Sales Pitch
Consumers Prefer Products That Work Using Directionally Consistent Causal Chains
Soaham Bharti & Abigail Sussman
Journal of Consumer Research, forthcoming
Abstract:
Products often aim to help consumers achieve desired outcomes such as increasing energy levels or removing fabric stains. These products typically work via rich causal paths. The current research suggests that the structure of these paths influences consumer judgments of product efficacy. In particular, sequential steps in these paths can evoke distinct directionalities -- either increasing or decreasing variables in each step along the way. For example, a face cream could be described as "increasing the turnover of skin cells to reduce wrinkles." Under our framework, the action influencing skin cells would correspond to increasing directionality, while the action influencing wrinkles would correspond to decreasing directionality. Ten experiments provide evidence that consumers prefer products with directionally consistent causal chains (i.e., all steps evoking the same directionality) over those with directionally inconsistent ones (i.e., steps evoking contrasting directionalities). This occurs because consumers find directionally consistent causal chains easier to process which in turn leads them to infer higher efficacy from products working via such consistent chains. These findings advance our understanding of how consumers evaluate product descriptions and provide prescriptions for marketers tasked with composing product descriptions to convey efficacy.
The Gentrification Effect of Retail Amenities: Evidence from Whole Foods Market
Matthias Hoelzlein & Sam Miller
University of Notre Dame Working Paper, October 2024
Abstract:
We study the effect of premium grocery store openings, i.e., Whole Foods Market, on their surrounding communities. To identify this amenity premium, we compare narrowly defined neighborhoods that host a Whole Foods Market with similar communities that receive non-premium grocery stores. We find that neighborhoods experience significant increases in high-income, prime age, and skilled residents over five years following the opening of a premium store. Whole Foods openings also lead to higher house prices and shifts toward income-elastic retail and services in surrounding areas. We argue that individual businesses can generate amenities that significantly affect neighborhood dynamics and trigger gentrification.
Retailer Differentiation in Social Media: An Investigation of Firm-Generated Content on Twitter
Mikhail Lysyakov et al.
Journal of Marketing, forthcoming
Abstract:
Social media platforms have been used by firms for a variety of purposes -- for building firms' brand image, increasing customer engagement, providing customer service, among others. However, there is very little research on content strategies adopted by traditional rival firms competing on online social media platforms. This paper seeks to fill this gap by examining whether retailers, traditionally identified as close competitors, mirror this rivalry in their social media content strategies on Twitter. To this end, this study introduces a new metric for assessing competition on online social media, based on content similarity. The authors find that retailers competing closely in traditional context show greater divergence in their content strategies on social media, and firms whose social media content strategies are less similar to content strategies of their close traditional rivals benefit from higher engagement and acquire new followers faster. In examining the mechanism of the effect, the authors find that these divergent firms' improved performance is attributable to their superior ability to leverage the higher-level affordances of Twitter as compared to their rivals. The results of this study offer valuable insights for firms seeking to distinguish their social media content from that of their competitors.
The Value of Platform Endorsement
Mimansa Bairathi, Xu Zhang & Anja Lambrecht
Marketing Science, forthcoming
Abstract:
Many digital platforms with large product assortments endorse a select group of items to facilitate user choice. However, although it seems intuitive that such endorsement may increase the sales of endorsed items, little is known about its effect on unendorsed items and on the platform. Using data from a field experiment conducted by an online freelance platform, we examine the effect of exposure to platform endorsement on user search and purchase behavior. We find that exposure to platform endorsement increases user search and purchases not only for endorsed services but also, for unendorsed services. We link the increase in search and purchases to an increase in the perception of the quality of services offered on the platform. We further explore heterogeneity in the effect of platform endorsement and find that the effect of exposure to platform endorsement on purchase is more pronounced for users with a higher propensity to purchase. We discuss implications for platforms, merchants, and regulators.
Color Me Effective: the Impact of Color Saturation on Perceptions of Potency and Product Efficacy
Lauren Labrecque et al.
Journal of Marketing, forthcoming
Abstract:
Consumers use observable cues, like color, to help them evaluate products. This research establishes that consumers infer greater product efficacy from higher color saturation across seven lab experiments (n = 2,745), a web scraping study, and a field experiment. The studies provide evidence that this belief stems from learned associations between color saturation and potency and is applied to both consumable and durable products. Moreover, consumers overgeneralize this intuition beyond a product's actual color to a product's packaging color and the background color used in its advertisements. Two studies support the proposed process with evidence via moderation, while another study identifies consumption goal as a boundary condition, such that high saturation decreases perceived efficacy and purchase intent when consumers search for a gentle (vs. strong) product. The effect is not limited to pre-purchase perceptions but also influences perceptions after actual product use. The effect is established across six hues while holding color lightness constant and has multiple downstream consequences, including purchase intent and consumption amount. The findings have implications for marketers who make product design choices like color choices for products, their packaging, and advertisements, and in instances where consumers may be harmed from underuse or overuse.