Friday, October 24, 2014

Offer justifications for consumer’s choices

Sometimes we feel the need to be able to justify some of our consumption decisions. Some decisions we want to be able to justify to ourselves. The justifications are not necessarily the real (deep) reasons for the choice. But these justifications give rationale for the choice and sound good. Typically people buy cars they want, and justify the choice afterwards with environment friendly, economic, re-sale value etc. argument.

Justification affects consumer’s choices

Most consumer decisions do not require any justification, however. However, it is interesting, that if people expect that they are required to justify their choices to others (or themselves) afterwards, their choices change (Ashton (1992)[i], Ashton (1990)[ii], Simonson (1989)[iii].) According to Okada (2005)[iv] people want to have fun, and they are more likely to have fun if the situation allows them to justify it. People choose the hedonistic option over the utilitarian option if both choices are represented separately. If, however, both options are represented at the same time, people choose the utilitarian option. According to this theory if you were to choose weather you sell cookies or salad, maybe you should go for cookies. If you sell both, salad will dominate. Hedonistic choice is hard to justify.

The decisions that require justification

It is not surprising, that the more important decisions, the more they require justifications (Willman-Iivarinen)[v]. For example 45% of Finnish people wanted to be able to justify their voting decision in European Parliament election, but only 5% felt the need to justify their everyday media choices. [vi] Simonson & Nowlis (2000)[vii] and Shafir et al. (1993)[viii] propose that when justifying the choices, the motive is more important than what alternative is chosen. “It is more important to be able to explain why than which”.

If the choice involves other people, justification is an important goal. If other people are aware of the choice, or if the choice has some effects for them the more important it is to be able to justify the choices (Willman-Iivarinen)[ix]. But it is even more important to be able to justify the choice, if consumer faces some psychological costs. That is, if the choice was between unsatisfactory options.

How is this related to marketing

Many marketers know that, in order to sell efficiently they need to combine emotional and rational elements in marketing. The emotional elements are used to persuade consumer, and make him/her understand that they want the advertised product. The rational element will provide a reason or justification for the choice. When engineers plan marketing they only provide data and describe features. Artistic marketers are only concentrating on the will and emotions. However, it would be wise to combine these at least when the choice is potentially important, may involve other people or is visible for others. Sometimes, it is not enough that consumers want a product; they also need a reason to buy it. This reason does not have to be rational, only rational enough. If consumer already wants to get the product, she/he will accept even pretty thin justifications.

[i] Ashton, Robert H. "Effects of justification and a mechanical aid on judgment performance." Organizational Behavior and Human Decision Processes 52.2 (1992): 292-306.

[ii] Ashton, Robert H. (1990): "Pressure and performance in accounting decision settings: Paradoxical effects of incentives, feedback, and justification." Journal of Accounting Research 28 (1990): 148-180.

[iii] Simonson, Itamar. "Choice based on reasons: The case of attraction and compromise effects." Journal of consumer research (1989): 158-174.

[iv] Okada, Erica Mina. "Justification effects on consumer choice of hedonic and utilitarian goods." Journal of Marketing Research (2005): 43-53.

[v] Willman-Iivarinen, Hanna (forthcoming): Consumer’s media choice, Dissertation, Tampere University.

[vi] Willman-Iivarinen, Hanna (2014): Voter’s decision making in European Parliament election and forthcoming Consumer’s media choices. 

[vii] Simonson, Itamar, and Stephen M. Nowlis. "The role of explanations and need for uniqueness in consumer decision making: Unconventional choices based on reasons." Journal of Consumer Research 27.1 (2000): 49-68.

[viii] Shafir, Eldar, Itamar Simonson, and Amos Tversky. "Reason-based choice." Cognition 49.1 (1993): 11-36.

[ix] Willman-Iivarinen, Hanna (forthcoming): Consumer’s media choice, Dissertation, Tampere University.

Friday, October 10, 2014

How will people choose their favorite team in Volvo Ocean Race 2014-2015?

Volvo Ocean Race (VOR) 2014-2015 sailing competition begun with an opening in-port race last weekend. The journey around the world starts on Saturday 11th, October. It is a huge media event. Volvo Ocean Race Facebook page has over 1 million followers.

It is interesting to ponder the choice of favorite team in the Volvo Ocean race, since it is a one time event. The teams do not exist before or after the competition. Next time the VOR will be organized, there will be different teams, sailors, sponsors and boats. When people choose their favorite team they also choose certain values. Chosen team is a symbol for something special. Being a fan is always part of being a part of something bigger than just a team. People want to know more about the teams, individual sailors, boats, sponsors etc. There are seven teams this year:

1.      Team SCA, Sweden (no Swedish sailors, mainly American and British).
2.     Abu Dhabi Ocean Racing, Emirati (One Emirate sailor)
3.     Dongfeng Race Team, China (About half of the sailors is Chinese) 
4.     Team Brunel, Netherlands (Two sailors from Netherlands)
5.     Alvimedica, Turkey and U.S.A (Turkish money and American - Australian sailors) 
6.     Mapfire, Spain (About half of the sailors are from Spain) 
7.     Vestas, Denmark (Two Danish sailors, the rest are mainly from Australia)

Following competitions is much more fun, if one has a favorite team. Being a fan to a team, is a form of “participating” in the competition. The experience is more powerful the more one wishes success for a certain team. But, how to choose a team?

Choosing the favorite team

There are several possible reasons to choose a certain team:

Geographics. The fan identity for local team or national team is mainly given. One needs to justify, if one does not support local teams. But there is very limited number on boat and nationalities competing this time. I guess Spanish people will mainly stand behind the Spanish team (Mapfre) and Chinese people will support Dongfeng. But, it might not be so evident for other teams, who have a very international crew. For example Swedish boat, SCA, has not Swedish sailors.

Support women. Team SCA has only women. Some of them have earlier experience from the race and some have sailed in the Olympics.

Support environment. Danish company Vestas makes windmills. Their advertising the race village was classy. Wind energy is environment friendly and helps remove poverty in areas where other energy forms are costly. It is hard to disagree with these values. Windmills and sailing definitely match, as Vestas puts it “Wind means the world to us”. Vestas has a wining attitude (see t-shirt below).  

Best sailor. One might have some connections to a sailor before. These sailors represent different nationalities and values. They also have various sailing histories; some have participated in VOR earlier, some have sailed in Olympics. As the race proceeds, audience starts to notice different sailing styles: some are taking risks, some are avoiding them, some are innovative, some arrogant. An audience member might find a certain sailing style appealing, perhaps the kind of style he/she recognizes in themselves or wishes to adopt. 

Potential success. People like to be on the winning side. When the team I support wins, I feel that I have won also (or at least I can be satisfied with the way I make choices).

Under dog. There are many people who feel the appeal of the under dog. They do not want to support the team that has most money or talents. (Vandello et al. (2007)[1])

Fan products. Fan products have a very strong affect for the process of becoming a fan (Ahola (2014)[2]. It is relevant to have many fan products to engage many different audiences. People might even choose a team based solely on the fan products.

Vague indefinable sympathy. Many people are not able to reason state the reason why they support a certain team, they just do.

Risks and costs related to supporting a team

Typically, choosing to support one team might have some downsides and risks. Normally, when we choose one product we loose the opportunity to choose the other one. This is not necessarily the case here, since people can find it in their heart that it is ok to have several favorites. Other possible risks and costs:

SCA sells hygiene products, which are not the coolest products in the consumer market (possible psychological cost). SCA is also the only women’s team. Some people might find it uncomfortable that the team seem to be selected based on gender not skills or personality.

There is always a poor performance risk. This risk is mainly about social embarrassment, if the team sails poorly. We do not know much about the teams beforehand, so the risk is highly relevant.

Even though none of the teams has claimed anything about religion or politics, it may be revealed later on. Even the slightest imaginary connections might be a hindrance to some fans.

Marketing the teams for fans

When it comes to marketing the teams for fans, SCA stands out. It has bought nearly all the outdoor marketing spots in Alicante, where the race starts. SCA t-shirts are very visible in the whole town. SCA was the only team that had a fan product shop on their own. And they even had a Lego model from their boat. I am sure all this effort is worth it.  It is highly relevant what kind of products teams have, since last time 2,9 million people visited the race villages.[3]

The other teams do not have nearly as many products as SCA has. For example Vestas has a button and a t-shirt. This is pretty lame. 

Chinese team support staff had a great “ninja” show and fine outfits. Even though the show was fine, it was not much connected to sailing. Neither are the tractors Dongfeng is selling. Contrary to this Abu Dhabi’s connection to sailing and race is clear, since it is one of the race villages. I think it is rather stylish, that they have their own team. Alvimedica represent Turkish money and United States. This team seems to be very skilled at least in short races, they won the in-port race last weekend. The picture is taken when they leave the port for that race. The spirit is good.

SCA has support from the Swedish royals. Crown Princess Victoria is a godmother for the team, and Prince Carl Philip participated in the in-port race. I kind of like the idea off being in the same team with Carl Philip…

(Photos are taken by Sami Iivarinen) 

[1] Vandello, Joseph A., Nadav P. Goldschmied, and David AR Richards (2007): "The appeal of the underdog." Personality and Social Psychology Bulletin 33.12 (2007): 1603-1616.

[2] Ahola, Samuli (2014): ”Etäfanin faniutuminen ja identiteetti - yksityisiä kaukosuhteita vai yhteisön karnevaalia?”, Gradu Viestinnän, median ja teatterin yksikkö, Tampereeen Yliopisto.
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Friday, October 3, 2014

Dopamine - the real shopping superpower

Shopping is enjoyable consumption

When consumption is enjoyable leisure time activity we call it shopping. Many people find shopping very entertaining (ex. Hirschman & Holbrook (1982)[i], Mäki & Boedeker (1997)[ii]), Boedeker (1995)[iii], Boedeker (1997)[iv]).Shopping is one way to manage mood. There are several sources providing pleasure from shopping: we solve problem (buy items we need), we buy opportunities, identity claims and ways to improve our image in the eyes of peers. Even though shopping may be fun itself, a nice pass of time, we also get biological pleasure from shopping. When we shop, our brains produce a chemical called dopamine. Dopamine makes us feel good.

How dopamine makes us buy

Our brains produce dopamine when we expect a reward (Schultz (2000)[v]). When we see nice products, we imagine ourselves having and using those products. We imagine how our lives will be better with the products. This makes us feel so good, that we nearly automatically wander towards the register (unless a budget limit or reason intervenes). Since dopamine is related to anticipation of a rewarding experience, it may explain why people derive pleasure from window shopping (Parker-Pope (2005)[vi]). We learn to expect dopamine rush in certain situations. When we see, hear or smell possible reward related things the dopamine level goes up. Dopamine is a natural part of human reward system, by doses of dopamine, we learn what is good for us. Expected reward of shopping may be self-appraisal, social, status or just plain dopamine dose. Buying makes us happy – at least in the short run. Dopamine provides very short pleasure; as soon as we step out of the shop it starts vanishing from our brains.

Dopamine is addictive

Dopamine is highly addictive and it makes us potentially addicted to shopping. Our brains remember how good it felt last time we did some serious shopping. When dopamine levels are high, people act more impulsively than when they are low (Pine et al. (2010)[vii]). Dopamine  rush is a hindrance for rational thinking. Since we start to experience dopamine already at the planning stage, and it causes impulsivity it is hard to resist. The figure below illustrates.

This impulsive behavior in connection with the dopamine’s relation to anticipated rewards explains many addictions (Pine et al. (2010)[viii]). A compulsive buying disorder is an uncontrollable obsession when a person shops or thinks about shopping all the time. Buying expensive products and using a lot of time in shopping has unfavorable financial and social consequences. The serious compulsive buyer buys things that she/he does not even think he would need.

 7 ways to improve your marketing with dopamine

  1. Marketing can be used to strengthen the image of expected reward. We should try to get the consumer image how their lives will be improved by the product.
  2. Scent marketing is based on dopamine. When we experience good scents, our brains produce dopamine, we feel good and we are eager to shop.
  3. Using riddles in marketing is a nice way to add dopamine in your customers lives. When they solve the puzzle, they get the reward in form of dopamine rush and they feel good.
  4. Cute pictures produce dopamine. We like to see pictures of babies and kittens. The enjoyment of everything cute gets positively associated with the product.
  5. Small pleasant surprises add dopamine to our lives. Marketing that repeat a pattern and then breaks is is a good example. See more.
  6. Gamification is a good way to add dopamine, since games reward people. When we play, learn and succeed we get rewarded. This is why so many marketers are adding games to their campaigns.
  7. Sweepstakes get people imagining all the nice things they could do if they won the prize. In the spirit of pleasant expectation they participate in the lottery and might buy the product also.

When I gathered the list I used some ideas from following blog posts : 

How dopamine affects your shopping behavior

From consumer’s point of view, it might be a good thing to recognize how dopamine affects behavior. If you wonder or regret your shopping afterwards, the knowledge of dopamine might help you, to make better decision in the future. For example the site ”The DopamineProject – Better living through dopamine awareness” is dedicated to raise the awareness of dopamine. Even though dopamine is an uncontrollable biological reaction, we can try to control our behavior. I feel that, I have been able to reduce somewhat my own vanity shopping. But sometimes it is just so nice to buy something ,small (or big), very unnecessary…

[i] Hirschman, Elizabeth C. &  Holbrook, Morris B. (1982): “Hedonic Consumption: Emerging Concepts, Methods and Propositions”, The Journal of Marketing, Vol. 46, No. 3 (Summer, 1982), pp. 92-101

[ii] Mäki, Katja & Boedeker, Mika (1997): ”Kulutus – arkista aherrusta vai iloista irrottelua?”, Publications of Turku School of Economics and Business Administration, Series Discussion and Working papers 4:1997

[iii] Boedeker, Mika (1995): ”Optimaalinen stimulaatiotaso shoppailemalla?”, Publications of turku school of Economics and Business Administration, series Discussion Papers and Working Papers 6:1995

[iv] Boedeker, Mika (1997): ”Recreational Shopping: The Role of the Basic Emotional Dimensions of Personality”, Publications of turku school of Economics and Business Administration, series A-9: 1997 (väitöskirja)

[v] Schultz, Wolfram (2000): “Multiple reward signals in the brain”, Nature Reviews Neuroscience Dec2000, Vol. 1 Issue 3, p199-207

[vi] Parker-Pope, Tara (2005): “This Is Your Brain at the Mall: Why Shopping Makes You Feel So Good”, Wall Street Journal - Eastern Edition 12/6/2005, Vol. 246 Issue 122, pD1-D1

[vii] Pine, Alex & Shiner, Tamara Shiner & Seymour, Ben & Dolan, Raymond J. (2010): “Dopamine, Time, and Impulsivity in Humans”, The Journal of Neuroscience, 30 June 2010, 30(26): 8888-8896;

[viii] Pine, Alex & Shiner, Tamara Shiner & Seymour, Ben & Dolan, Raymond J. (2010): “Dopamine, Time, and Impulsivity in Humans”, The Journal of Neuroscience, 30 June 2010, 30(26): 8888-8896;