Right for Customers
Should Your Brand Pick a Side? How Market Share Determines the Impact of Corporate Political Advocacy
Chris Hydock, Neeru Paharia & Sean Blair
Journal of Marketing Research, forthcoming
Abstract:
Consumers increasingly expect brands to “pick a side” on divisive sociopolitical issues, but managers are reluctant to risk alienating customers who oppose their position. Moreover, research on identity-based consumption and negativity bias suggests that corporate political advocacy (CPA) is more likely to repel existing customers who oppose the CPA than to attract new customers who support it, implying that the net effect will be negative even if consumers overall are evenly divided in their support/opposition. In this research, the authors posit that despite this negativity bias in individual-level choice, the net effect of CPA at the market level is determined by a sorting process that benefits small-share brands and hurts large-share brands. This is because having few customers to lose and many to gain can offset the risk of the negativity bias in consumers’ identity-driven responses to CPA, potentially leading to a net influx of customers for small-share brands. Five experiments provide support for this theorizing and identify authenticity as a necessary condition for small share brands to benefit.
Announcing High Prices to Deter Innovation
Guillermo Marshall & Álvaro Parra
Management Science, forthcoming
Abstract:
Price announcements — similar to the ones made by tech firms at media events — are effective in deterring innovation. By announcing (and setting) a high price, a firm increases its rivals’ short-run profits, reducing the rival firms’ incentives to innovate by magnifying their Arrow’s replacement effect. We show that the equilibrium prices are greater and research and development (R&D) investments lower relative to when price announcements cannot be used strategically. We call this the R&D deterrence effect of price and show that it induces equilibrium prices that may exceed the multiproduct monopoly prices and even dissipate the consumer benefits of innovation.
Does Gender Matter? The Effect of Management Responses on Reviewing Behavior
Davide Proserpio, Isamar Troncoso & Francesca Valsesia
University of Southern California Working Paper, June 2020
Abstract:
In this paper, we study the effect of management responses on the reviewing behavior of female and male reviewers. First, we use a survey to show that female reviewers are more likely to perceive management responses as a source of conflict. Second, we use Tripadvisor data to provide evidence of gender bias in the way hotel managers address reviewers writing negative reviews. Third, we investigate the downstream consequences of these findings using a Difference in Differences strategy to show that, after hotels begin to respond to reviews, there is a decrease in the likelihood of observing a review written by a female user. Moreover, we show that this effect is driven by a reduction in the number of negative reviews, and by independent hotels. Fourth, we validate these results using a lab experiment which shows that, to avoid conflict, female reviewers prefer a platform that doesn't allow management responses when they want to write a negative review. Overall, our findings show that, while the introduction of management responses created a new channel of communication between firms and consumers, such a channel can be misused to discriminate and can lead to unexpected consequences such as a reduction of reviews by those users more likely to be discriminated against.
Pretty Healthy Food: How and When Aesthetics Enhance Perceived Healthiness
Linda Hagen
Journal of Marketing, forthcoming
Abstract:
Marketers frequently style food to look pretty (e.g., in advertising). This article investigates how pretty aesthetics (defined by classical aesthetic principles, such as order, symmetry, and balance) influence healthiness judgments. The author proposes that prettier food is perceived as healthier, specifically because classical aesthetic features make it appear more natural. In a pilot, six main studies and four supplemental studies (total N = 4,301) across unhealthy and healthy, processed and unprocessed, and photographed and real foods alike, people judged prettier versions of the same food as healthier (e.g., more nutrients, less fat), despite equal perceived price. Even given financial stakes, people were misled by prettiness. In line with the proposed naturalness process, perceived naturalness mediated the effect; belief in a “natural = healthy” connection moderated it; expressive aesthetics, which do not evoke naturalness, did not produce the effect (despite being pretty); and reminders of artificial modification, which suppress perceived naturalness, mitigated it. Given that pretty food styling can harm consumers by misleading healthiness judgments for unhealthy foods, managers and policy makers should consider modification disclaimers as a tool to mitigate the “pretty = healthy” bias.
Value of Aggregators
Selin Akca & Anita Rao
Marketing Science, September-October 2020, Pages 893–922
Abstract:
Aggregators are facing increased scrutiny by regulatory authorities, suggesting these sites have considerable market power. On the other extreme, firms are bypassing aggregators, choosing instead to sell directly to consumers. This raises the question as to which party has more market power: the aggregator or the individual firm. Focusing on the airline industry, we investigate who benefits most in the airline-aggregator relationship. Specifically, we ask what would happen to airline and aggregator site visits and purchases in the absence of a comprehensive aggregator. We first explore consumers’ search patterns on Southwest, an airline that has never been part of any aggregator. In a descriptive exercise, we find that consumers who book on Southwest are the least likely to visit aggregator sites. Second, we use the 2011 American dispute with Orbitz as an exogenous event, which led to American fares no longer being displayed on Orbitz for five months. We use this dispute to identify who was hurt the most — the aggregator or the airline — in the months following the dispute. Our findings indicate the aggregator loses the most when it is not comprehensive.
Generating Content Increases Enjoyment by Immersing Consumers and Accelerating Perceived Time
Gabriela Tonietto & Alixandra Barasch
Journal of Marketing, forthcoming
Abstract:
Advances in technology, particularly smartphones, have unlocked new opportunities for consumers to generate content about experiences while they unfold (e.g., by texting, posting to social media, writing notes), and this behavior has become nearly ubiquitous. The present research examines the effects of generating content during ongoing experiences. Across nine studies, the authors show that generating content during an experience increases feelings of immersion and makes time feel like it is passing more quickly, which in turn enhances enjoyment of the experience. The authors investigate these effects across a broad array of experiences both inside and outside the lab that vary in duration from a few minutes to several hours, including positive and negative videos and real-life holiday celebrations. They conclude with several studies testing marketing interventions that increase content creation and find that consumers who are incentivized or motivated by social norms to generate content reap the same experiential benefits as those who create content organically. These findings illustrate how leveraging content creation to improve experiences can mutually benefit marketers and consumers.
Does the typeface on album cover influence expectations and perception of music?
Tara Venkatesan, Qian Janice Wang & Charles Spence
Psychology of Aesthetics, Creativity, and the Arts, forthcoming
Abstract:
CD and digital album covers are part of the music purchase/consumption experience; yet, very little is known about how album cover design influences people’s expectations concerning, and their perception of, music. This article explores the effect of the typeface curvilinearity of album cover design on people’s expectations and perception of music. Typeface curvilinearity has been shown to influence expectations across other sensory modalities, such as taste (gustation). Across 3 studies, we demonstrate how angular versus rounded typeface can impact expectations concerning how the music will sound. We also demonstrate how angular and rounded typefaces influence emotion ratings of actual music samples. In Experiment 1, typeface curvilinearity influenced people’s expectations of music, with participants expecting the music to sound more angular, masculine, fast, rough, happy, evil, violent, exciting, and active when the typeface on the faux CD album cover was angular compared with when it was round. Conversely, participants expected the music to sound more round, feminine, slow, smooth, sad, good, gentle, calm, and passive when the typeface was round than when it was angular. Experiment 2 demonstrated that typeface curvilinearity influenced people’s ratings of emotional valence but not arousal in neutral music (i.e., music that is considered neither round nor angular). Specifically, participants evaluated the music as sounding more pleasant when the CD cover featured round typeface. Finally, in Experiment 3, we did not find evidence that CD album cover typeface influences people’s perception of arousal or valance of music when the music itself is rated as sounding highly round or angular. These results will be of interest to designers and marketing experts when creating CD covers, logos, posters, and lyric videos.