Tuesday, November 19, 2013

The Online Shopper

In today's day and age, people use computers numerous times each day. Most people have several computers in their home, a computer at work, and a smartphone in their pocket that acts as a computer. These devices have become part of us and we rely on them to research many products and services that we are unfamiliar with. Because so many more customers are buying products online than ever before, companies must design effective ways to create an enjoyable online experience for the customer. These companies want the customer to find the information that they are searching for in a timely manner, and easily make an online transaction without any hassle. A good experience will influence a new customer to return to the same site in the future and make another purchase.
The findings in this study show that the experience of a new customer looking to purchase a product online differs from the experience of a returning customer. New customers seek enjoyment and perceived control when they explore a new website in search of purchasing a product. On the other hand, repeat customers are not influenced by these factors, instead they want a value-added experience. These results are extremely important considering the fact that it is much more expensive to gain a brand new customer than to keep a current customer coming back. E-commerce companies must find the formula to attract new customers to their site while keeping returning customers content. This is obviously easier said than done, otherwise companies would not be forced to invest thousands and millions of dollars into researching how to improve user website experience.
Different consumers take different factors into consideration when they decide whether to purchase a product online or not. For example, some consumers are influenced by the perceived risk of purchasing a product online. We have probably all heard stories of an individual's private information being stolen after purchasing a product online. No matter how safe websites become, there will always be people that are too afraid to get their identity stolen and avoid buying online altogether. Another important factor that consumers consider is the ease of use of the website. This is especially important for people who are visiting a site with the purpose of learning about a product versus actually buying it. Some sites offer different interfaces depending on the user's behavior and this leads to improved user performance. Unfortunately, it does not reflect customer satisfaction, so it is not as effective as one might think. Companies must continue to design new programs that will not help them learn more about their customers and convince them to return. Unlike in a brick and mortar store, the business cannot have as much control of the purchasing process, so they must find other ways to make the experience effective and enjoyable.

Consumer Behavior in Web-Based Commerce: An Empirical Study
Marios Koufaris, Ajit Kambil and Priscilla Ann LaBarbera
International Journal of Electronic Commerce , Vol. 6, No. 2 (Winter, 2001/2002), pp. 115-138
Published by: M.E. Sharpe, Inc.
Article Stable URL: http://www.jstor.org/stable/27751014

Go big or go Home

We have all been in line at our local fast food restaurant behind a person that it ordering way more food than they should be. The customer supersizes their burger, their fries, and their drink as well. Why are Americans so obsessed with supersizing their food, even if they did not intend to do so before walking up to the fast food counter? One reason why people do this is because product size is seen as a signal of status. This is especially true in lower socioeconomic communities, which coincidentally is where most unhealthy fast food restaurants are found. Over the last 20 years drinks have increased in size by 52%, Mexican food by 27%, and hamburgers by 23%. These are just a couple of examples of the most common items that American consumers go out and buy.


First of all, we will observe how humans have a need for status and how it affects the way we consume products. A need for status is often referred to as "the motive to attain respect or admiration by others." Humans often search for status because higher status generally leads to greater social and individual benefits. Everybody enjoys getting perks that other people are not getting. Even research on animals has determined that those animals with higher status have greater access to food, over the lower status animals. It sounds as if status is found not only among humans, but in the animal kingdom as well.

Studies show that even mundane products that are not generally associated with status are still used to signal status. In an experiment, people were told to choose different size products, such as pizza, coffee, and smoothies. The same people were then told to determine other people's characteristics based on their decision. Results showed that people that chose the largest product were seen as having a higher status than those who chose the smaller options. However, non status dimensions, such as honesty, niceness, and attractiveness, were not determined based on the choice they made.

Additional experiments determined that people who are generally powerless, or have very little power are more likely to choose the largest product in order to feel a sense of high status. Unfortunately, when discussing food, these choices often lead to weight gain which then leads to a lower status in the long run. A solution that is presented is to decrease size portions all-together. Consumers are inclined to choose a product that is larger than those that it is being compared to simply because it is the biggest of the products. By decreasing size portions altogether, Americans would still choose the biggest option, but it would not be as big as it is right now. Obesity will continue being an issue across the country until consumers make smarter decisions for themselves, because restaurants will not cut into their profits unless they absolutely have to.

Super Size Me: Product Size as a Signal of Status
David Dubois, Derek D. Rucker, and Adam D. Galinsky
Journal of Consumer Research , Vol. 38, No. 6 (April 2012), pp. 1047-1062
Article DOI: 10.1086/661890
Article Stable URL: http://www.jstor.org/stable/10.1086/661890

Avoiding Embarrassment

Ever bought an embarrassing product at the supermarket, and crossed your fingers at the checkout hoping the cashier will not give you a weird look? Many people are faced with the dilemma of wanting to purchase a rather embarrassing product, but not wanting to be judged for it. What is their solution? One option which consumers have turned to is filling up their cart with other non-embarrassing merchandise to offset the embarrassing items. The idea is that the cashier will spread their attention amongst all of the items in the shopping cart, rather than focus on the one single embarrassing item, if the cart were empty.

This solution might sound a bit absurd, especially considering the fact that the customer will most likely never see the cashier again. However, it is human nature that we do not like feeling uncomfortable or embarrassed, regardless of the environment or the people present. Also, most people have a public identity that they want to keep positive. The fact that they are purchasing an embarrassing item, could tarnish their pubic identity, even if it is merely the cashier judging them.

Another solution to buying an embarrassing item is to wait until no other shoppers are present before approaching the item on the shelf. Even if other shoppers might be getting the same item, consumers prefer to just wait until they are alone in an aisle to put the item in their cart. Another experiment tested how consumers felt about purchasing not only an embarrassing product, but also other products that might seem embarrassing when purchased at the same time. For example, would a consumer be more embarrassed to purchase condoms along with a box of tissues and a bottle of lotion, rather than just condoms alone? The experiment showed that consumers would indeed be more embarrassed to purchase additional complimentary items to the already embarrassing product.

Even though embarrassing situations can be amusing at times, consumers do not find amusement in having to purchase an embarrassing item. The studies conducted prove that even if the customer feels slightly embarrassed, he will change his actions to attempt to not feel as bad. Obviously there are different methods which shoppers use to avoid an awkward eye stare from other shoppers or from the cashier at the cash register. The most common method is to purchase additional items that are not in any way embarrassing or that could affect your public identity in a negative manner.

Balancing the Basket: The Role of Shopping Basket Composition in Embarrassment
Sean Blair and Neal J. Roese
Journal of Consumer Research , Vol. 40, No. 4 (December 2013), pp. 676-691
Article DOI: 10.1086/671761
Article Stable URL: http://www.jstor.org/stable/10.1086/671761

Monday, November 18, 2013

The Effect of Emotions on Consumer Behavior

Patti Williams analyzes how consumers with different visual and emotional perspectives handle consumer situations. Williams mentions that research has shown that loneliness is linked to materialism, which causes people to reduce their social relationships. These consumers place a high value on material possessions and relate those possessions to a measure of success or a confirmation of happiness, but ultimately, it actually causes them to feel lonelier. Essentially, the consumers attempt to fill an emotional void with a material purchase, but they soon realize this is not possible. The research was based on 2,500 consumers over a 6 year time span and focuses on how materialism and loneliness is linked and is a vicious cycle. 

Williams also references different studies, one explaining that nostalgia encourages charitable behavior and intentions. This is because when someone feels nostalgia it creates a sense of empathy towards others that are feeling stressed or not as well off. Another study states that consumers want to be happy and many marketing departments are trying very hard to appeal to the consumer’s pursuit for happiness. Marketers feel that if they can reach that side of the consumer they can become more attractive. Unfortunately, the results of six studies explain that what happiness means to each consumer varies, and consumers’ choices reflect those differences. Consumers define happiness as feeling excited or it could be feelings of calmness. In other words, there is no universal meaning for happiness, so it makes it difficult for marketers to try and appeal to all consumers. 

I agree that consumers who long for materialistic possessions always feel like they are missing something in their life and they feel lonely. Because of this sense of loneliness, they go out and attach themselves to materialistic items in order to fulfill their feelings of loneliness. Furthermore, in instances when people are more emotionally attached and experience a sort of nostalgia, they will find a way to convince themselves to possess a charitable behavior. Consumers definitely want to be happy when they go shopping and they want to feel fulfilled after they shop. Marketing departments will  try to attach themselves to the consumer’s pursuit of happiness and attempt to convince the consumer to become materialistic and purchase their product. Many times the marketing department will not be able to convince a consumer to purchase a product, but at times, the consumer might be in a good mood and purchase something without the marketer even having to do anything. This is just the way it works.

Emotions and Consumer Behavior
Author(s): Patti Williams
Source: Journal of Consumer Research, (-Not available-), p. 000 Published by:
The University of Chicago Press
Stable URL: http://www.jstor.org/stable/10.1086/674429 .
Accessed: 19/11/2013 01:08 

Negotiating vs Bidding

Consumers are faced with decisions on a daily basis, they must decide which brand of cereal, type of sports drinks, and coffee brand to purchase. Most of these decisions are minor and not much thought is put into the decision-making process. However, every once in a while consumers must make an important decision that requires research and fact finding. Some of the biggest decisions that most consumers will have to face are purchasing a home, buying a vehicle, and investing for retirement. These decisions are difficult because most people will only make them a few times in their entire lifetime, yet they can have an immense impact on the decision-maker. In addition, people must also research decisions in which they must use a purchase-channel that they are not used to going through. Let's observe two common examples of such examples.

Before going into a negotiation transaction, the consumer should consider what their best alternative to a negotiated agreement will be. In other words, what will they do if they cannot agree to the terms of the individual with whom they are negotiating. Once the consumer is able to determine this, he should be able to choose a price point which is the absolute most or least acceptable amount, depending on the type of transaction. One common pitfall when negotiating for a new home, is that consumers tend to get attached to the house and offer more than they intended. The house buyer disregards the fact that there are other houses on the market and can sometimes offer more than he originally intended. Furthermore, when consumers are negotiating for a vehicle purchase, they should research car information as much as possible, beforehand. Nowadays, thousands of useful websites are available with information ranging from safety ratings to resale vehicle prices. As a consumer, you should do as much research as possible in order to be fully prepared to negotiate with a real estate agent or with a car salesman.

With the development of popular bidding websites, such as eBay, auctions have become a very popular way to purchase products. Consumers can purchase anything from shoes to houses in online auctions, or in live auctions as well. Bazerman explains that an important note to keep in mind is the value of the item which you are bidding on. The process of bidding on an item against other bidders can give many people a rush of adrenaline, but make sure that you do not overbid simply to win the auction. Many bidders get caught up in the excitement of outbidding other people and tend to pay more for an item than what it is worth.

Consumer Research for Consumers
Author(s): Max H. Bazerman
Source: Journal of Consumer Research, Vol. 27, No. 4 (March 2001), pp. 499-504 Published by:
The University of Chicago Press
Stable URL: http://www.jstor.org/stable/10.1086/319624 .
Accessed: 18/11/2013 21:08 

Expensive Taste

Prada, Louis Vuitton, and Chanel are just some examples of luxury brands commonly purchased by women every single day. These brands cost anywhere from a few hundred dollars to thousands of dollars. They are commonly found in upscale shopping malls, such as The Galleria in Houston and in Fifth Avenue shops in New York City, New York. The question that all of us men have is, "why are women spending so much money on these designer goods?"

According to Yajin Wang and Vladas Griskeviciu, women are using designer goods in order to show other women that their significant other is devoted to them. Contrary to popular belief, women are not purchasing expensive designer brands to attract men, but instead to deter women. This tactic is supposed to keep other women from approaching a man that is already taken. However, women are not the only gender that is spending large amounts of money on designer goods. Men are also purchasing luxury goods, instead, to become more attractive in finding a mate. Studies show that women are more attracted to men who flaunt their designer goods.The article focuses on studies that show how luxury goods are used mainly in relationships; whether it is to keep other women from “poaching” a man that is taken or for a man to feel like he has become more sexually appealing to a woman. As one can see, men and women purchase designer goods for different reasons, but with similar ideas in mind.

I do not believe that women should use luxury brands to keep other women away from their significant other. I feel that women buy designer goods to show it off to other women, because they want to feel a sense of status and superiority. In my opinion, women buy luxury brands to intimidate other women and to feel better about themselves. In addition, women like the product they are buying and know that other women will be the ones looking at their new handbag because most men will not notice these things. However, I do agree with Wang and Griskeviciu that men purchase luxury cars, watches and luxury products in order to become more attractive to a women. Women always look at men to represent power and have a status symbol. From what I have experienced from seeing friends and family, girls were more attracted to my friends when they had fancy and expensive items.

Conspicuous Consumption, Relationships, and Rivals: Women’s Luxury Products as Signals to Other Women
Yajin Wang and Vladas Griskevicius
Journal of Consumer Research ,  p. 000
Article Stable URL: http://www.jstor.org/stable/10.1086/673256

What's in a Name?

Consumers make purchasing decisions based on many different factors. For example, we have all bought a product because it is on sale, because we liked the packaging, or because we are curious to try it. However, have you ever chosen one product over another simply because the name of the product sounds male or female? Or have you chosen a product because of the letters in the name, regardless of price or appearance? Chances are that most of us have done just that.

Research shows that a woman is more likely to choose a product with a feminine name over a product with a male-sounding name, likewise with men. Marketers are aware of such statistics, and it is not uncommon to find products intended for men with names such as Axe, Mach 3, and Nivea Men. Would less men buy those exact same products if they were named Pam deodorant, Poise razors, and Soft skin lotion? I personally use those three products, but I might have been a bit reluctant if they had feminine-sounding names.

In addition, customers also make purchase decisions based on what letters are used in the product name. For example, men prefer products with names that use the vowels"o" and "u", while women choose products that use the vowels "e" and "i." In an experiment, both men and women were shown a list of word pairs that were potential product names. They were then told to choose which of the two names was a better choice for a new product. Time and time again, men had a tendency to choose product names such as "Tober" over "Tiber", and "Mogle" over "Migle." More times than not, females chose the opposite name, siding with product names that did not use the vowels "o" and "u". Furthermore, the results proved that women were more receptive to product names than men. This fact does not surprise me at all, because women tend to be more attentive to details, while men are likely to overlook small details. The findings concur that marketers should pay extra close attention when naming their products, especially if they are targeting women.

Researchers and marketers spend millions of dollars to try and convince you to choose their product over their competitors' products. Consumers have more choices now than ever, so companies need to get as much of an advantage as possible. The worst thing that they can do is have consumers overlook their products simply because of the product name they chose. Next time you are at a supermarket, pay close attention to products similar to the ones that you usually purchase. Why do you not choose that product? If the product had a different name would you consider it?

  1. Richard R. Klink
    Marketing Letters 
    Vol. 20, No. 3 (Sep., 2009), pp. 313-326
    Published by: Springer
    Stable URL: http://www.jstor.org/stable/27744268