Friday, June 1, 2007


TV Ads Do Influence Consumers - In Elections and Beyond

By studying the outcome of the 2000 U.S. presidential election, Stanford professor Wesley Hartmann and his coauthor have proved that television advertising sells products. Along the way they also found that television advertising tipped the election in favor of George Bush over Al Gore.

Why a Ferrari May Make Imported Wine Seem Expensive

Ask consumers to study the price of an expensive foreign car. Then ask them whether a "foreign product," such as a meal in an Italian restaurant, seems expensive. According to research coauthored by Christian Wheeler of the Stanford Graduate School of Business the idea that foreign is expensive may transfer from the car to other goods.

The Positive Effect of Negative Information

When consumers get mild doses of negative information about a product or service, news about the blemish may actually strengthen their positive impression say researchers. This finding could affect online ads or even face-to-face sales processes say Baba Shiv and Zakary Tormala of the Stanford Graduate School of Business.

If Money Doesn't Make You Happy, Consider Time

Forget Suze Ormond. Time, Not Money, Is Your Most Precious Resource. Spend It Wisely, says research by Jennifer Aaker.

Why Failure Drives Innovation

Silicon Valley is populated with people who fear only sitting on the bench while someone else scores with a great idea, says Professor Baba Shiv. How people approach failure is a key to success, he argues.

Online Social Networks Can Increase Ad Revenue by Stimulating Content

To increase revenue, social networking sites need to give their most active users reason to post more information and make more friends, according to Harikesh Nair of the Graduate School of Business and his co-researchers.

Setting Vague Goals Can Help You Keep Those New Year's Resolutions

People are more likely to stay motivated and achieve a goal if it's sketched out in vague terms than if it's set in stone with a specific target, according to a new paper by Professor Baba Shiv.

Genes May Influence Consumer Choices

A new study suggests that many consumer judgments may be determined by genetics. We're not born with a Prius gene, but we may have inherited a tendency to act in certain ways says Professor Itamar Simonson.

Web 2.0 Technology and the Developing World

A low-cost incubator designed to save premature babies in impoverished areas got a boost from the 21st century world of viral communications recently when a group of students went to work with Facebook, Twitter, and YouTube, and raised $4,000 to support the firm building the incubator. Both the incubator — called Embrace — and the idea for viral marketing came out of separate classes at the Stanford Graduate School of Business.

Srinivasan’s Career in Marketing Science Commemorated

Professor Seenu Srinivasan is recognized internationally for his work on consumer choice and sales force compensation, but as his peers testified during a gathering celebrating his 36-year academic career, Srinivasan is also revered as a teacher and mentor.

Harnessing Social Media to Make a Difference

In three months a group trying to save a friend’s life used social networking tools to get over 24,000 South Asians to register for the National Marrow Donor Program. Their effort inspired Professor Jennifer Aaker to develop a course at the Stanford Graduate School of Business, The Power of Social Technology, which is supported by a set of social technology cases.

Small Steps, Big Leaps For Social Causes

Do you get a better response by describing the size of the Haitian earthquake disaster or focusing on one specific victim? Should you ask supporters of your cause to donate time or money? How will strangers respond to your request for help? These were some of the topics at a conference at the Stanford Graduate School of Business that brought together business leaders and academics to examine the psychology of giving.

Non-Profits Are Seen as Warm and For-Profits as Competent: Stereotypes Matter

Consumers frequently stereotype nonprofits as warm, generous and caring organizations, but assume their business abilities will be less competent than their for-profit peers’. In contrast, for-profit companies are stereotyped  as more competent with a balance sheet, but are not necessarily socially aware. Understanding these views can affect how both groups do business.  

Posting Calorie Counts in Restaurants Lowers Customers’ Calorie Counts Per Visit

Starbucks’ customers purchased 6% fewer calories per visit at chain outlets that posted calorie counts without substantially affecting revenue say Stanford Graduate School of Business researchers Bryan Bollinger, Phillip Leslie, and Alan Sorensen.  

Why Does Movie Popcorn Cost So Much? The high price of popcorn at most movie theater concession stands actually benefits moviegoers, say researchers, including the Business School’s Wesley Hartmann. It helps hold down the price of the movie ticket.

People in the Minority May Know Themselves Better

One benefit of knowing you're in the minority is a clearer sense of self, says marketing Professor S. Christian Wheeler. Business organizations, which have been shown to improve their decision making when diverse ideas are present, may therefore want to think about more structured ways for encouraging naysayers to speak up.

Eliminating Sales Quotas May Stimulate Profits

Eliminating sales quotas boosts company profits says Professor Harikesh Nair. In one case, the new sales compensation plan without quotas resulted in a 9% improvement in overall revenues, which translates to about $1 million of incremental revenues per month.

Is "Thinking" or "Feeling" More Persuasive?

Identical messages can have different impacts depending on whether they are couched as "I think" or "I feel," says Stanford Graduate School of Business Marketing Professor Zakary Tormala.

Believe Me, I Have No Idea What I’m Talking About

Experts can be more persuasive by expressing uncertainty, argues Stanford Graduate School of Business marketing professor Zakary Tormala.

Courting So-So Customers Can Be Good for Business

Marketers often lavish attention on their best customers, but Stanford Graduate School of Business researchers James M. Lattin and V. Srinivasan suggest it may be more cost effective to increase their spending on clients who only occasionally use their products or services.

Being Jilted Can Make You Yearn More—or So You Think

Being rejected increases many people’s motivation to pursue that elusive objective. But there’s a catch, say Stanford researchers. Being rebuffed, in fact, makes people less fond of what it is they think they want more. Once they obtain the desired goal, many are quicker to lose interest in it.

Foster a More “Giving” Identity to Rouse Donors and Volunteers

How nonprofits ask for support can make their potential donors more generous with both their time or money says Prof. Jennifer Aaker. The trick is to help the donor developed a more giving identity- for instance helping them see themselves as the kind of people who support a specific cause.

Ice  Cream and The Econometric Model for Mergers

Michaela Draganska, associate professor of marketing at the Stanford Graduate School of Business, and three co-authors studied the super premium ice cream market after the U.S. Federal Trade Commission cautioned that merger of Dreyers and Nestle could reduce competition and hurt customer choices. The result is the beginnings of a new econometric model that would allow the FTC to forecast changes and their impact on consumers.

Focus on Time Sells More Products

Focusing on the time customers invest in products typically leads to better outcomes than focusing on cost. Mentioning time rather than money can trigger very different reactions say Stanford Business School researchers Cassie Mogilner and Jennifer Aaker.

Marketing Obama's Stimulus Package: It Depends

Obama’s political strategists might have gotten an even bigger stimulus package if they had relied less on Democratic Party lawmakers to sell it. Or, taking another tack, they could have gotten more Republican support by not blaming that party for the financial crisis and by being more alarmist about the consequences, say researchers Neil Malhotra and Yotam Margalit.

Most Gamblers Are Just Out for Fun

Is gambling an addiction or a form of entertainment? Mostly the latter, according to a new academic study that found evidence that most people have strict "loss thresholds" they will not cross when gambling.

Should Charities Ask For Time Before Money

Asking would-be donors for their time, not their money, is a better way for charities to increase donations says Prof. Jennifer Aaker. Asking donors first to volunteer their time can positively shift their willingness to give both time and money.

Do Samples Whet—or Dampen—Consumer Appetites?

Does passing out samples in a grocery store cause people to not be hungry and therefore shop less? Baba Shiv, professor of marketing has found evidence that product sampling in fact can do what a good French appetizer is intended to do: whet the appetite for more.

Challenging Work and Corporate Responsibility Will Lure MBA Grads

A survey of 759 graduating MBAs at 11 top business schools reveals that the future business leaders rank corporate social responsibility high on their list of values, and they are willing to sacrifice a significant part of their salaries to find an employer whose thinking is in synch with their own.

Want (Your Product) to Look Good? Follow Something that Looks Bad

In marketing, context can be as critical as content. Recent research by Zakary Tormala and others finds that messages are perceived as more powerful when they are preceded by different messages that appear to have less substance or to be authored by someone with lesser credibility.

Customer Behavior-Be Careful to Segment

Verbal, visual, or cognitive cues can have very opposite effects when used on different groups of potential customers, say researchers Christian Wheeler and Jonah Berger.

A Brand Is a Promise to a Customer

While brands are typically associated with for-profit corporations, successful nonprofit organizations should also be aware of and try to manage the way they are portrayed and perceived in public says Jennifer Aaker.

The Price of a Medication May Affect How Well it Works

A marketing pitch or the price of a drug may do more than simply affect what the consumer thinks about the product. It also can have an actual effect on how effective the user finds the drug, says researcher Baba Shiv. Measuring Wine by Its Pricetag Wine drinkers asked to compare wines told reseachers the one they believed was more expensive tasted better. Although their brains did react with more pleasure to the higher pricetag, the researchers including Professor Baba Shiv, say the subjects were tasting the same wine under two pricetags.

Too Much Popularity Can Make Items Uncool Products may go from cool to completely out of favor in a blink. The reason, says Chip Heath, is that consumers associate their own identity with some products and will shy away from something they once liked if they perceive it is associated with the wrong kinds of groups or individuals.

Information Can Help You Get the Right Cell Phone Plan Given enough information, most users can choose the best payment plan for their needs in a cell phone contract. But, caution researchers including Sridhar Narayanan of the Graduate School of Business, there isn’t always an obvious way to get the information.

Buyer Beware: Shopping Can Lead to More … Well … Shopping Which items consumers purchase can actually create momentum to make them shop more, say researchers including the Business School’s Uzma Khan. That bag full of items you really didn’t intend to buy may not be completely your fault. (September 2007)

Specializing Can Mean Bigger Sales Customers like to feel they’re buying goods and services from businesses that are leaders in a specific category or two. Being a jack of all trades in too many categories may reduce profits say researchers. The research is co-authored by Business School Professor Michael Hannan.

Time Pressures Color Consumer Decisions Say Researchers As any woman who has ever shopped for shoes for a big event can tell you, a looming deadline affects consumer decisions. A month before the big event the shopper is looking for the perfect shoes. The day before, she just wants something that won’t be awful. Marketing researchers who have studied this phenomenon caution that time is one factor that makes framing a marketing campaign something that should not be taken lightly. (June 2007)

Not Coordinating Price and Quantity Can Mean Lost Competitive Advantage In most manufacturing operations, price is determined by the marketing department while operations decides how much to manufacture. When these two don’t coordinate well the result can mean the company loses competitive advantage say researchers who have created a new mathematical model for finding the optimal price and quantity to fit with real world consumer behavior. (June 2007)

Be Careful What You Ask Your Customers Understanding the needs and wants of customers in an ever-more competitive economic environment is critical. But Professor Itamar Simonson warns that information gleaned from some widely used types of customer surveys can be misleading and even counterproductive. (April 2007)

Social Networks Impact the Drugs Physicians Prescribe Marketing drugs to medical opinion leaders such as specialists can boost revenues by 18 percent over the return on marketing to a broad group of physicians, according to recent research coauthored by Assistant Professor Harikesh Nair. (Marcy 2007)

The Price Should Be Right: Don’t Underestimate the Savvy Consumer in Pricing Goods Video game makers can risk significantly lower profits if they set prices for new products without gauging how likely customers are to be willing to wait for the price to drop. In fact, says Assistant Professor Harikesh Nair, it could lower manufacturers’ profits by 30 percent. (October 2006)

New Research Center Named for Srinivasan India’s Great Lakes Institute of Management has created the Kotler-Srinivasan Centre for Research in Marketing, honoring the Business School’s Professor V. Seenu Srinivasan and Philip Kotler of the Kellogg School. (October 2006)

Loyalty Programs Can Be a Waste of Money Programs that reward frequent customers may have only limited effectiveness. Researchers say such programs often don’t change the behavior of frequent users although they can attract less dedicated customers. (October 2006)

Startups Need a Special Learning Curve for Sales Before a young company can sell its product successfully, the entire organization needs to learn how customers will acquire and use the product. This requires a special learning curve for sales and marketing before the product is ready for a major push, say researchers Charles Holloway and Mark Leslie. (September 2006)

Grocery Circulars Do Attract Shoppers Grocery retailers spend some $8 billion on feature print ads each year, but until now there has been little evidence of their effectiveness. A new study by researchers Seenu Srinivasan and Anand Bodapati finds that at least 10 percent of shoppers chose their store based on the week’s ads. (August 2006)

Marketing Directly to Physicians Reaps Higher Returns for Drug Companies In the case of antihistamines, drug companies could increase revenues by advertising more heavily soon after the launch of a new product, said Sridhar Narayanan, assistant professor of marketing at the Graduate School of Business, who has completed a trio of research projects on the purpose and effectiveness of pharmaceutical advertising campaigns. (August 2006)

Can Polling Location Influence How Voters Vote? Where you cast your ballot—whether it’s in a church, a school, or an auto garage—can have an effect on the outcome of elections, say three researchers from the Graduate School of Business. (July 2006)

Lowering Switching Costs Have Made Cellular Services More Competitive Allowing customers to keep the same number when they change wireless carriers has lowered the cost to consumers say researchers. (July 2006)

You Can Auction That Rembrandt Online Auctioning items online can be profitable, say researchers, if the auction firm does a good job of helping bidders understand the value of the item being sold. Uncertainty, they say, is what holds down online bids. (June 2006)

For Buyers, More Choice Means Better Quality When you absolutely positively have to pick up wine for a dinner party or a watch for a son’s graduation present, variety is indeed the spice of hype. Potential buyers see brands that offer greater variety as having higher quality, and so are more likely to purchase those brands, according to recent research. (May 2006)

Getting Emotional About Health Public service announcement programs aimed at heightening awareness of health issues need to fall on receptive ears to be effective. Research by Jennifer Aaker and others says such ads should consider the emotional state of the potential message audience and whether those individuals are self-focused or focused on others. (March 2006)

Calculating the Dollar Value of Brand Equity Most managers would give five years’ worth of stock options to figure out just how much brand equity is worth in dollar terms. Now, thanks to the work of Professor V. Srinivasan and his colleagues, the magic market research method for doing so just may have arrived. (February 2006)

Bridging the Culture Chasm: Ensuring Consumers Are Healthy, Wealthy, and Wise Consumers’ goals can be strongly influenced by culture; for instance, whether to assert yourself by taking a proactive stance or maintain harmony with others by focusing on avoiding an outcome. New research coauthored by Jennifer Aaker argues that in a world where people increasingly identify with multiple ethnic groups, individuals may react differently in different situations. (February 2006)

You Really Do Get What You Pay For A marketing pitch or the price of an item may do more than simply affect what the consumer thinks about the product. It also can have an actual effect on consumer behavior, says researcher Baba Shiv. (January 2006)

When Does Culture Matter in Marketing? When cultural biases affect a reaction to advertising messages is becoming a bigger issue as marketers search for global customers. Researchers say culture-based differences are more likely to show up when we react quickly and spontaneously to messages such as billboards or banners than when we have time to think about the ads. (November 2005)

Franchisers Protect Valuable Brands Through Higher Company Ownership Companies that spend heavily on advertising to build their brand’s reputation own a higher percentage of franchise outlets, according to recent research, and those same franchisers will choose a set percentage of outlets to operate and stick with that number. (November 2005)

The Four-Minute Search for the Perfect Mate Researchers have always reported that women pay more attention to intelligence and compatibility in deciding whom they date. A new study finds that when it comes to spending four minutes on a “speed date,” women are just as likely as men to concentrate on what the potential date looks like. (July 2005)

Asking Consumers to Compare May Have Unintended Results Asking consumers to compare your product to a more expensive one may seem like a good idea, but researchers caution that it could have surprising results. July 2005)

Let Them Eat Cake: How Thoughts of Death Affect Consumer Behavior How do people behave when faced with a threat to their mortality? According to research by Associate Professor Baba Shiv, there are dramatic changes ranging from increased church attendance to serious overeating. The reaction depends heavily on our self-image. (September 2005)

Discredited "Mozart Effect" Remains Music to American Ears There is no scientific proof that listening to classical music enhances intelligence. Professor Chip Heath has tracked this scientific legend and finds it has grown because problems attract solutions and Americans are obsessed about their children's education. (February 2005)

Valuing Bestselling Books Making the New York Times Bestsellers list is an honor, but it really doesn't boost sales substantially for most of the big name authors who make the list, according to research by Prof. Alan Sorensen. (July 2004)

What Makes Consumers Want to Buy the Latest Model? Potential customers weigh a predictable list of pros and cons when they decide whether to upgrade to the newest cell phone or video camera. Researchers have created a model they say can help marketers decide who is most likely to upgrade to the latest version. (May 2004)

Too Much Choice Can Hurt Brand Performance Some brand managers believe their brand needs to keep offering new choices to stay in the game but giving consumers too many choices may actually hurt brand performance say marketing researchers. (February 2004)

Are Discount Tickets Good for Business? The Business School's Phillip Leslie says Broadway show producers benefit from multi-tiered ticket pricing systems, including those same-day discount ticket booths. He also concludes that these systems are a good match for consumers too. (November 2003)

Consumers Work Hard for Loyalty Programs Good marketing isn't always about giving consumers what they want and reaping a profit. Research by Itamar Simonson shows that customers may not know what they want and second-guessing them can be expensive. (September 2003)

When Good Brands Do Bad Things Brands that attempt to establish trust and nurturing relationships with their customers may pay a heavy price if things go wrong, say marketing researchers. And the only thing certain in the world of marketing is that someday, something will go wrong. (March 2003)

Matching the Pitch to the Perspective Advertisers can connect with consumers by understanding whether the consumers see themselves as autonomous beings or as members of an interdependent group, says marketing researcher Jennifer Aaker. (February 2002)

Ideas that Stick Without Advertising Dollars People do care about the truth of an idea, but they also want to tell stories that produce strong emotion, and that second tendency sometimes gets in the way of the first, says Chip Heath as he researches why we want to believe urban legends and pass on bad news. (February 2002)

How Consumers Value Frequent Flier Programs and Other Rewards The harder they are to earn, the more consumers believe they deserve luxury items when they claim their premiums from customer loyalty programs such as credit card gifts or frequent flier miles. (August 2001)

The Limits of One to One Marketing One-to-one marketing isn't the magic bullet it was rumored to be, says Itamar Simonson, because customers often don't really know what they want. (August 2000)

The Downside of Conducting Consumer Surveys Telling consumers in advance that they are going to be asked for their opinion makes their responses more negative than merely asking them to evaluate something after the fact, says marketing Professor Itamar Simonson. (May 2000)