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5 Things I Know about Marketing – Rebecca Hamilton, Georgetown University

Rebecca Hamilton is the Michael G. and Robin Psaros Chair in Business Administration and Professor of Marketing at Georgetown University’s McDonough School of Business. Her research focuses on consumer behavior, in particular, consumer decision making.

“Marketing research traditionally involves asking consumers to predict what they will want at a later time,” she explains. “A fundamental assumption of this approach is that consumers will be able to accurately predict their preferences at some time in the future for a product that may not yet exist. It was quite a shock when, early in my research career, I started to find convincing evidence that consumers make some pretty large and systematic errors when predicting their preferences.”

In July, she spoke with Executive Director Kay Lemon about these findings and why they are important for marketers. 

1

More features are not always better (though consumers don’t predict this).

Consumers think very differently about products before and after use. Before they use a product, they think about it abstractly; they tend to prefer a lot of features that can do many things. After they have used a product, their preferences change and they value ease of use much more.

This means that when they are shopping, consumers tend to choose products with many features. However, when they begin using these products, they often feel overwhelmed by the number of features they have to learn, resulting in what my colleagues Debora Thompson, Roland Rust, and I call “feature fatigue.”

When we started this research, we didn’t expect consumers’ preferences to shift so much across these stages of the consumption process. In fact, our research started out as a conversation about product developers not understanding consumers. Roland had just returned from a conference and he stopped by my office to show me the mousepad he had received as a gift. It came with an instruction manual! Not only did it perform the usual function of a mousepad, it also had a clock, a radio, and several other features. Admittedly, these features might come in handy sometime, but most consumers probably don’t want to read an instruction manual before they use a mousepad!  

Initially, we thought there might be a disconnect between the products developers wanted to create and the products consumers wanted to use. However, as we show in our research, it turns out to be consumers themselves who make the misprediction.

2

Going alone can be just as enjoyable as going with a friend (though consumers don’t predict this).

Why are people reluctant to have dinner in a restaurant alone but they feel perfectly comfortable going to the grocery store by themselves? Why do they feel uncomfortable going out to a movie in a theatre alone, yet find it natural to watch a movie by themselves at home?

My colleague Rebecca Ratner and I wondered about this. We conducted a series of studies (in the lab and in the field, in the U.S., China, and India) and we found that it’s both the type of activity—hedonic or utilitarian—and whether it’s public or private that makes the difference: activities that are done for fun and in public are particularly susceptible to this inhibition about “going alone.”

Yet, despite their initial reluctance, we find that doing these activities alone can actually be just as enjoyable for consumers as doing them with a partner. A study we ran at a campus art gallery showed that although they predicted the experience would be less enjoyable, participants who visited the gallery alone found the experience just as enjoyable as those who visited the gallery with a friend.

This suggests some opportunities to make both consumers and firms better off. If we can convince consumers to go to movies and art galleries and restaurants on their own—perhaps by framing the activity as a learning experience—their enjoyment will increase. Moreover, these movie theatres and galleries and restaurants will have more patrons if people are willing to go on their own. 

3

The most similar substitutes for a desired option are not the most satiating (though consumers don’t predict this).

In situations where consumers need to choose a substitute, perhaps because their initial choice is no longer available, or because it’s too expensive or too unhealthy, they tend to choose substitutes that are highly similar to the alternatives that they initially wanted. However, in our research, my colleague Zac Arens and I find that dissimilar replacements are more effective substitutes. That is, consumers feel less subsequent desire for the initially chosen option after they have consumed a dissimilar, rather than a similar, substitute.

Why is this important? We find that people who consume similar replacements are more likely to subsequently consume the initially desired alternative—figuratively, they eat the frozen yogurt and then eat the ice cream anyway—than those who consume dissimilar replacements. This has important implications for consumer welfare as well as for manufacturers and retailers making recommendations to consumers who encounter a stockout or encouraging consumers to switch brands.

4

As consumers, it is hard for us to imagine how we will feel in a different environment.

Why do we observe these systematic errors when consumer predict their preferences? We’re often influenced by the context or environment around us, and this context changes as we go through the decision-making process. It’s hard for us to imagine how we’ll feel when we’re in a different environment.

One reason that we have trouble making predictions before we consume a product or engage in an activity is that we tend to think more abstractly when we’re further from the product or experience. During consumption, we think more concretely, and this shift in our mindset can change the relative importance of things like extra features or the similarity of features to the option we originally wanted.

5

For marketers and researchers, choosing the right research method for the question is critical.

If consumers often make incorrect predictions about their future preferences, how can we, as marketing researchers, predict their preferences? It’s critical to choose the right research method to answer the question we want to answer.

In my consumer behavior class last spring, I had my students read a journal article claiming that targeting college students on Facebook was ineffective because in the authors’ survey of college students, not one of the respondents reported being influenced by Facebook ads. Yet Facebook is bringing in billions of dollars in ad revenue. Why do the results of the survey predict that Facebook ads will be ineffective while business decisions seem to suggest that Facebook ads work?

The authors were using the wrong method to answer their research question. Asking people directly whether they are influenced by ads on Facebook is not a good choice—people may not know they are being influenced, and they may not want to admit they are being influenced by Facebook ads. Thus, using a direct research method like a survey, interview, or focus group is not a good choice. A better approach is to use an indirect method, like an experiment. For example, an experiment could expose one group of consumers to an ad and another group of consumers to no ad and then compare their subsequent behavior. This kind of indirect approach allows us to determine whether consumer behavior is being influenced, even if consumers don’t know (or won’t admit) that it is.

It’s critical to choose the right research method for the research question you are trying to answer. In our research, we’ve uncovered prediction errors by asking questions indirectly – using experiments – and we’ve shown that consumers actually prefer simple products once they have had a chance to use them, that they actually enjoy themselves when they go to an art gallery alone, and that they actually want an initially desired item less after consuming a dissimilar than a similar substitute. In each of these cases, asking consumers directly gives us the wrong answer!

Related links

Arens, Zachary G., and Rebecca W. Hamilton (2016), “Why Focusing on the Similarity of Substitutes Leaves a Lot to Be Desired.” Journal of Consumer Research 43 (October).

Hamilton, Rebecca W., and Debora V. Thompson (2007), “Is There a Substitute for Direct Experience? Comparing Consumers’ Preferences After Direct and Indirect Product Experiences.” Journal of Consumer Research 34 (December), 546-555.

Ratner, Rebecca K., and Rebecca W. Hamilton (2015), “Inhibited From Bowling Alone.” Journal of Consumer Research 42 (August), 266-283.

Rust, Roland T., Debora V. Thompson, and Rebecca W. Hamilton (2006), “Defeating Feature Fatigue.” Harvard Business Review 84 (February), 98-107.

Thompson, Debora V., Rebecca W. Hamilton, and Roland T. Rust (2005), “Feature Fatigue: When Product Capabilities Become Too Much of a Good Thing.” Journal of Marketing Research 42 (November), 431-442.

 

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