Bar codes are cutting edge now…

Accidentally, I noticed a research which was done by Nielsen and Gartner (2010) revealed the recent tendency of the use of smart phones among Americans. The result confirmed that the possession of smart phones had overtaken feature phones by 2011 in America. Today, smart phones have become the essential in our life undoubtedly.

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Marketers also noticed this obvious trend of the application of high-tech, then, they tried to develop more business opportunities. I guess you are all familiar with this—2D bar code. Within these years, the use of mobile bar codes is accelerating rapidly in the field of advertising and marketing. This week, I will focus on the relationship between these mobile bar codes and consumer behavior.

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Actually, bar codes have been used in marketing for a long time. A (1D) UPC bar code which is used to uniquely identify a particular item can be seen in every product you bought. Comparing with UPC bar code, 2D bar codes are becoming popular in these years, and contain more information that could be obtained easily for mobile consumers. They are now widely used for advertising in magazines, on posters, newspapers or even product packaging and television screens.

In terms of the relationship between consumer behavior and 2D barcodes, an American organization (CMB) has done a survey and gained some useful information.

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It was found that curiosity and information gathering are top reasons for consumers to scan the bar code. Almost 50% of people scan the code just because they are curious what it would do. It sounds interesting, so I searched more information about curiosity. Litman and Spielberger (2003) defined curiosity as a “reaction to novel stimuli that involves feelings of interest or uncertainty and a desire for acquiring new knowledge and new sensory experience that motivates exploratory behavior”. It is believed that curiosity is an effective variable in learning, which can facilitate people to explore and study new knowledge (Boyle, 1989). Just as in the situation of facing the bar code, people are curious about its usage and what will happen after scan it, so the curiosity motivates them to do the scanning. The curiosity motives are also included in the five motivational dimensions proposed by Sheth (1975).

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In addition, about 43% of people are interested in using a smart phone to scan the bar code for the access to discounts or free items. Discounted or free items can motivate consumers’ purchasing behavior, for they reduce or eliminate the risk of buyer’s regret (Ahmetoglu et al., 2010). Once consumers spend something on the products, a risk has produced due to such expenditure. Hence, free things escape such risk as nothing is spent on the product, promoting people’ preference for free items. In my own experience, when I knew I could gain free ice-cream as long as I scan the bar code in a certain store, I tried without hesitation. So, you can see how attractive the bar code is in this situation. Lastly, words like “scan it” can usually be seen near a 2D bar code. This kind of word calls for consumers’ action, which also stimulates them to scan the bar code.

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The bar code above appears on Recipe.com’s magazine which aims at providing information about ingredients in a recipe for their readers. The emergence of bar code also has brought some benefits for merchandisers. Basically, it saves more space for the information and reduces cost. Moreover, the most valuable benefit comes from the business opportunities brought by the application of bar codes. Via the collection of the number of consumers’ scanning, merchandisers are able to gain a heat map. On this map, they will discover or promote their regional business plan through the analysis of the data. Lastly, scans of consumers offer the feedback on content to publishers. It can be discovered which part is the most popular or interesting in consumers’ mind by observing the frequency of scanning.

To sum up, merchandisers use 2D bar code to gain more profits from motivating consumers’ purchasing behavior. And consumers tend to scan these bar code out of curiosity or rewards. It is common to see 2D bar codes in the street now, who knows whether or not there will be a 3D bar code one day.

 

Ahmetoglu G. et al. (2010), “Pricing Practices: Their Effects on Consumer Behaviour and Welfare”, Mountainview Learning, March 2010.

Boyle, G.J. (1989). “Breadth-depth of state-trait curiosity? A factor analysis of state-trait curiosity and stateanxiety scales”, Personal and Individual Differences10, 175-183.

Litman, J.A., & Spielberger,C.D. (2004). “The measurement of perceptual curiosity”, Personality and Individual Differences, 36,
1127-1141.

J. N. Sheth (1975), “A Psychological Model of Travel Mode Selection,” Urbana, IL: Bureau of Economic and Business Research of the University of Illinois, Working Paper p.291, November.

Catch your eyes, awaken your memory

Christmas is coming! I really enjoy going shopping at this time, not only for the sake of the heavy discount, but in the meantime I can also have a good chance to appreciate these—fantastic store windows.

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Actually, I enjoy being a window shopper when I don’t have so much spare money or don’t have the willing to purchase something. It cannot be denied that store windows provide a broad imaginary space for us, and they tend to be considered as works of art now instead of just being a way to show the products. So, let’s explore the secret of store windows this week.

Park et al. (1986) put forward that “window display acts as a medium of advertising where its main attention is to persuade, through the presentation and display setting.” Moreover, Levy and Weitz (2007) categorized window displays into “visual merchandising”. Essentially, window displays aim at pleasing customers with persuasive characteristics and evoking their desire to enter the store through visual stimuli which gives consumers instant convey of information (Sen et al. 2002). Window displays perfectly create a scene showing how the products can be used, and visualize what it would be like for customers after their purchases. But under the pressure of competitors, I found window display is more likely to become a kind of packaging of stores, besides the function of attracting customers, it can also be regarded as a presentation of store’s spirit or characteristic. As Pegler (2006) said, the main purpose of window displays is not only to sell merchandise, but to create an image and idea that retailers want consumers to perceive.

How to create a distinctive window display? I have found an interesting experiment done by Yildirim et al. (2007), which focused on the effects of the store window type on consumers’ perception and shopping attitudes. They mainly compared the effect of flat store window with the one of arcade windows.

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And the results are shown below.

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It can be proved that consumers perceive flat windows as more positive than arcade windows. According to the analysis of Yildirim et al. (2007), it is because the freedom to browse a store without the pressure from a salesperson is important to the consumer. Therefore, flat windows should be a good choice for merchandisers.

Since holidays are always seen as a golden time for merchandisers, the holiday elements also have to be taken into consideration in a good window display. Just like the white snow, red color and Christmas trees, all these things seem to remind us of the Christmas’ coming. Besides creating the atmosphere of festival, a window display with a context setting also can arise consumers’ direct or indirect memories which may increase their arousal response (the degree of excitement experienced by a person in a service environment) (Ti 2009). I found it is quite true, because each time I see those displays, I can’t help myself memorizing the scene of last year’s Christmas. And if I happened to be there last year, I would definitely enter the store to see the changes or just for memory. Therefore, the theme of festivals in window display may bring both business opportunities and popularity for merchandisers.

A well-designed widow display can help sellers attract consumers from both visually and psychologically. As a consumer, since there are so many fancy window displays, shopping can be seen as a form of entertainment for me, and I will feel happy even just being a window shopper.

Reference

Park, C. W., Jaworski, B. J., & Macinnis, D. J. (1986). “Strategic Brand Concept – Image”, Journal of Marketing, 50(4), 135-145.

Levy, M., & Weitz, B. A. (2007). Retailing Management (6 ed.). New York: McGraw-Hill/Irwin.

Sen, S., Block, L., & Chandran, S. (2002). “Window displays and consumer shopping Decisions”, Journal of Retailing and Consumer Services , 9, 277-290.

Pegler, M. M. (2006). Visual merchandising and display(5 ed.). New York: Educator and Design consultant.

Yildirim K. et al. (2007). “The effects of the store window type on consumers’ perception and shopping attitudes through the use of digital pictures”, G. U. Journal of Science, 10 (2):p.33-40.

Ti C. (2009). “The Effects of Window Display Setting and Background Music on Consumers’ Mental Imagery, Arousal Response, Attitude, and Approach-Avoidance Behaviors”, Oregon State University

Custom-made, Just for you

Have you received such lettering chocolate? Or have you ever requested to letter some special words on your rings?

I think you must have heard or experienced this kind of service—custom-made. Many companies in various fields are now devoting to developing their custom-made service. This kind of service appeals to many customers who are seeking to unique products those are totally right for them.

In terms of custom-made, it can be linked with another word—personalized service, which has existed almost everywhere in our life now. It is often believed that cost of custom-made products should be higher than that of ordinary products, no matter from the aspect of designing or producing. So, there must be reasons why so many companies choose to provide custom-made service to their customers.

From the perspective of definition, “service personalization” is any creation or adjustment of a service to fit the individual requirements of a customer (Ball et al., 2006). And the range of it is so wide that even from a fast-food restaurant allowing a customer to choose sauces to a bank constructing a large custom loan package for a customer.

In order to do well in personalized customer services, firms need to put some key factors into practice, which includes:

  •   Knowing the customer
  •   Making customers feel important
  •   Listening to their word and feedbacks patiently
  •   Introducing alternatives for products
  •   Showing respect to customers
  •   Maintaining contact with customers

(Bashir et al., 2004)

Since companies pay so much attention on practicing personalized service, there must be some advantages for business. It is considered that personalized service helps businesses build profitable customer relationships and avoid losing out on potential sales for companies (Bashir et al., 2004).

Moreover, according to Ball et al. (2006)’s research, they argued that personalized service also improves loyalty through several ways. Firstly, properly-done personalization of a service can improve customer satisfaction, which is regarded as a premise of loyalty. As consumers, we all have experiences that if sellers can offer some different styles for us to choose, we will feel more satisfied than facing the one-size-fits-all style. Secondly, service personalization of companies can lead to a customers’ feeling of being respected. Customers are more likely to trust a company which shows great respect to them. Lastly, consumers tend to view products being produced from personalized services as more valuable and scarce than other products.

Directing at the effect of scarcity of products on purchasing behavior of customers, I found more evidence. Many researches has shown that the desire of consumers to purchase scarce apparel products are associated with conspicuous consumption, which is supported by uniqueness theory, reactance theory, and downward social comparison theory (Chatvijit, 2012). Many people associate products which are limited supplied with higher prices, which leads to purchasing scarce products becomes a way of showing wealth and high social status (Mittone and Savadori, 2009). From this perspective, we can know more about why customers love those custom-made products. It is mainly because of their uniqueness and just being designed for one customer.

In sum, these three factors, satisfaction, trust and scarcity, improve customer loyalty to a certain brand in the process of service personalization. Actually, in my opinion, it is a win-win situation for companies to apply personalized services. Not only customers gain satisfaction from these products, but companies also obtain profits and loyalty from customers. So, what’s your opinion?

Reference

Ball A.D. et al. (2006), “Service Personalization and Loyalty”, Journal of Services Marketing, 20:6(2006), pp.391-403.

Bashir S. et al. (2004), “Personalized Customer Service”, Available at: http://www.docstoc.com

Chatvijit S. (2012), “Exploring the effects of scarcity, impulse buying and product returning behavior in the fast fashion environment among female fashion conscious consumers”

Mittone L. and Savadori L. (2009), “The scarcity bias”, Applied Psychology: An International Review, 58(3), 453-468.

You buy, I buy!

Several days before, I happened to see a cup in the cabinet with much dust on it. Then I began to memorize under what circumstance I bought it. Actually, I do not need it at all, and I bought it just because all of my friends wanted to buy it and I followed them. Did you have such experience before? I found myself easily be pressured by the group to change my attitudes, beliefs or actions. So this week let’s talk about the conformist mentality.

Conformity occurs when an individual is influenced by society to alter their attitudes, beliefs, or actions to abide by their existing norms (Lascu and Zinkhan, 1999). There is a simple experiment to show the influence of group on an individual’s behavior.

From the video, it is obvious that the boy does not have the weird habit to eat chips with ice-cream. However, he changed his actions after he saw those girls had done it for several times. This kind of situation happened again when they cleaned the tray.

Another famous experiment which is also the first experiment about conformity was done by Solomon E. Asch (1955) on the willingness of people to conform. In this experiment, Asch demonstrated that individuals were highly susceptible to group pressure and were entirely dependent on the group for the norm and range in unstructured situation (Venkatesan, 1966).

Besides these, there are a number of experiments demonstrate that once with sufficient group pressure, it is possible to change the perception of an individual (Venkatesan, 1966).

Why group pressure can play such important part in consumer behavior? It is demonstrated that consumers are more willing to conform in the purchasing process when they are highly concerned with how others view their behavior (Bearden and Rose, 1990). Therefore, many buying actions come from a desire to identify with a membership or reference group (Venkatesan, 1966). Customers may choose to follow others sometimes because they want to seek friendship or do not want to look stupid. That is what I have experienced. When all of my friends bought that cup, I felt pressured and I do not want myself look like asocial. So I bought a cup which I may never use in order to maintain the accordance among us. In this kind of situation, people often want others to categorize them with the group they conform to.

Currently, many advertisers take advantage of this kind of link between conformity and consumer behavior to maximize a potential for a purchase. There are four main kinds of reference groups which are frequently appear in advertisements, including celebrities, experts, ordinary people and managers. Let’s watch an advertisement of P&G using ordinary people as main characters.

Lovely ad! “The hardest job in the world is the best job in the world.” In the ad, I think the most related scene with products of P&G is the action of hanging out clothes by mums. However, the image of these women conveys the information that they take good care of their children and cultivate them into great people. They can be the reference group of many other mums in the world, who want to be identified with such kind of group. Then, these women may be more likely to purchase products of P&G to show the conformity with those mums in the ad.

From this perspective, consumer conformity behavior can be used in marketing strategy for firms to stimulate consumers’ purchasing behavior. Moreover, there are researches shown that customers also prefer to maintain a feeling of independence while they are conforming to the group norm (Venkatesan, 1966). This feeling of independence often performs through choosing different colors, sizes while buying the same product. Therefore, maybe it is better for producers make one product in different styles for our consumers.

 

Reference

Bearden W.O. and Rose R.L. (1990), “Attention to social comparison information: An individual difference factor affecting consumer conformity”, Journal of Consumer Research, 16, 461-471.

Lascu, D.N. and Zinkhan G. (1999), “Consumer conformity: review and applications for marketing theory and practice”, Journal of Marketing Theory and Practice, 8, 1-12.

M. Venkatesan (1966), “Experimental Study of Consumer Behavior Conformity and Independence”, Journal of Marketing Research, Vol. 3, No. 4, pp. 384-387.

Wake up and smell the pastry!

Few days before, I saw this new APP of Starbucks on the Internet, and it aroused my interest.

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Wake up and smell the pastry! After you download the ‘Good Morning’ APP of Starbucks, you may receive 50% discount on all breakfast items in any Starbucks store. Attractive, isn’t it? But please wait a moment; there are some rules you have to follow. The app includes an alarm clock and counter. Once a user wakes up, he or she has 60 minutes to reach a Starbucks branch and order breakfast. If they are late—-no discount.

This App is in use in China now. Considering that breakfast in Starbucks costs at least 15 RMB in China, which is much more expensive compared with Chinese traditional breakfast, this App sounds quite attractive. But, can you imagine that you will be associated with a brand almost from you wake up every day? Maybe we need to know something about brand association.

Brand associations are anything in a customer’s memory linked to a specific brand (Gladden and Funk, 2004). The ads below can show the strong brand association of McDonald.

Consumers might associate a brand with a particular attribute or feature, usage situation, product spokesperson, or logo (John et al., 2012), such as the big yellow M and the APP of Starbucks. In order to organize such strong association network, firms are suggested to obtain brand map first.

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From the brand map of McDonald above, we can find that it not only identifies important brand associations but also conveys how these associations are linked to the brand and to one another. The brand map covers several key points connected directly to McDonald’s brand, i.e. ‘service’ & ‘value’, which are closely tied to brand meaning (John et al., 2012). With these key points, firms can make its brand meaning, value and targets clear, then, it will be easy for them to build strong association with customers.

Nowadays, we pay much attention to uniqueness of brands. What characteristic a certain brand has while others do not have can be the key factor in brand association. For example, Dove catches the concept of adding “one quarter moisturizing cream” into its soaps, which makes customers associate Dove with “never dry the skin”. This is what Dove wants to convey to customers, and also is its own specialty of products. Firms strengthen the relationship between the brand with a particular category, product attribute, customer benefit, or usage situation to build their brands (Farquhar and Herr, 1993).

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I am unsure whether long-term brand association will directly lead to brand loyalty or not, but there are actually some researches have shown the link between brand association and brand loyalty. According to Gladden and Funk (2004)’s research on professional sport team brand, it was found that three of eight association dimensions were classified as significant predictors of brand loyalty, which including tradition, product delivery and star player. It demonstrated that in order to foster brand loyalty among sport fans, sport team should build association with customers from these three aspects. Therefore, we can believe that in other fields, firms may also use brand association as a tool to gain loyal customers.

The marketing strategy of Starbucks may be useful in making such long-term association. People may be used to having breakfast in Starbucks after some time. If they also happen to appreciate the brand and the taste, then they will be loyal to Starbucks.

Are you being tied to some certain brands now? : )

 

Reference

Farquhar P.H. and Herr P.M. (1993), “The Dual Structure of Brand Association”, Brand Equity and Advertising: Advertising’s Role in Building Strong Brands, pp.263-275

Gladden J.M. and Funk D.C. (2004), “Professional Sport: Examine the Link between Brand Association and Brand Loyalty”, The Business of Sports, pp.194-197

John D.R. et al. (2006), “A Methodology for Identifying Brand Association Networks”, Journal of Marketing Research, Vol. 43, No. 4 (Nov., 2006), pp. 549-563

IKEA experience

This is a brand I prefer a lot—-IKEA, which is one of the largest retailers in the world. I think you must have heard of it before. If you are not so familiar with it, let’s watch some of its advertisements to know something about IKEA.

http://www.youtube.com/watch?v=Z7vXP3tHzhA

http://www.youtube.com/watch?v=fFHRAuvjOtQ

http://www.youtube.com/watch?v=CccMsV8YJcE 

What is your feeling after watching these? We may find that some specialists of IKEA are expressed through these advertisements, which contains comfort, low prices, convenience and most important—-experience of family. IKEA have managed to make their products and services more popular not only depend on prices but through creating a unique shopping experience for customers (Rebecka & Mirela, 2006). Everything in IKEA is available for customers to feel by themselves, and there are always places for children to play and for families to have a break. When I went into IKEA, I just felt in my own home.

Undoubtedly, this kind of “IKEA experience” has attracted many people. Why IKEA can be so successful? What it provides for customers is not only products in good quality and low prices, but also pleasurable customer experience. The shopping environment which IKEA has built for customers can be the key to its success.

Researchers found that many customers make a decision regarding where to shopping depending on their attitude toward the shopping center environment and the entertaining shopping experience. Shopping motives are grouped into three categories: product-oriented, experiential and a combination of product and experiential (Ibrahim, 2002). From this perspective, IKEA provides a price advantage over other competitors, and there are always new and creative products of good quality frequently. Moreover, all products in IKEA are placed in furnished room, which let customers feel in a real house and may give them much inspiration sometimes. These can stimulate both customers with product-oriented motives and customers with experiential motives. 

According to the research of Hu & Jasper (2006), nowadays, customers seek to satisfy a social need when shopping, and visits are often planned in advance and done accompanied by friends or families. Therefore, stores are serving not only for purchasing goods, but for socializing. In this aspect, the access to restaurants and coffee-shops in IKEA provides us with social activities in combination with shopping experience. It makes customers know that a basic need also can be satisfied at the shopping place (Rebecka & Mirela, 2006). Also, shopping at a retailer like IKEA may increase the social interaction between people since there are so many customers shopping at the same time. These factors satisfy the social need of people, which leaves a good impression on customers.

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If you ask me why I prefer IKEA to other brands, I will tell you because it brings me the feeling of home. Just like it is shown in the cat ads, everything in IKEA is placed and decorated like a real home. During your shopping in it, you can even lie on the bed to feel it. I think all these may lead to positive mood of customers, which can promote the purchasing behavior according to many researches on emotions. Customers will have both opinions and feelings toward certain stores that will influence their perceptions (Oxenfeldt, 1974).

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Although IKEA still has some disadvantages, such as time consuming or not easy to find products, it really has impressed a lot of consumers. If you haven’t any shopping experience in IKEA, go and try it! : )

Buy separately or buy together?

Suppose you go into a McDonald, facing with the menu, would you like to buy what you want separately or just buy a meal?

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In my experience, even sometimes I do not want the French fries, but I will still buy a meal with it instead of buying hamburger and drink separately. Also, there is a research finding that when bundling items together, consumers purchase items that they would not ordinarily purchase if the items were only available individually (Stremersch and Tellis 2002). Why do we tend to choose such bundled products? Now, let’s see the influence of bundling sale in our life.

You can know some basic information about bundling from here, which includes pure-bundling and mixed-bundling.

Why do retailers choose to bundle goods? There can be two main reasons for this marketing strategy. For some retailers, such as supermarkets, choosing to bundle goods can help them to save costs. It will be cheaper to packaging and inventory goods than carrying them separately. In addition, considering the competitive strategy, bundled products may provide more marketing opportunities to enhance profits. It can be found easily that sellers love to bundle successful products with a newer or less successful product to increase sales. In McDonald, you may notice that new product is often included in a popular kind of meal so that more people can try it.

When talking about retailers, money always comes first, but why do consumers choose to purchase bundled products? Firstly, bundled products usually meet customers’ demand. And many bundles are sold at a discount relative to the prices of the individual items that make up the bundle (Sharpe & Staelin, 2010). Just like you enter the McDonald for lunch, most time you need a burger and a drink. However, after you compare the price of meal with the prices of individual items, you are more likely to buy a meal containing fries instead of purchasing burger and drink separately at the similar price. This can be considered as the pre-purchase evaluation of alternatives in the process of consumer decision making. Secondly, sellers “featured” the information of bundled products, which can lead to increased sales even no change in prices (Inman, McAlister, & Hoyer, 1990).

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The strategy of bundling sale may result in the misperception of consumers. It is common that we overestimate the value and use of products under the situation of bundling sale (Oren Bar-Gill, 2006). When you buy a meal from McDonald, do you really need fries? Or do you really want to try the new product? Perhaps you buy them just because they are bundled with what you want to eat. There is a question: how many people have ever bought the one-year subscription of some kind of health club? Actually, have you made so many visits to these health clubs as you expected? The overestimation of use may also result in sellers’ increasing offering of bundling sales.

Nowadays, bundles can be seen everywhere. All the reasons above will trigger bundling sales. As a consumer, you need to think it carefully before your purchase. Buy separately or buy together?

 

Reference:

Stremersch, Stefan and Gerard J. Tellis (2002), “Strategic Bundling of Products and Prices: A New Synthesis for Marketing,” Journal of Marketing, 66 (January), 55–72.

Kathryn M. Sharpe and Richard Staelin (2010), “Consumption Effects of Bundling: Consumer Perceptions, Firm Actions, and Public Policy Implications,” Journal of Public Policy & Marketing, Vol. 29 (2) Fall 2010, 170–188.

Inman, J. Jeffrey, Leigh McAlister, and Wayne D. Hoyer (1990), “Promotion Signal: Proxy for a Price Cut?” Journal of Consumer Research, 17 (June), 74–81.

Oren Bar-Gill (2006), “Bundling and Consumer Misperception,” American Law & Economics Association Annual Meetings, Year 2006, 52.