Welcome visitor you can log in or create an account

800.275.2827

Consumer Insights. Market Innovation.

blog-page
Rajan Sambandam

Rajan Sambandam

Chief Research Officer

As I sat down to write I realized that this is not a simple question. Consider the conventional meaning of necessities (defined as must-haves) and luxuries (defined as nice-to-haves). Which category market research falls into may depend on the eye of the beholder.

Researchers (or more accurately research sellers) may want to think of themselves as producing necessities rather than luxuries. But in the consumer world necessities are also generally commodities and often sold based on price. Researchers of course want to be seen as producing something valuable, something that is worth a premium -- in other words, a luxury.  So, which is it?

Now let's look at it from a research buyer's perspective. The buyer may think of research as a necessity, something that is indispensible for making good business decisions. But in keeping with the popular perception of necessities, perhaps they feel that more than one company can provide it and are hence unwilling to pay much of a premium for it. This view would support the many research sellers who complain about the commoditization of research.

center 4 neural decision makingRecently I was invited to attend a neuroscience conference at Temple University in Philadelphia, organized by their Center for Neural Decision Making, along with MIT and the University of Michigan. It turned out to be a very interesting experience with excellent speakers, great interactions and a terrific panel discussion. Some highlights:

  • Michael Norton of Harvard spoke with humor about the sensitive topic of racial paralysis. This is the tendency of people to refrain from making any decisions when faced with a situation where they could potentially be perceived as racist. His approach used data from experiments, surveys and neural imaging, a nice way to triangulate the results.
Tagged in: Neuroscience

Why MasterCard Ads Are Priceless

Posted by on in Advertising

You remember the MasterCard "Priceless" ad campaign, don't you? It first ran during the 1997 World Series.

"Two tickets: $28. Two hot dogs, two popcorns, two sodas: $18. One autographed baseball: $45. Real conversation with 11 year old son: Priceless."

It was an ad campaign that was so successful that it helped MasterCard move from a distant second to near parity with Visa. The question is, why? What was it about that ad that was so powerful, asked researchers Jeffrey LoewensteinRaj Raghunathan and Chip Heath  (who is incidentally a co-author of the best seller Made to Stick). What they found holds lessons for companies looking to create successful ads.

Tagged in: Advertising

Companies across a wide range of industries focus on improving customer satisfaction as a way of increasing loyalty. Still, there is evidence to show that increasing customer satisfaction does not always result in increases in repurchase. So if your company happens to be in one of those situations you could be wasting money trying to improve customer satisfaction - money that could be usefully spent on something else. What defines "those situations" where the relationship between customer satisfaction and repurchase is sketchy? In a recent issue of the Journal of Marketing, three academic researchers Glenn Voss, Andrea Godfrey and Kathleen Seiders, propose that the kind of product category (luxury or necessity) plays a crucial role in this relationship along with customer, relationship and market characteristics.

The Optimism Discount

Posted by on in Consumer Behavior

half_full smallA recent Time Magazine article talks about the Optimism Bias -- the phenomenon of people being eternally optimistic about the future. This can be shown in various ways including how people wildly overestimate things like personal life expectancy, marriage solvency, career prospects, etc. In this context "bias" doesn't mean something inherently bad. There is good reason to have an Optimism Bias as it leads to concrete positive outcomes like better health and longer life, not to mention inspiring us and making life generally better.

Tagged in: Consumer Behavior

Predictably Irrational

Posted by on in Choice

A few weeks back we decided to get a new TV. As a researcher I started doing my due diligence checking out a variety of sources. Our old TV had been around since the early days of HD and was a CRT to boot (though still HD - c'mon what do you think I am!). So I was really looking forward to buying something that weighed considerably less, took up a lot less space and looked a lot cooler. It was fun going through the various attributes - 760/1080, LCD/Plasma, LED backlighting, HDMI connections, Internet Apps, 3D! It's been a while since my engineering days when I studied the innards of TVs, and the technology has certainly evolved remarkably since then.

I narrowed my choices down to a few brands primarily based on the screen size that would fit the space, and really started focusing on a Vizio  model. As you may know, Vizio has become a real player over the last few years. Initially they competed on price, but more recently have made a splash with features and quality. Some of the reviews I saw online in fact, put Vizio near the top of the rankings. I was particularly taken by the Vizio Internet Apps (VIA) which makes it absurdly easy to get internet content directly on your TV. I was really looking forward to the Netflix app. Not being a current subscriber, the ability to stream so many movies simply and directly through my TV was huge. The price was very competitive too, so we decided to go with Vizio.

The purchase was made through Costco online and the TV arrived about a week later. After upgrading some accessories, I started connecting it. The process was very easy. The remote was simple and elegantly designed. Best of all it had a slide out QWERTY keyboard (a big hit with the kids) to access Facebook, Twitter, etc. The onscreen instructions for set-up were very easy to follow and the whole thing took very little time. Then we sat back to enjoy the content and that's when the trouble started.

The picture started shaking, froze and blanked out. Just for a few seconds. That's normal when connecting new devices, I assured everyone confidently. Then it happened again. And again. Uh oh!  When it didn't do any of this, the HD somehow became SD. I was getting very concerned, so I called Vizio's customer service. The rep tried a few things but nothing changed. He said they could send a repair person over "in 5 to 7 business days". Meanwhile I had unhappy kids at home and can't watch the Phillies or the NBA Finals. That did it. Off we went TV shopping again, but had decided to eliminate Vizio from our consideration set.

The rational part of me said the glitch in that one TV was very unlikely to be repeated again. Vizio has been tested by expert reviewers and gets high marks. The predictably irrational part said I would be a fool to buy the same TV again. Guess who won? So this time I bought a Panasonic from Best Buy after grilling the sales associate with endless questions. The TV worked beautifully right out of the box. It has the Internet apps I coveted, but the Vizio certainly had more features and flexibility. But no matter.

...
Tagged in: Choice

Bee a Good Researcher!

Posted by on in Market Research

bee_smallResearchers are sometimes described as busy bees but I had no idea that the opposite is literally true till I heard this NPR report on honey bees . Apparently they are wonderful market researchers!

Here's the back story. Cornell Professor Thomas Seeley is a biologist who studies swarm intelligence. Effectively he studies the idea that a group can be smarter than the individuals in the group. Replace "group" with "crowd" and of course the idea is familiar to us as the Wisdom of Crowds. But can such behavior really occur among animals too? Professor Seeley has spent 30 years studying bees and he thinks the answer is emphatically yes. That brings us to the bees-as-market-researchers hypothesis.

Tagged in: Market Research

Overthinking It

Posted by on in Choice

In his book on the neuroscience of decision making, How We Decide, Jonah Lehrer talks about the case of a patient who has damaged a part of his brain (specifically the orbitofrontal cortex) and is hence terminally unable to make any decisions. Every single decision, no matter how trivial, seems complicated to the point where it cannot be made. This is generally not a problem for most normal people, right? In fact, the accepted wisdom is that people are quite good at taking somewhat complicated decisions and simplifying them (in many cases rather efficiently) and moving on with their life.

Now there is new research from our friend Oded Netzer at Columbia and his colleagues Rom Schrift and Ran Kivetz that shows that not only do people simplify, but sometimes they also complicate the decision-making process unnecessarily. They studied this through a variety of experiments, many designed to rule out competing explanations. Let's talk about one of those to understand what they did.

Tagged in: Choice

Blame it on Phone Surveys

Posted by on in Market Research

This is my thesis and I don't have quantitative data to support it. I'm going more on experience than anything else, so feel free to disagree with me. The thesis is that the dominance of phone surveys through at least the last two decades of the 20th century has changed market researchers' thought patterns in ways we are not fully aware of. This has resulted in sub-optimal behavior when it comes to designing research studies. Let me explain a bit more.

The telephone is an aural medium which naturally has restrictions that a visual medium does not have. When you have to ask someone about the two Presidential candidates, aural media work fine. When you ask to rate their satisfaction with a product again it works fine. But what happens when you have to ask about the importance of various features in a new product? Since it is an aural medium, the number of ways of asking the question is very limited. The easiest way to do it is to provide one feature at a time and ask for a rating. But this does not allow any comparison between the features and certainly does not allow trade-off methods to be used.

Tagged in: Market Research

Can the Truth Wear Off?

Posted by on in Market Research

 

In a very interesting article in The New YorkerJonah Lehrer asks the question can truth Wear Off? So, what is “truth” and what is “wearing off”? In this case truth is that which has been proven by the scientific method (i.e.) experimentally. As the psychologist Jonathan Schooler discovered, experimental effects he had shown very clearly started disappearing into the dreaded land of non-significance over time. That is the “wearing off” part. And it wasn’t just Schooler. Others have seen similar phenomena where published studies when replicated over time have effectively lost their potency. This is a particularly troubling problem for medical science and is practically seen in the number of drugs that are retroactively pulled off the market. As the medical researcher John Ioannidis has shown, there can be substantial harm to society from wrong (but well publicized) results living in the memories of doctors who continue prescribing those drugs or treatments (hormone replacement therapy and daily low doses of aspirin) even when they have proven to be ineffective or harmful. So, the question is, how do effects disappear over time?

Tagged in: Market Research

Ads About Nothing (Relevant)

Posted by on in Advertising

They look beautiful on screen or on a page. Almost like watching a short, artsy film. But it is an ad and though you know who it is for, it doesn’t say anything about the positive attributes of the product. American Express is particularly good at this. Are such ads useful or a waste of money? Two of our friends at Yale, Dina Mayzlin and Jiwoong Shin investigated this phenomenon and came to some very interesting conclusions.

Tagged in: Advertising

Air Travel Trade-offs

Posted by on in Market Research

Doesn’t it seem like air travel has become more of a hassle recently compared to a few years (or a decade) back? Even leaving aside stricter security after 9/11 there appears to be more complaints about air travel these days. How much truth is there in these complaints? Let’s look at the possibilities, namely competition among carriers, new TSA rules and weather.

 

Tagged in: Consumer Behavior

When you go out to buy something how much importance do you place on the brand name? Not only does this vary from person to person but also from category to category. Yet the vast majority of brand related research has focused on understanding the importance of brand within categories, not across. That may be understandable from a brand manager’s perspective because he is in charge of just that brand. But while a company may sell a single brand a consumer makes purchase decisions across a spectrum of categories. The importance she places on a brand in a particular category is therefore contextual. Understanding this issue of Brand Relevance in Category (BRiC) and its implications is what three researchers set out to do in a large scale multi-product, multi-country study. Here’s what they did.

Tagged in: Brand

Yes, I admit it. This is a self-serving post. But when compelling research crosses one’s eyes one is forced to write a blog post. In this case the compelling research comes from Natalie Mizik under the intriguing title of “The Theory and Practice of Myopic Management”. How can I pass that up? In this research Natalie sets out to show that myopic management (i.e. cutting marketing and R&D expenditure for short term gain) is financially bad for the firm in the long run. She proves her main point but also makes a couple more so let’s take a look at what she has cooked up.

 

Tagged in: Market Research

You know them, right? The friends you log into Facebook to check out. They always have something interesting to share and you like to see what it is. That process is one way of measuring influence in social networks and a rather good one at that, according to recent research by Michael TrusovAnand Bodapati and Randy Bucklin. They set out to identify influencers in a social network and did so using some interesting data and analytics. Here’s the story.

Tagged in: Social Media

Putting Money and Mouth Together

Posted by on in Market Research

Ever heard of a Commitment Contract? No we are not talking about marriage. A commitment contract is one where you commit to doing something and sign a contract. If you don’t do what you committed to, the terms of the contract go into effect. The terms are set up in such a way that you could end up paying a penalty if you fail to honor the contract. In other words the incentives are aligned to elicit a specific behavior. The kicker is that you set up the contract and the penalty.

How to Make Better Ads

Posted by on in Advertising

When you leaf through a magazine what of advertisements make you stop? It is not an easy question to answer as so many variables are usually involved. To tackle this question a group of researchers used unique eye tracking data and innovative measures of visual complexity and were able to develop recommendations for making ads that are more attention-getting.

Tagged in: Advertising

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.

Tagged in: Consumer Behavior Food

Unknown Unknowns

Posted by on in Rajan Sambandam

Let’s pick a topic. Any topic. How much would you say you know on that topic? More than average? How much do you think you need to learn in order to become well-versed on that topic? Not a whole lot? You just may be experiencing what is known as the Dunning-Kruger Effect. It is a mental bias that seems to afflict people who are unskilled or not very knowledgeable. They routinely make poor decisions because their lack of competence itself denies them the ability to realize their lack of competence. It happens to a lot of us in certain areas like personal financial planning.

Tagged in: Psychology

The Art of Choosing

Posted by on in TRC Book Club

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 the general public and two, you need good writers for lay readers. That combination is hard to come by -- which makes The Art of Choosing an unusual and interesting book. It was written by Sheena Iyengar, a professor at Columbia University Business School and deals with a topic we are all familiar with – choice. She has spent a couple of decades studying this topic and is hence eminently suited to write on it. The fact that she is blind makes it almost awe inspiring to read.

Want to know more?

Give us a few details so we can discuss possible solutions.

Please provide your Name.
Please provide a valid Email.
Please provide your Phone.
Please provide your Comments.
Enter code below : Enter code below :
Please Enter Correct Captcha code
Our Phone Number is 1-800-275-2827
 Find TRC on facebook  Follow us on twitter  Find TRC on LinkedIn

Our Clients