Product placement
Too Constrained to Converse: The Effect of Financial Constraints on Word-of-Mouth
Anna Paley, Stephanie Tully & Eesha Sharma
Journal of Consumer Research, forthcoming
Abstract:
Existing research demonstrates that financial constraints are widespread and influence consumer attention, preference, choice, and consumption in a variety of ways. Despite the growing knowledge of how financial constraints affect the consumer decision making process, less is known about its impact on post-purchase behavior. This work examines whether financial constraints impact an important post-purchase behavior - word-of-mouth - and in what direction. Seven studies show that financial constraints reduce purchase-related word-of-mouth. This effect emerges across consumers’ reported frequencies of discussing their purchases with friends and family, as well as their intentions, desires, and real decisions to engage in online word-of-mouth. This effect is explained by reduced anticipated pleasure of engaging in purchase-related word-of-mouth, which results from financially constrained consumers’ belief that rehearsing their monetary expenditures will reinforce negative feelings about their limited financial situation. This effect cannot be similarly explained by other accounts such as impression management or the desire to hoard informational resources. Further, the authors show that the reduction in anticipated pleasure from word-of-mouth is specific to sharing about one’s monetary expenditures. Thus, financial constraints reduce purchase-related word-of-mouth, but they do not universally decrease one’s propensity to share.
Losing By Winning: The Danger Zone of Adverse Competitor Replacement
Richard Makadok & David Gaddis Ross
Strategic Management Journal, forthcoming
Abstract:
We use a formal model, motivated by a case study from the airline industry, to consider an industry structure wherein a firm may find that improving its competitiveness hurts its performance. Specifically, we examine the possibility that a superior incumbent may, by getting stronger, drive a weak rival from the market, and thereby allow a stronger rival to enter in its place. Such “adverse competitor replacement” reduces the profit of the superior incumbent and may even, in an extreme case, cause the superior incumbent to be driven from the market as well. We show that adverse competitor replacement can arise under a rational equilibrium and may become more likely if a firm improves its capability for self‐improvement.
The Minimal Deviation Effect: Numbers Just Above a Categorical Boundary Enhance Consumer Desire
Yunhui Huang & Han Gong
Journal of Consumer Research, forthcoming
Abstract:
The present research introduces the minimal deviation effect. We propose that numbers that are slightly above a numerical category boundary (e.g., 1001 in comparison to 1000), representing a salient violation of coherent numerical categories, are arousal-inducing, and that the heightened arousal can be misattributed to the incentive value of the focal product, thus increasing consumers’ wanting but not liking. Results from nine experiments provide converging evidence to support our proposition. Specifically, we show that consumers are more likely to choose and willing to pay more for products associated with a number with minimal deviation from a categorical border, regardless of whether the number represents product quantity, brand name, or model series. Moreover, we find that the minimal deviation effect diminishes when people are already aroused or when they attribute the arousal to other sources. Finally, we demonstrate that the effect can be reversed when minimal deviation is embedded in certain attribute dimensions (e.g., price), shedding more light on the circumstances under which the minimal deviation effect will occur.
Video Content Marketing: The Making of Clips
Xuan Liu et al.
Journal of Marketing, July 2018, Pages 86-101
Abstract:
Consumers have an increasingly wide variety of options available to entertain themselves. This poses a challenge for content aggregators who want to effectively promote their video content online via the original trailers of movies, sitcoms, and video games. Marketers are now seeking to produce much shorter video clips to promote their content on a variety of digital channels. This research is the first to propose an approach to produce such clips and to study their effectiveness, focusing on comedy movies as an application. Web-based facial-expression is used to study viewers' real-time emotional responses when watching comedy movie trailers online. These data are used to predict viewers' intentions to watch the movie and its box office success. The authors then propose an optimization procedure for cutting scenes from trailers to produce clips and test it in an online experiment and in a field experiment. The results provide evidence that the production of short clips using the proposed methodology can be an effective tool to market movies and other online content.
Are Atypical Things More Popular?
Jonah Berger & Grant Packard
Psychological Science, forthcoming
Abstract:
Why do some cultural items become popular? Although some researchers have argued that success is random, we suggest that how similar items are to each other plays an important role. Using natural language processing of thousands of songs, we examined the relationship between lyrical differentiation (i.e., atypicality) and song popularity. Results indicated that the more different a song’s lyrics are from its genre, the more popular it becomes. This relationship is weaker in genres where lyrics matter less (e.g., dance) or where differentiation matters less (e.g., pop) and occurs for lyrical topics but not style. The results shed light on cultural dynamics, why things become popular, and the psychological foundations of culture more broadly.
Trust and Disintermediation: Evidence from an Online Freelance Marketplace
Grace Gu & Feng Zhu
Harvard Working Paper, May 2018
Abstract:
As an intermediary improves trust between two sides of its market to facilitate matching and transactions, it faces an increased risk of disintermediation: with sufficient trust, the two sides may circumvent the intermediary to avoid the intermediary’s fees. We investigate the relationship between increased trust and disintermediation by leveraging a randomized control trial on a major online freelance marketplace. Our results show that enhanced trust increases the chance for high-quality freelancers to be hired. When the trust level is sufficiently high, however, it also increases disintermediation, which offsets the revenue gains from the increase in the hiring of high-quality freelancers. We also identify heterogeneity across clients and freelancers in their tendencies to disintermediate.
No Small Matter: How Company Size Affects Consumer Expectations and Evaluations
Linyun Yang & Pankaj Aggarwal
Journal of Consumer Research, forthcoming
Abstract:
The emphasis on business size has become more overt in recent years. However, it is not clear how company size influences consumers' evaluations. Five experiments investigate the effect of size on consumers' expectations and evaluations of company behaviors. Consumers expect higher communion from small compared to large companies, and consequently, small relative to large companies garner lower evaluations when they exhibit low communion behaviors. These high communion expectations are driven by the relatively lower marketplace power of small companies. While study 1 provides real-world evidence for the effect of company size on evaluations of company behaviors, studies 2A and 2B demonstrate that perceptions of power underlie the effect of company size on expectations for communion. Studies 3A and 3B indicate that when a company engages in low communion behavior, small relative to large companies garner lower evaluations and this effect is driven by consumers' perceived violation of expectations. Incorporating additional studies, two meta-analyses conducted with four studies for consumer expectations and six studies for consumer evaluations provide confirmatory evidence in support of our hypotheses. This research demonstrates that how companies are perceived in terms of size and power creates meaning for consumers that drives their expectations and subsequent evaluations.
A Bridge Too Far: Divestiture as a Strategic Reaction to Status Inconsistency
Pengfei Wang & Michael Jensen
Management Science, forthcoming
Abstract:
This study focuses on the market identities of firms and suggests that identity ambiguity is caused not only by bridging horizontal product categories but also by status inconsistency stemming from bridging vertical status categories. Focusing specifically on how firms reduce status inconsistency by restructuring their business portfolios, we argue that status inconsistency motivates firms to divest business units to present a more coherent vertical market identity. Emphasizing the interplay between horizontal and vertical identity ambiguity, we argue furthermore that status-inconsistent units that are related to the core business units within a firm are more likely to be divested. Using a comprehensive sample of publicly traded U.S. firms from 1998 to 2014, we report that status inconsistency increases the likelihood of divestiture that decreases status inconsistency, particularly for high-status firms. Moreover, although status-inconsistent units are generally more likely to be divested, this effect is stronger for core business units.
The Influence of Incidental Similarity on Observers’ Causal Attributions and Reactions to a Service Failure
Lisa Wan & Robert Wyer
Journal of Consumer Research, forthcoming
Abstract:
Observers’ reactions to a service failure and their attributions of responsibility for its occurrence can depend on fortuitous characteristics of the protagonists that happen to draw their attention. Four field and laboratory experiments show that when observers have an incidental similarity to one of the persons involved in a service failure (the customer or the service provider), their attention is drawn to this protagonist, often leading them to construe the situation from this person’s perspective and consequently to blame the protagonist less for the negative event they observe. However, when an incidentally similar protagonist is rude or has an undesirable personal characteristic (i.e., obesity), observers’ greater attention to him or her increases their attributions of responsibility to him or her rather than decreasing it. These opposing effects of incidental similarity on attributions influence not only observers’ evaluations of the persons involved in the situation they observe but also their willingness to patronize the establishment. These effects occur both when observers actually witness a conflict offline and when they consider it online on the basis of reviews.