20News%20Service%2E">Article is here</a><br /><br /><br /><p>The article reviews several recent blind tastse tests, where the presence of higher prices biased consumers' stated taste preferences. It would seem the higher prices (numbers), stimulated their sense of status or acquisition, and their subsequent report of preference.</p><br /><p>Understanding this innate tendency for consumers to overstate demand for higher price or greater volume product, how should we structure research events to account for the counter impact of Prospect Theory (see prior blog entry), and produce accurate forecasts of real life sales?</p><br /><p></p><br /><p></p><br /><p></p><br /><p></p>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-19094069101689158412008-02-23T17:05:00.000-08:002008-03-07T05:33:51.241-08:00Segmentation research and the resulting advertising to target segments -- is it predestined to succeed?Acquiescence (the propensity for survey respondents to answer positively to questions at abnormally high frequency) on the part of survey takers has been an issue that researchers have struggled with for as long as they've been analyzing surveys.<br /><br />Research into this behavior has identified social status, age, unmotivated survey takers, ethnicity, and "impulsive and emotional extraverts with a desire for external stimulation" were "yea-sayers" (Couch and Keniston, 1960) as groups that exhibit this behavior from time-to-time. In response, researchers have altered questionnaire design to try identify respondents that are overly eager to respond positively to the subject matter be asked about -- to varying degrees of success.<br /><br />Thinking about the research that advertising agencies often conduct in the process of developing positioning and creative concepts for a brand, as well as the tracking studies used to monitor and assess the resulting advertising, the issue of acquiescence could have a dramatic impact on the perceived success of advertising campaigns.<br /><br />Consider this scenario: an ad agency running a segmentation study for a client, one who has helped develop the survey, and has focused on maximizing the subjects included in the segmentation survey -- a common occurrence.<br /><br />Regardless of product, the segmentation survey will produce a segment (amongst several) that is positive, a group that "wants it all" -- in terms of the product/service features being considered. (This group, due to the prevalence of positive responses, contains a high frequency of "acquiescent" responders.)<br /><br />This segment will most likely become a target in the positioning process, as they can easily be seen as "early adopters" because of their positive attitude (i.e. - they will influence the other segments).<br /><br />The "acquiescent responders" -- because they are predisposed to frequently answering "yes" to survey questions -- will also be more likely to respond favorably at a later date to the positioning and advertising tracking studies made to assess the advertising that grew out of the segmentation work.<br /><br />From the advertising agency's viewpoint -- what would be your motivation for excluding this group from either the segmentation or the following tracking studies? Regardless of product/service, or advertising execution, the "target" segment is more likely to report recall of seeing the ad, and having favorable recollections of it, due to the higher percentage of "acquiescent" respondents in the target segment.<br /><br />Has anyone had experience with this phenomenon?spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com2tag:blogger.com,1999:blog-5380047909271286603.post-24840323245758193652008-02-19T07:08:00.001-08:002008-11-13T12:47:02.854-08:00Memorability and advertising<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYFSr5wxe0YqVexmrFHEsM7GullAQjBbRxWxAXQz_gJeKYqEn8SOlyDFV1JOeqJs49B1MmAqf1Zm9v2Htcc1G2hbdrVnlIXJaPD4FQZA7F7Z6M1mwkuogaC_lRZC_eQDTREjdRdoUH-gsT/s1600-h/memory+loss.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYFSr5wxe0YqVexmrFHEsM7GullAQjBbRxWxAXQz_gJeKYqEn8SOlyDFV1JOeqJs49B1MmAqf1Zm9v2Htcc1G2hbdrVnlIXJaPD4FQZA7F7Z6M1mwkuogaC_lRZC_eQDTREjdRdoUH-gsT/s400/memory+loss.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5170698327847568082" /></a><br />The chart above can be found in this paper:<br /><br /><a href="http://www.psych.ubc.ca/~schaller/Norenzayan2006CogSci.pdf">Link to paper here</a><br /><br />It demonstrates the tendency of the mind to recall events and stories that contain unexpected ("counter-intuitive" in the chart) elements better than stories that are largely mundane -- without any surprising aspects to them. The key to maximizing memory recall appears to be optmizing the amount of unexected material in a story -- the more you add, the more memory degrades. Perhaps this because too much discord is created in the mind, as it seeks to follow a message or story.<br /><br />As we think of advertising and messaging research, is the key to identifying an effective message the likeability or relevance of the message, general recall of the message against a norm, or the specific kinds of drivers for the recall?<br /><br />How can messaging research be improved to better understand how and which drivers for recall are most effective at optimizing memory creation and retention?<br /><br /><br /><script type="text/javascript"><br />var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www.");<br />document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));<br /></script><br /><script type="text/javascript"><br />var pageTracker = _gat._getTracker("UA-3674673-1");<br />pageTracker._initData();<br />pageTracker._trackPageview();<br /></script>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0tag:blogger.com,1999:blog-5380047909271286603.post-2666134927375979132008-02-19T06:01:00.000-08:002008-11-13T12:47:02.996-08:00Prospect Theory and the proportion of generic sales in a category<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjf6wCVXpecv4nGgf7_T5s6pH58J_4jaU2F9eAA0IgEQCojvm_hH88eUdIZ7nm02EC84ufzCVjuU6-0LGHPzRknaILSItlhshBXASyUESmaLTQUBlAdEScfkLvq6dXjav3Tf4ae2rCbxkBe/s1600-h/JoyLoss.gif"><img id="BLOGGER_PHOTO_ID_5168693724876604050" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjf6wCVXpecv4nGgf7_T5s6pH58J_4jaU2F9eAA0IgEQCojvm_hH88eUdIZ7nm02EC84ufzCVjuU6-0LGHPzRknaILSItlhshBXASyUESmaLTQUBlAdEScfkLvq6dXjav3Tf4ae2rCbxkBe/s400/JoyLoss.gif" border="0" /></a><br /><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi-6dsdqsVnWL9AQJFm0v1ZZ8ABckT0YjoXJuvtAJrlGz1V1vQMjDCe9-1R2ZjWQWAFrkWJPUMLzhvsp_nRdQ3_LrOz580VLiDbVp7Y9Z7IwXNSStRH0Qta0eM_9fhT5LxvI__TdPvwjChB/s1600-h/JoyLoss.gif"></a>The graph above, developed by Kahneman and Tversky in 1979, can be found at this site:</div><br /><br /><a href="http://www.investopedia.com/university/behavioral_finance/behavioral11.asp">Link to paper here</a><br /><br /><div></div><br /><div>It shows how consumers feel pain at a greater rate when losing money, then they feel pleasure by making profitable transactions. </div><div></div><br /><div>A key element of Kahneman and Tversky's theory is the "reference point" that consumers use to determine at what point they are gaining of losing money. Establishing this reference point for a product or service category is essential in forecasting sales.</div><div></div><div></div><div><br />Given the distribution of sales by price point discussed in the previous blog entry, if this reference point is the average or median price of available alternatives, more consumers should opt for lower cost products to mitigate immediate pain ($ loss) by fogoing future possbile benefits of durability, aesthetic advantages, and brand image. </div><div></div><div></div><div><br />This tendency of consumers to value losses greater than they do gains ensures a large percentage of sales for almost all product categories will be available to generic/private label/store brand product that can be sold at competitive prices with a minimum of brand cachet.</div><div></div><div></div><div><br />When conducting research, how do integrate this insight into the forecasts we create? What is the best way to establish the reference point -- both overall, and by consumer segment? To what extent does this technique ease the challenges of pricing product?</div><div></div><div></div><br /><div></div><br /><br /><script type="text/javascript"><br />var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www.");<br />document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));<br /></script><br /><script type="text/javascript"><br />var pageTracker = _gat._getTracker("UA-3674673-1");<br />pageTracker._initData();<br />pageTracker._trackPageview();<br /></script>spandrelhttp://www.blogger.com/profile/07579434668440933447noreply@blogger.com0