Blog entries tagged Consumer Behavior

The Comfort Food Fallacy and its Implications

Rajan Sambandam — Wed, 18 Aug 2010 14:37:13 +0100

During times of upheaval do people naturally choose what is familiar or don’t they? The notion of “comfort food” seems to imply that when faced with trying situations people take comfort in certain old favorites that, well, comfort them. This is conventional wisdom and as we know researchers like to question said wisdom. That is what Stacy Wood set out to do and her findings offer interesting implications for marketers.&Read More...

The Art of Choosing

Rajan Sambandam — Wed, 07 Jul 2010 14:26:59 +0100

Several popular books have appeared over the last few years on topics related to consumers, behavior, psychology and economics. Perhaps the most popular are the ones by Malcolm Gladwell. While most use academic research liberally to make their points, relatively few have actually been written by an academic. The reasons are twofold. One, you need an academic who has done sufficient research in an area that is worthy and of interest to theRead More...

Mindful and Heartfelt Choices

Rajan Sambandam — Wed, 05 May 2010 17:39:06 +0100

How do you make choices in your life? Even simple ones like chocolate cake or fruit salad for a snack? Are you completely rational about the process, calculating the costs and benefits properly before choosing (also known as the cognitive approach)? Or are you more likely to go by feel, allowing your emotions to guide the choice (the affective approach)? Traditionally, researchers have favored the rational model, but more recently the emotionaRead More...

I Won't Have What She's Having

Rajan Sambandam — Mon, 07 Dec 2009 16:54:45 +0100

See if this sounds familiar. You and three other friends have gone to a nice restaurant for dinner. The waiter passes the menus around and you are eyeing the pork chops in some kind of fancy glazed sauce. The lamb chops sound nice too, but your preference is clearly for the pork chops. The waiter is going around the table taking orders. Your good friend who is ordering just before you goes for the pork chops. You hear that and decide to order tRead More...

Pennies and Pounds: The Denomination Effect and the What-the-Hell Effect

Rajan Sambandam — Wed, 30 Sep 2009 13:32:53 +0100

I know what you are thinking. This sounds like a joke, but it is not. There really is a What-The-Hell Effect and we will get to it in a moment. First let’s talk about the Denomination Effect. Let’s say you are leaving home and want to carry some cash with you. You have the choice of either taking a $20 bill or $20 in smaller denominations. Should this make any real difference to how much you are likely to spend? After all $20 is $20Read More...

Is $2.99 the same as $3.00?

Rajan Sambandam — Thu, 20 Aug 2009 18:37:52 +0100

How often do we as consumers see “just below” retail prices such as $2.99 or $29.99 or $299.99? All the time, right? It seems like we rarely ever see “round prices” for anything. The obvious reason why retailers and others do it is because of the belief that the left digit dominates and people are likely to see say, $2.99 as being significantly more than a penny less than $3.00. There are two issues here. The first is whRead More...

Pizza: Round or Square?

Rajan Sambandam — Mon, 03 Aug 2009 13:57:23 +0100

Let’s say you are following your dream to kick your day job and start a pizza joint. Many consequential decisions need to be made, but one that will certainly affect your production and display process will be the shape of the pizza: round or square? You might have personal preferences, but how will your customers see it? Given the same size, which shape will be seen as a better deal? Questions on package shapes often arise for consumer gRead More...

Trouble With Numbers

Rajan Sambandam — Fri, 22 May 2009 00:00:00 +0100

A common experience when shopping is to see price discounts expressed in percentage terms. "All items are 25% off". That's easy enough to understand. How about situations where you see signs that say "Take a further 15% off at the register"? This is where complications arise. If an item costs $100 and you see these two signs what do you think is the final discounted price of the item? Multiple percentage changes are often used by stores and for good reason. Recent research shows that consumerRead More...

Circles, Squares and Choice

Rajan Sambandam — Tue, 21 Apr 2009 00:00:00 +0100

Can simple shapes like circles, squares and triangles affect consumer choice? In particular, will exposure to simple shape arrays influence how people buy? Simple shape arrays are of the form OOOOΔOO or the form OOOOOOO. The former is called a uniqueness array as there is one shape that is unique and the latter is called a homogeneity (or uniformity) array as all the shapes are the same. Another type of array called a variety array looks like OΔOOΠΔOΠ. So they are quite innocuous. The questioRead More...

The Benefits of Customers Choosing Firms

Rajan Sambandam — Tue, 07 Apr 2009 00:00:00 +0100

Much as it is with people, there are two ways firms and customers can begin a relationship: one of the two parties can initiate the relationship. With people, who initiates the relationship may have no bearing on the outcome of the relationship (at least none that I know of). With firms and customers it really does make a difference says Paul Dholakia, a researcher at Rice University. It happens at least from the firm's point of view, because of the different behavior exhibited by customers wRead More...

License to Thrill

Rajan Sambandam — Sun, 01 Mar 2009 01:00:00 +0100

It is generally accepted that purchasing luxury products (ones that provide more pleasure or thrill than utility) is associated with at least some feelings of guilt. This makes it more difficult for manufacturers of products such as expensive cars and designer jeans to sell them, as consumers may have negative feelings and find it harder to justify the purchase. But is this still the case if purchase context is taken into account? Many real world purchase decisions are not made in isolation. Read More...

The Shopping Momentum Effect

Rajan Sambandam — Fri, 09 Jan 2009 01:00:00 +0100

Newton's first law of physics states that there is an inertial quality to bodies: those in motion tend to remain so, while those at rest do so too, unless there are external forces. Is it possible that humans exhibit some version of this? Habits are one example, with bad ones being hard to stop and good ones hard to start (at least for me). Researchers have recently shown that there is a shopping momentum effect too, whereby a consumer can't help buying more once an initial purchase has been Read More...

Of Tightwads and Spendthrifts

Rajan Sambandam — Sat, 15 Nov 2008 01:00:00 +0100

Do you spend money a little too easily or does it hurt to spend at all? Do you wonder if you are the only one or if other people have the same problem too? Does your gender, age or income have anything to do with whether you are a tightwad or a spendthrift? What effect do marketing offers have on your tendency to hand over the cash, or for that matter, your credit card? Recent research shows that tightwads and spendthrifts do exist and are quite different in these behaviors.

Jeopardy! Explains Gender Differences

Rajan Sambandam — Tue, 21 Oct 2008 00:00:00 +0100

OK, so Jeopardy! cannot possibly explain all the differences between the genders, but it helps quite a bit in understanding financial risk taking because of its unique format. Researchers studying gender differences in risk taking have known that men and women are different in several ways. For example, in general men are more willing to take risks, single women allocate less wealth to risky assets compared to single men, women have lower risk tolerance on health and retirement issues, women Read More...

Babyface CEOs - Good or Bad?

Rajan Sambandam — Sun, 07 Sep 2008 00:00:00 +0100

Do you form judgments of others based on how they look? Very likely. These judgments are not just about commonly understood features such as skin color, but also about more subtle ones like the shape of a person's face. Research has shown that babyfaced people are seen as kinder, warmer and physically weaker than maturefaced people, as well as more honest and naive. Given this, are there consequences for a company that has a babyface CEO (or spokesperson) in a time of crisis? Will the shape oRead More...

More or Less?

Rajan Sambandam — Sat, 23 Aug 2008 00:00:00 +0100

Let's say you are a cell phone manufacturer and you have to make a decision about a new phone. Your clever engineers have developed several new features that could make your phone much more distinctive in the market. What do you do? Do you put as many features as you can into one phone, or do you introduce several phones, each with a different set of features? Researchers at the University of Maryland asked this question and conducted a series of experiments to answer it. Surprisingly, their coRead More...

What You See is Not What You Drink

Rajan Sambandam — Sun, 20 Jul 2008 00:00:00 +0100

In a series of classic studies done in the 1960's, the Swiss developmental psychologist Jean Piaget showed how children can misperceive volume. When colored liquid was poured from a taller cylinder to a shorter wider cylinder, they thought the volume of liquid had decreased. These primary school children were using only the height of the container when making volume judgments and were hence making mistakes. Ah, you say, they are children and are naive enough not to understand that more than hRead More...