Selling Success
Serendipity: Chance Encounters in the Marketplace Enhance Consumer Satisfaction
Aekyoung Kim et al.
Journal of Marketing, forthcoming
Abstract:
Despite evidence that consumers appreciate freedom of choice, they also enjoy recommendation systems, subscription services, and marketplace encounters that seemingly occur by chance. This paper proposes that enjoyment can, in some contexts, be higher than that in contexts involving choice. This occurs as a result of feelings of serendipity that arise when a marketplace encounter is positive, unexpected, and attributed to some degree of chance. A series of studies shows that feelings of serendipity positively influence an array of consumer outcomes, including satisfaction and enjoyment, perceptions of meaningfulness of an experience, likelihood of recommending a company, and likelihood of purchasing additional products from the company. The findings show that strategies based on serendipity are even more effective when consumers perceive that randomness played a role in how an encounter occurred, and not effective when the encounter is negative, the encounter occurs deterministically (i.e., planned by marketers to target consumers), and consumers perceive that they have enough knowledge to make their own choices. Altogether, this research suggests that marketers can influence customer satisfaction by structuring marketplace encounters to appear more serendipitous, as opposed to expected or entirely chosen by the consumer.
Negative Peer Disclosure
Sean Cao, Vivian Fang & Lijun (Gillian) Lei
Journal of Financial Economics, forthcoming
Abstract:
This paper provides first evidence of negative peer disclosure (NPD), an emerging corporate strategy to publicize adverse news of industry peers on social media. Consistent with NPDs being implicit positive self-disclosures, disclosing firms experience a two-day abnormal return of 1.6%-1.7% over the market and industry. Further exploring the benefits and costs of such disclosures, we find that NPD propensity increases with the degree of product market rivalry and technology proximity and disclosing firms outperform nondisclosing peers in the product markets in the year following NPDs. These results rationalize peer disclosure and extend the scope of the literature beyond self-disclosure.
Local News Online: Aggregators, Geo‐Targeting and the Market for Local News
Lisa George & Christiaan Hogendorn
Journal of Industrial Economics, December 2020, Pages 780-818
Abstract:
We examine how placement of geo‐targeted local news links on Google News affected local news consumption. Using a sample of news visits by 36,876 U.S. households before and after a Google News design change, we find that aggregation increased the level and share of local news consumed online. Magnitudes are modest: consumption of local news among heavy Google News users rose by 25% after the redesign, but from a low base. Geo‐targeting increased weekly consumption variety and reduced concentration among local outlets but did not raise overall consumption variety, suggesting that aggregators play a limited role in product discovery.
Consumer Rational (In)Attention to Favorable and Unfavorable Product Information, and Firm Information Design
Kinshuk Jerath & Qitian Ren
Journal of Marketing Research, April 2021, Pages 343-362
Abstract:
The authors study how a consumer optimally allocates attention to favorable and unfavorable product-related information before making the purchase decision, when information processing is costly. They find that attention allocation depends on, among other factors, the consumer’s prior belief about whether the product matches their needs and their unit information processing cost. A consumer processes both “confirmatory” and “disconfirmatory” information to their prior belief, but to different degrees under different conditions. In general, if the consumer has an extreme prior, or if the unit cost of processing information is high such that only a small amount of information is optimally processed, they process more confirmatory than disconfirmatory information; this offers a rational explanation for the phenomenon known as “confirmation bias.” The authors also find that a seller can benefit by influencing the consumer’s attention allocation by strategically choosing how much favorable and unfavorable information to make available for the consumer to process and by influencing the information processing cost, where the optimal strategy depends on the seller’s ability to adjust product price. Surprisingly, a seller has a lower incentive to suppress unfavorable information when the consumer has a worse prior belief about product fit. The authors illustrate their model with an application to information provision in product reviews.
Safe Together, Vulnerable Apart: How Interstitial Space in Text Logos Impacts Brand Attitudes in Tight versus Loose Cultures
Tanvi Gupta & Henrik Hagtvedt
Journal of Consumer Research, forthcoming
Abstract:
This research demonstrates that interstitial space in textual brand logos - that is, spacious (vs. compact) arrangement of letters - unfavorably influences brand attitude by reducing product safety perceptions. When potential threats are salient, the effect tends to occur within tight (but not loose) cultures, characterized by sensitivity to threats and a need for rigid social structures. When threats are not salient, the effect appears to occur across cultures. Five studies, including lab and field experiments, as well as archival dataset analysis, provide supportive evidence.
The Dark Side of Mobile App Adoption: Examining the Impact on Customers’ Multichannel Purchase
Xian Gu & P.K. Kannan
Journal of Marketing Research, April 2021, Pages 246-264
Abstract:
Firms use mobile applications to engage with customers, provide services, and encourage customer purchase. Conventional wisdom and previous research indicate that apps have a positive effect on customer spending. The authors critically examine this premise in a highly competitive institutional context by estimating how customers’ multichannel spending changes after adopting a hotel group’s app and identifying the factors contributing to such change. Exploiting the variation in customers’ timing of app adoption and using a difference-in-differences approach, the authors find that the effect of app adoption on customers’ overall spending is significant and negative. Additional analyses suggest the possibility that customers who adopt the focal app also adopt competitor apps and therefore search more and shop around, leading to decreased share of wallet with the focal hotel group. The authors also find that the negative effect on spending is smaller for customers who use the app for mobile check-in service than those who use the app for only searching, highlighting the role of app engagement in mitigating the negative effect.