- Nov 5, 2004
The Marketer's View of People
Sometimes when I see TV commercials, I wonder what the marketers really think of people. They must think we are imbeciles or something. Where do they get this idea? It usually does not take me long to decipher the answer. After all, some of the research that we present to our students in the classroom gives a pretty good idea about how we in marketing view people. I know many of you might think that all the lip service to "our customers are the most important people" is bunk, but really, marketers do think that customers are important. It's just that we don't think our customers are really that smart.
I don't say that we marketers are any smarter, but the way it works is that when a marketer looks at all the research evidence about how consumers behave, it is difficult not to start thinking that people really are pretty incoherent shoppers. I should say right away that the reasons for this have more to do with the time and effort we spend on evaluating products and services than with any innate level of intelligence. Even the most educated and intelligent individual is capable of being influenced willy-nilly by some clever promotion and of making the most atrocious purchase decisions. I think you know what I mean; we all let our guard down at times. We buy useless things because they are on sale; we buy "American-made" only to find out the goods were made in China; or, we order a high-tech mosquito killer after seeing it advertised on TV, forgetting that we don't have electricity in the backyard. One of my esteemed colleagues stocked up on cases of French champagne as an investment, not realizing that the fizz dissipates over time.
Marketers do scientific research to back up such anecdotal evidence. Some of it is elegant and simple, as when two random samples of homemakers were shown a shopping list that differed only by one item. One list included "Maxwell House coffee," while the other list had "Nescafe instant coffee." When asked to describe the housewife with such a shopping list, the two samples differed significantly, with those shown the second list imagining a careless and irresponsible housewife. This was despite the fact that prior personal interviews had revealed no negative attitude toward instant coffee.1 Another small test involved lining the pockets of identical overcoats with different materials and asking people to compare them. Invariably, pockets lined with softer material scored higher quality ratings. You have probably heard about the various blind tests of soft drinks, beer, and various snacks. Even devoted Coca-Cola drinkers, who forced the com pany to get back to "Classic" Coke, had not realized that the cola formula had been changed several times during their lifetime, but without announcements or packaging changes.2 Without the logos available to view, there have apparently even been cases where colas and non-colas could not be reliably distinguished.3 It sure is hard sometimes to take people's opinions seriously.
A lot of market research involves sophisticated design and largescale data collection. Branding research, for example, which tries to assess the value of various brands, involves large surveys of respondents queried about a wide variety of brands. Research for new products can involve sophisticated analyses of consumers' responses to alternative designs, projecting laboratory test results to a forecast of market shares. Alternative promotional tools things like coupons versus in-store cents-off, special aisle displays, or free home samplesare evaluated through computerbased analyses of massive sets of supermarket scanner data. For many of us marketers, these kinds of sophisticated scientific endeavors help to shield us from the realization that we are, in fact, evaluating means for manipulating people.
The empowered consumer?
Since the arrival of one-to-one marketing, the Internet, and relationship marketing, there has been much talk about the emergence of the empowered consumer. Marketers can no longer dictate what consumers should buy and use. Consumers are in control of the communications with any seller, expressing preferences, evaluating alternative prototypes, and even designing their own products, from cars and computers to shirts and shoes.
This glowing picture is correct as far as it goes. But because of the huge number of products and the massive communication efforts to sell them, consumers have little time to spend on any one single product or brandunless, of course, shopping is all they do.
Not surprisingly, while most consumers do spend at least some time on products or services that hold a particular interestyour tennis and golf, my classical music and opera, someone else's vintage cars and motorcyclesour empowerment to find out more about mortgage refinancing, cholesterol levels in salad dressings, and the energy efficiency of electric cars goes unheeded. There is just too much.
The sheer volume of products and services, coupled with their ever shorter lifecycles and the accompanying promotional noise, would lead one to suspect that consumers in the U.S. are less in control of things than before. I am not aware of any definite research to document this, and I am not sure consumers themselves would agree. I can hear my daughters' protests when I suggest that they are influenced by advertising. But we marketers know betterand the most recent research suggests that things are even worse than before.
In August 2003, a colleague and I went to the American Marketing Association meetings in Chicago to interview potential candidates for a position as an assistant professor at Georgetown. Hiring in the academic profession involves personal interviews with candidates, and a conference is a natural occasion since people gather from all over the world to attend. The interview tends to focus on the research that the candidate is doing for his or her doctoral dissertation. The topics naturally reflect the current trends in the profession. I expected to hear a lot about the "empowered" consumer from the 29 candidates we were scheduled to interview over the three-day period. I heard a lot of the opposite.
Before I talk about some of the candidates' research, please let me emphasize that this is clearly not a random sample of research in marketing. What companies do is in some ways different, since their research has more of a "bottom line" profitability orientation than academic research. Also, our 29 candidates were not randomly selectedwe wanted someone who would teach our courses, but would also fit Georgetown's general research thrust into international, public policy, and ethics topics. But, the 29 were the best candidates from the best universities across this country and elsewhere. We interviewed doctoral students from Columbia and Wharton, from UCLA and Stanford, from North western, Florida, Michigan, and INSEAD, a leading business school in France.
State of the art
Of the 29 cases, no less than 22 did research on some aspect of what we call "consumer behavior," investigating the psychological and sociological factors that underlie a consumer's way of dealing with the marketplace of today. Three focused on how people deal with risky choices, a traditional topic confirming that women still tend to take less risks than men. Another three studied customer satisfactionanother traditional topicone study showing how satisfaction can be influenced (manipulated?) by information and events that recalibrate expectations downward (one possibility is to simply wait with delivery of a product so that the immediate post-purchase euphoria can be given time to die downAmazon.com covered that angle, it would seem). No less than seven studies focused on the role of emotion or "affect" in brand choice. The emotional attachment to a brand is by now a "given" in marketing, and the question is more how to create and nurse it. One candidate discussed his study of how emotional attachment can exacerbate any failure of a favorite brandpeople really feel cheated.4Can the warm aura of sincerity around your brand get too hot? There is also clear evidence that people eat more when feeling down. More popcorn is consumed when watching sad movies than happy moviesalthough the viewers themselves don't seem to recognize this.5
I thought I would see some study of how people have now taken charge of their own consumer destiny. I guess I was biased, but honestly, there was very little of that. Instead, there were a couple of studies of how incidental information about unrelated product categories (the Internet banner ads that suddenly pop up, for example) can influence choice, how the order of presentation (what is called framing in psychology) influences people's judgments, and how a large number of choices lowers people's confidence in making the best choice.6 There was also a study of how people cope with consumer stress, something that would be useful for us here, but the study area is still in its infancy. The preliminary findings are that people who think themselves capable will do something about the stress; others will simply avoid facing the problem.7
One of the nails in the coffin for the "empowered" consumer came from a study of rebate redemption rates.8 Rebates are particularly popular promotional tools used by technology retailerscell phone marketing is a case in pointbut they are also popular for packaged goods, where they are the number two tool after coupons. Redemption rates vary, but are generally lowless than 50% for big-ticket technology goods, and as low as 2% for packaged goods. Conventional wisdom would suggest that the redemption rate would increase as the dollar amount of the rebate goes higher since the gains are greater. The rate should also increase with the length of the redemption period, since the consumer has more time to submit the paperwork. The study did not support this conventional wisdom. The purchase rate increased, that is, more people bought when the amount and length of the period increased. But the redemption rate was largely not affected by the amount offered, and by extending the time limit, redemption rates actually decreased. This leads one to believe that when people are given plenty of time to do something, it never gets done. Advice for companies: Offer big rebates and give people a lot of time to redeem. You sell more, and it costs less.
To me, the most disconcerting study was one that tested whether ads work when people are warned of the persuasive intent (such as reminding people that the Marlboro cowboy is only trying to sell cigarettes).9 In this study people were shown an advertisement for a shampoo, the ad coupled with the picture of a beautiful beach. The typical "creative" idea is that the beautiful beach would make people feel good about the shampoo brand. The study tried to stop the formation of this association by asking subjects to remember that the advertiser was only trying to sell shampoo. The well-established "Elaboration Likelihood Model" suggests that conscious reasoning should counter this kind of weak persuasive effort. However, the study found precisely the opposite: the association became stronger when subjects were asked to explicitly argue against the ad's influence. Subjects could not consciously stop the formation of a positive attitude toward the brand. The more we argue against something, the more we like it?
This finding also weakens the comfort of the thought that consumers are on to what marketers do. Research suggests that consumers do understand the "persuasion schemas" that marketers employ, that there is a certain sequence of tactics employed to gain compliance from the consumer.10 But if the persuasion works despite this consciousness, it is truly hard to defend yourself against marketers' influence.
I must emphasize that in no way do I wish to somehow indict these projects for their choice of topics. These are very valid academic subjects and are equally useful on either side of any debate, pro or con consumers. I should also caution, again, that these are only "selections" of current academic research in marketing. Furthermore, most of the studies have not yet been subjected to the peer review necessary to pass muster in the profession. Nevertheless, the absence of optimistic pronouncements of a sovereign and empowered consumer was striking. There was little or no evidence that consumer paradise was here, that consumers were freer than ever. Rather, I came away with the feeling that consumerspace is a cage in which many of us are trapped. Yes, we have all the products and all the excitement we want and more, but we don't seem to cope very coherently with our situation. Are we the Osbournes?
For most real-world marketers, these new academic findings are still treated as just that, "academic." But, there are a few longestablished market practitioners and that I think help explain why marketers do what they do. They are the kinds of insights that constitute part of what is known as "marketing know-how," but some might call them "tricks of the trade." They reflect how marketers think of people. Here are five selections:
"Mere exposure"Exposing an audience to a certain message and then repeating it over and over again tends to generate a positive change in attitudenot just an acceptance of the message, but a positive attitude toward it. For example, popular hit songs tend to be those that people are able to hear repeatedly over the airwaves. While the initial reaction to something new and unfamiliar may be negative, just hearing or seeing it repeatedly makes it more familiar and acceptable. Thus, the repetition of slogans: They may seem annoying, but the theory is that they become part of the familiar and thus comfortable environment. Bush's "staying on message" strategy when discussing Iraq is a good illustration of this principle. It is mere exposure.
"Luxury becomes necessity"Once luxury is tasted, it becomes a necessity. Just as for Adam after Eve's apple, there is no return to Paradise. There is no going back; levels of aspirations will always rise as possessions increase. Materialism is unlikely to bring happiness on its own. It takes almost a religious conversion to swear off the neverending spiral. "Affluenza" is a great example of how this works, and how it has affected Americans' willingness to work hard and take no vacations.
"Money is relative"Beyond mere survival, relative income is what matters. It was an economist, James Duesenberry, who first argued that increasing prosperity will not necessarily lead to greater satisfaction. The key is improving one's lot vis-à-vis one's neighbors's. Not just "keeping up with the Jones's," but "beating the Jones's." When everybody else loses more in the stock market than you do, your relative wealth has gone up. The fact that we marketers bring good things to poor people is not enough. We also have to make sure the distribution is seen as fair, which presents a tough problem with free markets.
"New choices create headaches"Becoming aware of new alternatives has the effect of making current possessions seem less valuable. Opening markets to new products and services will easily create tension and dissatisfaction. Knowing that you can have a Hummer will reduce the satisfaction level for many SUV owners. When a company introduces its brand in a foreign market, not only will domestic competitors be pressured, but so will many consumers.
"Foot in the door"While a potential customer may be reluctant to commit to one major purchase, presenting a smaller and more affordable first sacrifice makes later incremental charges more acceptable. This is an example of a "You give them a hand, they'll take the arm" kind of thing. This is why the "Try it at home and return it if not satisfied" promotion worksfew will return the goods. The entry of a McDonald's outlet in a new country might seem a small and unremarkable step, but really, it takes on a much greater significance.
So, marketers do not have such an uplifting view of human nature. If they think that they have a good product to sella judgment perhaps based on market test resultsthey see nothing wrong with trying to tell prospective customers about it. The objectionspeople don't want to hear about it, they are already satisfied with existing products, there is little need for the new productare ignored. Taking such an objection to "innovation" seriously would not only stop the enterpriseand the economy in its tracks, people do not really know what they want anyway. So, marketers tend to use an in-your-face approach to get your attention, to point to a problem that you did not know you had, to present their product's alleged benefits, and to repeat the brand name enough times so that it is embedded in your consciousness.