Yes...But Ethical?

Through Predictably Irrational and some other videos we have been watching, much of what we've been covering a similar underlying message: we as consumers respond to small cues and often make irrational decisions due to those incentives.  So recognizing this, we as marketers can utilize this understanding in ways to in the bottom line, make the cash registers ring.  But are we just after their money?   Or is there some other "higher" obligation we have to our customers?  Is using these type of tools in our marketing toolbox ethical? 

From one point of view, yeah it is, because we can argue that consumers get the utility they pay for.  In regards to the wine video, researchers literally witnessed the consumers having more enjoyment out of the "more expensive" wine when they were under the MRI.  So, regardless of the actual quality of product, the consumers are paying for a perceived utility of a good/service and in the end they get it.  The means is irregardless.  They're happy and we're happy.  Where's the problem? 

I think the issue becomes more grey when the consumers are not left off in a better place, like in the Subway scenario.  People actually ate more because they thought they we're eating healthy initially, so the extra eating was "justified."  The policy had a reverse effect.  (On a tangent - it always seemed irrational to me when someone goes to the gym, works their behind off, and then has a cheeseburger with chips and ice cream that evening, because they've "earned it."  Not only is this a nearly-bulimic behavior, it's irrational.)  So, if our marketing decisions are having a negative effect on our customers (who are people!), don't we have a "higher obligation" to their well-being?.  Understanding the cues that influence customer's incentives is a powerful - and humbling - thing.

But there again, there is a flip side of that argument.  The consumers should know what they are getting themselves into.  We are not making the decision for them.  They should know to only eat the sandwich, and ditch the cookies, soda, and chips for their own health.   So, where does the "blame" go - to the person who pulled the lever, or the person who escorted them there in the first place? 

I guess my answer, at least at this moment and on this post, is that yeah... it is ethical, provided we are ethical in our means, and don't intentionally/ aren't aware of causing them to be in a worse position.  Rule #1 - we must be honest and honorable! 

Bend It Like Beckham: a Commentary on Social Decision Making

Bend it like Beckham is more than a simple '00s British rom-com.  

Directed by Gurinder Chadha, there is so much social commentary in this movie, it is almost overwhelming.  Funny in its own right, it depicts commentary on group influences, social norms, family and family decision making, and culture.  Surprisingly enough, it does this through a plot that considers such touchy topics as religion, sexual orientation, female rights, and family structure.   

From left to right: Jewels, Jess, and Joe

Jesminder "Jess" Bharma (Parminder Nagra) is an Indian living in west London.  Due to the rules of the house, she is not allowed to play football, her one true love, because she is a woman.  And per Indian tradition, the woman's role in life is to marry young, keep the house, raise the children, and cook.  How different from the modern Western life.  

It all changes when Jess meets Jewels (Keira Knightley), an English born girl of the same age, who also loves soccer and plays with the local all-girl team Hounslow Harriers. Jewels invites Jess to try out for the team, and the very impressed coach Joe (Jonathan Rhys Meyers) puts her on immediately.  The movie is full of up and downs, highs and lows (including the classic love-triangle), but in the end, everyone is able to break out of their own pressures and work things out.   

Throughout the film, Jess is conflicted between her desire to play football and keep her family happy.  In the end, her family lets their strict rules relax and lets her play.  This provides interesting commentary on the power social pressures can have over us.  Jess' parents in essence do a complete 180 from the start of the movie to the end.

Jess and Tony

The movie also has a surprisingly strong homosexuality commentary.  Jess' best friend Tony, also and Indian, confesses he is gay in the middle of the movie, to Jess wide support.  She encourages him to cast away the pressure to be heterosexual, and embrace his orientation.  Also, Jewel's parents (after overhearing a conversation and misinterpreting it)think that Jess and Jewel are romantically involved.  Jewel's mother goes through a mourning process (she always wanted the "cheerleader daughter" and was never comfortable with Jewel's love of football), but in the end embraces her daughter being gay, even though she finds out in the very end she is not.  

Jess' family during her older
sister's, Pinky, wedding

Not to mention the commentary on the culture differences as shown through the conflict between the Indian culture and the British westernism.  Jess' father was a great criquet player, but stopped playing upon being made fun of because of his turban.  Director Chadha is putting a cruel spotlight on the cross-cultural biases our cultures unfortunately exhibit far too often.  He shows us how it should be by showing her father and Joe (two people of very different backgrounds who had their own share of conflict during the movie) playing criquet together in the end. And although the plot is not carried this far, we can reasonably assume the Jess and Joe's relationship is carried through the years...something Jess' family was not okay with during the beginning. 

So, how does this relate to marketing and consumer behavior?

Director Chadha shows us the power social and family pressures can have on decision making.  The Bharma does a complete 180 from the beginning to the ending.  Jess continually pushes the limit on what her family is comfortable with.  In the end, they find a balance between her love of her Indian roots and of football.  Even though he was uncomfortable at first, her father saw a lot of himself in Jess, and wanted her to have a different future than he had. 

It also shows us how norms can change across generations.  While Jess' parents may have been uncomfortable with too much interaction with the Brits, Jess sees little problem with it and in the end convinces her parents.   

Well done, Mr. Chadha. 

Paying Too Much When Paying Nothing

It's true - I feel like we all know it as both marketers and consumers.  Zero and/or free is a source of irrational excitement. 

Some part of my ear always twitches whenever I hear someone saying something was free.  Perhaps it's due to me being too much of a realist (and economist), but really.  Nothing's free.  That doesn't stop "free things"  from making some pretty big waves in the world of consumer behaviors.  

Take Amazon's free shipping for an example.  After the Super Saver shipping was introduced, Amazon saw increased sales everywhere, except France.  But, it turned out that the French division offered a 1 franc (about $.20) pricing instead of free shipping.  Once it was changed to free, France saw the same sales increases as every where else.   That is amazing.  Free is a cross cultural trigger.

Another example - Costco.  Ask anybody what their favorite part about Costco is, and 75% of the time they'll respond with "Free samples!"  I know people who go to Costco just to see what they're sampling that day.  Oh, and if they just happen to pick up two gallons of milk and some coffee while they're there, that's fine.  

In Predictably Irrational, Ariely theorizes that for normal transactions, we consider both the upsides and downsides.  But when something is free, the downside consideration goes out the window. "Free" makes us perceive what is being traded as immensely more valuable than it really is.   

And because of that, people go out of their way to get free things.  And in a true cost/benefit analysis, they pay too much in opportunity costs to pay nothing. 

While there is a lot of talk among behavioral economists and psychologists whether or not a free item is perceived as junk or not in the long run, the point is it does a great job at making people do things, and in that regard it is probably one of the strongest tools we have in our marketing toolbox.  

Expectations, Queen, and Coffee

Predictably Irrational - man what a book.  And one that honestly makes me...a little uncomfortable.  I try hard to know my tastes in things and to have a developed understanding of the things I enjoy, whether it be music, movies, drinks...the list goes on.

But, some of the examples in the book really make me wonder --> how much of the enjoyment we get out of something is actually due to the thing itself, and how much is due to the enjoyment we imagine we will get out of it? Is there even a difference?

Queen was always ahead of the rest of us...

The book goes into detail about different tests that prove how irrational we are as humans.  The classic example is the wine experiment.  People enjoy wine more when it is given to them in a fine glass than if given in a Styrofoam cup.  In fact, they enjoy the wine more even if they are just told the it is expensive/fine/whatever wine! 

So, how can we relate this to marketing?  I think it shows us that impressions do matter. Packaging matters.  Color matters.  Words matter.  Anything that influences the customer's impression and expectations is extremely important. We as marketers need to understand what image we want our customers to associate with our products.   

For example, provided they are all exactly identical, what are the impressions and expectations you would get if someone handed you an Americano in these three different type of cups? Would they change your enjoyment?

Overvaluing What We Have

We humans are quirky people.  According to his research, Ariely identifies three fundamental quirks of human nature and our feelings towards the things we have: 

1. We fall in love with what we already have.  (Can you say pack rat effect?)
2. We focus on what we might lose, rather than what we might gain.  Thus when we think of selling something, we think about all the things we'll be loosing by getting rid of it (and thus may value it higher than the market does). We do not think about all the hassles of owning it.
3. We assume that other people will see the transaction from the same perspective as we do.  So, we might be confused when a potential customer complains about too high a price - they value it completely differently than we do!

What's more, the more work you put into something, the more ownership you begin to feel for it (The "IKEA effect"), even if you actually do not own the item yet. This is exactly why so many companies can get away with money back guarantees.  The amount of people who default on them is minuscule. People hate to downgrade, even when it may be the best option for them.  

I think this is also why bidding processes work so well.  If you already are comfortable with pledging $x to buy an item, you already start to feel attached to the item, almost like you own it.  Thus if someone ups your bid, you are tempted to keep bidding - it is "yours" after all!  But, if you had proper training on sunk costs and thinking at the margin, maybe you would not have bought that item for much more than it is worth. 

An especially interesting anecdote is that these ownership quirks apply to ideas as well as things.  What is exactly why why we stick to ideologies that no longer seem rational.

ZMET Thoughts & Takeaways

One of the biggest challenges in today's marketing world is to not just discover what people are thinking, but to discover why and how they are thinking. 

And out of the demand for more deep qualitative research, the ZMET was born.  Oh, the ZMET...A lot of surprises in that one.

For those who don't know, the "Zaltman metaphor elicitation technique" (or ZMET) is brilliant method for getting inside our minds. It is a technique developed by Dr. Gerald Zaltman in the early 1990's, and the idea is to deepen our understanding of the subconscious thoughts we have towards a product, a brand, or an experience.  It's a handy tool to examine things like why do we like a certain brand over another, why one product speaks to us, and so on.  
The basic process goes like this: you select a number of images that remind you of whatever the topic is - the more randomly you come across the images the better.  Then, you are interviewed and asked to go in greater depth into the images.  The common threads between the different images you can find is quite astounding.  
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Perhaps the biggest takeaway from the whole experience for my (and bringing it back to marketing) was a new-found appreciation of how much thought smart advertisers put into their ads, and just how powerful a good ad can be.  Going through a ZMET reminded me of how difficult qualitative research is...especially since we are each complex individual human beings.