Category: Consumer Behavior

 An Oxford University study suggests that people living in countries with 'free market' regimes are more likely to become obese due to the stress of being exposed to economic insecurity.

The researchers believe that the stress of living in a competitive social system without a strong welfare state could be causing people to overeat. According to the study published in the latest issue of the journal Economics and Human Biology, Americans and Britons are much more likely to be obese than Norwegians and Swedes.

Oxford researchers compared 11 affluent countries and found that those with a liberal market regime (strong market incentives and relatively weak welfare states) experienced one-third more obesity on average. Their analysis of nearly 100 surveys, carried out between 1994 and 2004, revealed that the highest prevalence of obesity reported in a single survey was in the United States where one-third of the population was classed as obese. By contrast, Norway had the lowest prevalence of obesity in a single survey at just five per cent.

The study compared 'market-liberal' countries (United States, Britain, Canada and Australia) with seven relatively affluent European countries that have systems that traditionally offer stronger social protection (Finland, France, Germany, Italy, Norway, Spain and Sweden). It concludes that economic security plays a significant role in determining levels of obesity. Countries with higher levels of job and income security were associated with lower levels of obesity.

In the past, the rise of obesity in affluent societies has frequently been attributed to the ready supply of cheap, accessible, high-energy, pre-processed food in fast food outlets and supermarkets. This cause is known by researchers as the 'fast food shock'. Oxford researchers measured the impact of fast food by using a price index, constructed by The Economist magazine*, showing the international variation in the cost of the McDonald's Big Mac hamburger. They found that the availability of fast food may not be as significant as previously thought, as they calculated it had half as much an effect on the prevalence of obesity as the effects of economic insecurity.

Lead author Professor Avner Offer, Chichele Professor of Economic History at the University of Oxford, said: 'Policies to reduce levels of obesity tend to focus on encouraging people to look after themselves but this study suggests that obesity has larger social causes. The onset and increase of large-scale obesity began during the 1980s, and coincided with the rise of market-liberalism in the English-speaking countries.

'It may be that the economic benefits of flexible and open markets come at a price to personal and public health which is rarely taken into account. Basically, our hypothesis is that market-liberal reforms have stimulated competition in both the work environment and in what we consume, and this has undermined personal stability and security.'

The Oxford research team based this study on observations in academic literature about animal behaviour. Animals, both in captivity and in the wild, have been found to increase their food intake when they are faced with uncertainty about their future food supply.

These latest findings suggest that obesity in affluent societies is a response to the stress of economic insecurity. The researchers found that the effects of economic security were considerably greater in causing obesity than other factors measured (the existence of a market-liberal regime; inequality, the price of fast food, and the passage of time).

'Obesity under affluence varies by welfare regimes: The effect of fast food, insecurity, and inequality' is by Avner Offer, Rachel Pechey and Stanley Ulijaszek.

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Journal Reference:

1. Avner Offer, Rachel Pechey, Stanley Ulijaszek. Obesity under affluence varies by welfare regimes: The effect of fast food, insecurity, and inequality. Economics & Human Biology, 2010; 8 (3): 297 DOI: 10.1016/j.ehb.2010.07.002

— After a rough day at the office, you might opt for a convenient, pretty restaurant over one with a top-notch menu, according to a new study in the Journal of Consumer Research.

"If you've had a tough day at work, how will that affect the decisions you make, like where to eat, what to do, and what to buy?" ask authors Echo Wen Wan (University of Hong Kong) and Nidhi Agrawal (Northwestern University). Their research revealed that people who are tired from a demanding task will tend to pass up the most desirable choices and go for options that seem to have attractive low-level features.

"After a depleting task people were more likely to pass up the option that was most desirable, widest in scope, and best in primary traits and instead chose the option with lower-level features," the authors write.

For example, the authors predict that after a difficult flight, a consumer would most likely choose a restaurant with a great view over one with excellent food. And someone who just finished a big presentation would opt for a convenient concert over one by a favorite band. They discovered that participants who felt depleted after completing a self-control task chose easy jobs over interesting ones and weekly calendars over months ones — demonstrating a preference for short-term value.

"When we feel fresh it's relatively easy for us to focus on the primary features of a product, consider the outcome of a choice, and value the long-term benefits of an action," the authors explain. "However when we feel depleted from exerting self-control, we start to attend to the non-central minor aspects, think about how feasible it is to engage in the choice, and sometimes emphasize short-term rewards."

The authors also found they could prompt participants to think at higher levels. In one experiment, depleted individuals chose an art exhibit that was convenient. But when they were primed to think at a higher level, they chose the exhibit by an artist they liked.

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Journal Reference:

1. Echo Wen Wan and Nidhi Agrawal. Carry-Over Effects of Self-Control on Decision-Making: A Construal Level Perspective. Journal of Consumer Research:, August 2011 [link]

 A new study in the Journal of Consumer Research shows that women are better than men at figuring out unusual products when they're among competing items.

"A lot of times when we look at how consumers respond to innovative change in a product's physical form, we fail to consider that the context where they see the product plays a major role in how they evaluate and interpret it," write authors Theodore J. Noseworthy, June Cotte, and Seung Hwan (Mark) Lee (all University of Western Ontario).

The researchers examined consumer reactions to innovative products, like a car without visible wheels or a soft drink packaged in a strange way. In their experiments, some participants viewed advertisements for normal-looking products, whereas others saw extremely unusual products. Sometimes the ads for the unusual items were alongside similar products and other times they were alongside completely unrelated products.

"Our results show that women are better than men at figuring out an extremely unusual product, as long as the product is promoted among competing products," the authors write. For example, female participants understood that a car without visible wheels was a car if the ad appeared in a magazine with other car ads, while men had trouble.

Perhaps not surprisingly, once the women figured out what the products were, they liked them more. But here's the catch: When women used the other ads to identify the unusual products, they had trouble accurately remembering the claims within the ads. "Women, as compared to men, are more likely to mix in claims from ads for competing products when they are using those products to make sense of an unusual product," the authors write. This confusion only happened with the female participants.

"There are dramatic differences in how males and females process the advertising context," the authors write. "Consumers — female consumers in particular — may be able to understand greater levels of visual incongruity than traditionally thought. For example, women in a cell-phone store should be better able to use store context to understand a radical new cell phone than would women in an electronics store."

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Journal Reference:

1. Theodore J. Noseworthy, June Cotte, and Seung Hwan (Mark) Lee. The Effects of Ad Context and Gender on the Identification of Visually Incongruent Products. Journal of Consumer Research, August 2011

People feel closer to businesses and nonprofits that solicit their advice, but soliciting expectations can distance potential customers, according to a new study in the Journal of Consumer Research.

"Marketers and nonprofits alike regularly solicit input from customers or donors for myriad reasons, most notably to measure consumers' preferences, expectations, and satisfaction," write authors Wendy Liu (USCD) and David Gal (Northwestern University). Interactive media such as Facebook and Twitter are providing even greater opportunities for interaction with customers.

The researchers looked at whether providing input affected the customer's subsequent interactions with the organization. In experiments they found that participants expressed a greater likelihood that they would patronize a fitness center ("EcoGym") and a restaurant business (a healthy fast-casual restaurant called "Splash") after they provided advice to those organizations than when they were not asked for their input or after they were simply asked for their opinions of those organizations. "Relative to no input, soliciting advice tends to have an intimacy effect whereby the individual feels closer to the organization," the authors write.

On the other hand, soliciting expectations has the opposite effect, distancing the individual from the organization and diminishing their likelihood of donating to or purchasing from the organization. "Stating expectations tended to make consumers focus on themselves and their own needs, and that the organization existed merely to service their needs," the authors explain. "This perspective created a sense of distance between the participant and the organization, thereby reducing subsequent purchase."

The authors also found that when companies pay customers for advice, it does not increase purchase likelihood, as it shifts the customer's relationship to one based strictly on economic exchange. They also found that if consumers detect insincerity (companies merely asking advice to get them to donate or purchase) such efforts could backfire.

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Journal Reference:

1. Wendy Liu and David Gal. Bringing Us Together or Driving Us Apart: The Effect of Soliciting Consumer Input on Consumers' Propensity to Transact with an Organization. Journal of Consumer Research, August 2011

When we don't feel confident about our government, we choose indirect ways of showing support, like buying U.S. based products, according to a new study in the Journal of Consumer Research.

"Today, we can barely watch television for any length of time without hearing about verbal attacks on the government, or a given religion or education system," write authors Keisha M. Cutright (Duke University), Eugenia C. Wu (Cornell University), Jillian C. Banfield (University of Waterloo), Aaron C. Kay (Duke University), and Gavan J. Fitzsimons (Duke University).

The results suggest that consumers respond differently to threats to entities they depend upon. "We find that people are often quite motivated to defend their governments and other entities when threatened, but that their approaches differ a great deal depending on how confident they are in such entities," the authors write.

In a series of five studies, the researchers found that people who are not confident in their government respond to threatening attacks on it by choosing subtle ways of showing support. "They choose products based in the United States over those based in a foreign location," the authors write. "They are more likely to choose Nike over Adidas, Chevy over Toyota."

Individuals with high confidence in the government, on the other hand, do not distinguish between such choices. "They only show preferences for national products when such products make strong, explicit statements in support of their government," the authors explain. "For example they show a strong preference for Nike over Adidas if Nike is associated with a statement such as 'Love it or Get Out' (surrounding a U.S. flag)."

In times of threat, marketers may want to be clear about whether their targeted consumers can be characterized as having high or low levels of confidence in their socio-political systems. "While a simple push towards American-made products may be enticing for low-confidence individuals, it may be deemed ineffective as a means of defending the threatened system for high-confidence individuals," the authors conclude.

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Journal Reference:

1. Keisha M. Cutright, Eugenia C. Wu, Jillian C. Banfield, Aaron C. Kay, and Gavan J. Fitzsimons. When Your World Must Be Defended: Choosing Products to Justify the System. Journal of Consumer Research, June 2011 

The first letter of our childhood surname determines much about our consumer behavior as grownups, according to a new study in the Journal of Consumer Research.

Why are some people more likely than others to wait in line overnight to buy a just-released book or to queue up for the new iPad? "The tendency to act quickly to acquire items such as those above is related to the first letter of one's childhood surname," write authors Kurt A. Carlson (Georgetown University) and Jacqueline M. Conard (Belmont University).

The authors studied how quickly adults responded to opportunities to acquire items of value to them. They found that the later in the alphabet people's childhood surnames were, the faster those consumers responded to purchase opportunities. The "last-name effect" occurred when the items were real (basketball tickets, cash, and wine) or hypothetical (sale on a backpack).

The effect occurred only with childhood surnames, not names that had changed due to marriage. Children with last names that fall late in the alphabet are often at the end of lines or at the back of the class. "The idea holds that children develop time-dependent responses based on the treatment they receive," the authors explain. "In an effort to account for these inequities, children late in the alphabet will move quickly when last name isn't a factor; they will 'buy early.' Likewise, those with last names early in the alphabet will be so accustomed to being first that that individual opportunities to make a purchase won't matter very much; they will 'buy late.'"

"The last-name effect is especially important to retailers and salespeople because customer names are easy for marketers to obtain and because there are many decisions in which the decision is not whether to buy, but when to buy," the authors write.

Whether it's shopping at a clearance sale, choosing a seat to hear live music, or shopping for produce at a farmers' market, late alphabet consumers want to make sure they're the first in line.

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Journal Reference:

1. Kurt A. Carlson and Jacqueline M. Conard. The Last Name Effect: How Last Name Influences Acquisition Timing. Journal of Consumer Research, August 2011 

— The negative reaction to Starbucks' redesigned logo by the company's self-described most loyal customers may be attributable to the strong connection Starbucks' consumers feel toward the brand, according to research co-authored by a professor at Penn State's Smeal College of Business.

Karen Winterich, assistant professor of marketing at Smeal, and researchers Michael Walsh of West Virginia University and Vikas Mittal of Rice University recently examined how consumers react to logo redesigns. They found that consumers who are strongly committed to a brand tend to react more negatively toward new logos, while more casual customers typically view the redesigns as a positive development. Further, the negativity felt by the brand's best customers can spill over and cause them to have a lower attitude toward the brand.

Brands like Starbucks gain much of their strength from consumers who feel a personal connection to the brand. However, it's these same passionate brand fans who react negatively to logo changes, and in the case of Starbucks, took to social networking websites to express their negative feelings about the change.

"Most companies presume that their most precious customers — those having strong brand commitment — will be more accommodating to changes," the researchers write. "Our results show this is likely a mistaken assumption — one that can alienate the core, the most committed of a brand's customers."

To test their hypothesis, Winterich and her colleagues examined how 632 undergraduate students responded to logo redesigns for Adidas and New Balance athletic shoes. They had a professional graphic designer create two new versions of each brand's logo, one slightly modified from the original and the second one considerably more so. Each participant was surveyed about their brand commitment and attitude after viewing the original logo and then again after viewing one of the redesigns.

They found that brand attitudes decreased for those strongly committed to the brand and increased for the weakly committed. The researchers believe that committed brand enthusiasts view the logo changes as threatening to their relationship with the brand.

"Those with strong brand commitment will see the original brand logo — and the associations — as representing themselves and the integral relationship they have with the brand," the researchers write. "They are likely to view a change in the logo, which affects these associations, as threatening their self-brand connections and relationships. Consequently, such consumers will be negatively disposed to the logo change and likely to evaluate the logo negatively."

Winterich and her co-authors suggest that companies take a nuanced approach to logo redesign. They recommend soliciting input about the redesign from the brand's most committed consumers and perhaps even notifying them before the changes are revealed to the broader public. "Giving the strongly committed such a feeling of being an 'insider' may strengthen their self-brand connection and mitigate the potentially negative effects of logo redesign," they write.

Consumers may place a high value on information to predict their future health, and may be willing to pay out of pocket to get it. In a national survey conducted by researchers at Tufts Medical Center, roughly 76% of people indicated that they would take a hypothetical predictive test to find out if they will later develop Alzheimer's disease, breast or prostate cancer, or arthritis. On average, respondents were willing to pay $300 to $600, depending on the specific disease and the accuracy of the test.

Published online in the journal Health Economics, the study examined individuals' willingness to take and pay for hypothetical predictive laboratory tests in which there would be no direct treatment consequences. Overall, researchers found that in most situations, people were willing to pay for this 'value of knowing' — even if the tests were not perfectly accurate.

Responses to the survey varied according to information provided about the disease risk profile and the accuracy of the hypothetical test. Of the 1463 respondents, willingness to be tested was greatest for prostate cancer (87% of respondents), followed by breast cancer (81%), arthritis (79%), and Alzheimer's disease (72%). Average willingness to pay varied from roughly $300 for an arthritis test to $600 for a prostate cancer test.

"This study brings us a step closer to understanding people's preferences and motivations for wanting a diagnostic test, even if it has no bearing on subsequent medical treatment," says lead author Peter J. Neumann, ScD, director of the Center for the Evaluation of Value and Risk in Health at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center. "While we have to proceed cautiously in this area, given that tests have costs and risks as well as benefits, our study suggests that many people value information — both for its own sake and because they will adjust lifestyle and behavior choices accordingly."

The randomized, population-based internet survey presented participants with the option to take a hypothetical predictive blood test for one of the four diseases, understanding that the test would not be covered by insurance. Participants were asked how much they would be willing to pay for a test that could predict their disease. Some respondents were asked about a 'perfectly accurate' test, and others about an 'imperfect' one. They were also queried about their socioeconomic information, health status, risk attitudes and behaviors, and likely actions after receiving a positive test result.

The advancing field of in vitro diagnostics (IVDs) includes an increasing number of clinical laboratory tests that offer the hope of personalized screening to assess an individual's risk of developing certain diseases based on genetic markers found in blood or tissue samples.

According to Neumann, the growing use of predictive testing worldwide has resulted in increasing demands for evidence that demonstrates the value of such tests. Health technology assessment groups typically measure the utility of diagnostic tests in terms such as increased accuracy of test results, cost-effectiveness, or improved health outcomes for patients. But assessing the value of predictive testing may also require the use of new or different measures. In the Tufts Medical Center study, the researchers also found:

• Income and disease type impact willingness to pay. The amount of money patients were willing to pay out of pocket for tests increased with income levels, and was significantly higher for breast and prostate cancer and Alzheimer's disease than for arthritis.
• Gender, age, and education influence test participation. About 24% of individuals sampled elected not to take the predictive test. Generally, older respondents, women, those with a bachelor's or higher degree, and those with healthier behaviors were less inclined to undergo testing, even if it were free. Among those not wanting the test, major concerns expressed included the cost of the test, living with the knowledge of one's disease risk, and the lack of preventive measures.
• Test results may alter future behavior. When faced with positive test results, individuals indicated they would change certain aspects of their lives, such as spending more time with loved ones (51%), putting their finances in order (48%), or traveling more (31%).

"By taking into account all implications of these tests — including the risks, costs, potential cost offsets, and the value they have outside of medical outcomes — we can build better policies and make better decisions about coverage and reimbursement, so that we may more accurately reflect patient preferences and appropriate uses of societal resources," says Neumann.

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Journal Reference:

1. Peter J. Neumann, Joshua T. Cohen, James K. Hammitt, Thomas W. Concannon, Hannah R. Auerbach, ChiHui Fang, David M. Kent. Willingness-to-pay for predictive tests with no immediate treatment implications: a survey of US residents. Health Economics, 2010; DOI: 10.1002/hec.1704

— Most people like to play it safe when combining colors for an article of clothing or outfit, a new study suggests.

When consumers were asked to choose colors for seven different parts of an athletic shoe, they tended to pick identical or similar colors for nearly every element.

They usually avoided contrasting or even moderately different color combinations.

A red and yellow athletic shoe? Not going to happen. Blue and grey? That's more like it.

This is one of the first studies to show how consumers would choose to combine colors in a realistic shopping situation, said Xiaoyan Deng, lead author of the study and assistant professor of marketing at Ohio State University's Fisher College of Business.

The results support the theory that people like their color combinations to be relatively simple and coherent, rather than complex and distinct

"Most people like to match colors very closely," Deng said. "The further the distance between two colors, the less likely people are to choose them together."

However, there was one exception. A large minority of people chose to highlight a relatively small signature part of the shoe with a contrasting color far from the colors used in other elements.

Overall, though, the study showed that people prefer a simple design with few colors. While participants could choose from up to 16 colors for different parts of the shoe, the average person only used about four colors on the entire shoe they designed.

"Using a small number of colors simplifies the final design and reduces the effort it takes to design the shoe," Deng said.

Deng conducted the study with Sam Hui of the Stern School of Business at New York University and J. Wesley Hutchison of the Wharton School at the University of Pennsylvania. It was published in a recent issue of the Journal of Consumer Psychology.

The study is important, Deng said, because it is one of the first to show, from a marketing perspective, people's preferences for color combinations. Most other research on color preferences has taken a psychological perspective and simply asked people whether they thought two color chips would go well together.

"We had a very realistic situation in the study where consumers could clearly show how they would combine colors in real life," Deng said.

The study involved 142 participants who agreed to go to the publicly available NIKEiD website and create a Nike "shox" shoe for themselves. At the site, they choose colors for seven elements of the shoe: the base, secondary, swoosh, accent, lace, lining and shox. For each element, they could choose between six to 12 colors.

The researchers analyzed the color choices made by the participants and measured the similarity of chosen colors based on a widely accepted "color space" model.

Results showed there was a strong tendency to use identical colors in more than one of the seven different elements of the shoe, Deng said. When the participants did use different colors, they were almost always very closely related. For instance, "ice blue" might be combined with "twilight blue."

But a large minority of people did choose to highlight one element of the shoe by making it a color that was unrelated to the others used, offering a strong contrast. Often, people chose this contrasting color for the "shox" element — columns in the heel and mid-section of the shoe that provide cushioning while running.

These shox are a unique component of athletic shoes and a signature component of this Nike product line.

"It seems that some consumers wanted this signature part of the shoe to really stand out from the rest," Deng said. "It may be that they saw the rest of the shoe as a background for this one contrasting color. But we need to study that more."

Deng said it was significant that consumers used only about four different colors in the shoe. The researchers calculated that they would expect consumers to use 5.48 colors per shoe, based on the conditions in this study.

"We found that consumers preferred to use just a small palette of colors in their shoe and closely matched colors within this palette," she said.

But does this study really capture the participants' general feelings about color combinations, or are the results only applicable to these self-designed shoes?

To test this, the researchers asked participants to rate how much they liked four Nike-designed shoes available on the website.

The researchers then created a "color coordination index" for each Nike-designed shoe that allowed them to relate the level of similarity between colors of a specific Nike-designed shoe to participants' shoe preferences.

The results showed that there was a strong association between the color coordination index and the liking for Nike-designed shoes. This suggests the study really did reveal how participants liked to combine colors, Deng said.

Deng said the findings suggest that Nike may be offering more color combinations for each element of the shoe than consumers really need.

"If a consumer chooses a reddish color for one element of the shoe, he or she will probably only use colors closely related to red for the rest of the shoe," she said.

"However, it is not the case that you can offer the same small palette of colors for all consumers. Each consumer may have a different idea of what color they want to emphasize. But once they make that choice, their palette tends to be restricted."

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Journal Reference:

1. Xiaoyan Deng, Sam K. Hui, J. Wesley Hutchinson. Consumer preferences for color combinations: An empirical analysis of similarity-based color relationships. Journal of Consumer Psychology, 2010; 20 (4): 476 DOI: 10.1016/j.jcps.2010.07.005

People are happier when goods are more equally distributed, but equality makes people want to spend more to get ahead of their neighbors, according to a new study in the Journal of Consumer Research.

Authors Nailya Ordabayeva (Erasmus University, The Netherlands) and Pierre Chandon (INSEAD, France) examined the way equality influences the consumption decisions of people in the bottom tiers of social groups. The researchers found that increasing equality decreases bottom-tier consumer envy of what other people have and boosts their satisfaction with their possessions. But increasing equality also raises the possibility of surpassing someone else. "In other words, equality increases the social gain (the boost in one's rank in the distribution) provided by spending," the authors explain.

The authors tested their predictions by asking participants to imagine they were at the bottom of the distribution in their social group. Then they manipulated the distribution so that sometimes it was relatively equal and other times lopsided. Study participants were asked to decide whether to save money or to spend money on purchases that would improve their status by moving them to a higher tier in the distribution.

In one study, the authors created a hypothetical situation where participants vied for status represented by the amount of flower bushes in their yards. "We found that people with no flower bushes were happier with what they had when the distribution was equal and the gap with other people's gardens was not so apparent," the authors write. "But the same happy people were more likely to spend money to beautify their garden when the gap was low. Thus, equality decreased envy but increased status spending."

The pattern repeated when consumers were spending on branded clothing and flat-screen TVs and when they were in a competitive mindset. However, equality reduced spending when people sought status-neutral products or when they were in a cooperative mindset.

"People do not only compete with the Joneses because they are envious," the authors write. "Sometimes people compete with the Joneses because it allows them to climb the social distribution in a cost-effective way,"

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Journal Reference:

1. Nailya Ordabayeva, Pierre Chandon. Getting Ahead of the Joneses: When Equality Increases Conspicuous Consumption among Bottom-Tier Consumers. Journal of Consumer Research, June 2011