|
Feeling Blue?
New insight to predicting consumer emotions
ScienceDaily - It’s no secret that emotions
influence peoples’ decisions about what, when and how they buy.
Whether choosing between a movie and a play, deciding whether to
attend a sporting event shortly before an important event or
selecting an indulgent breakfast treat in anticipation of a
tough day at work, consumers’ choices are often guided by how
they expect their purchase will make them feel.
New research by Jane Ebert, a professor of marketing at the
University of Minnesota’s Carlson School of Management, reveals
that how we go about predicting our emotions can lead to very
different outcomes.
In a series of four studies, Ebert and co-authors Daniel Gilbert
(Harvard) and Timothy Wilson (University of Virginia) use
methods of prediction called forecasting and backcasting to show
how they lead to quite different outcomes. Consumers can predict
their feelings following an event by forecasting--first
imagining their feelings when the event occurs (“I’ll be very
unhappy if I see the Red Sox lose today”) and then considering
how those feelings might change over time (“…but I’ll probably
feel better in a few days, in time for my birthday party”).
Alternatively, they can predict their feelings following an
event by backcasting-first imagining their feelings in a future
period (“I’m going to be happy in a few days because my birthday
party is coming up”) and then considering the effects of the
event (“…and if I see the Red Sox lose today it won’t change
that much”).
For example, a person who sees an ad for a Caribbean Cruise in
the dead of winter would expect to enjoy the trip more if the
copy read, “Winter getting you down? How’s it going to feel
after three more weeks of this? Wouldn’t a sun-filled tropical
vacation help? Book one today,” than if the ad simply touted the
trip before invoking the customer’s feelings. By first getting
buyers to think ahead to more winter, the advertisement actually
makes them consider the effects of the vacation on their feeling
more then if they just think about the vacation.
People make a lot of decisions based on how they expect their
choices to make them feel. “We found that we can easily change a
consumer’s expectations of those feelings,” said Ebert. The
differences in the information that forecasters and backcasters
consider and the predictions that they make suggest that simply
changing the order in which consumers think about a potential
consumption event and how they expect to feel in the future can
markedly change expectations about their feelings as a result of
the event.
Jane Ebert’s teaching and research focuses on understanding how
marketers and policy-makers can increase the influence of
consumers’ future goals (such as good health and a comfortable
retirement) on their current decisions and behaviour.
Journal reference Forecasting and Backcasting: Predicting the
Impact of Events on the Future. Journal of Consumer Research,
(in press) . Adapted from materials provided by University of
Minnesota, via EurekAlert!, a service of AAAS.
****
Asia Pacific spend on fitness and
wellness to see least cut back in 2009
While Asia/Pacific consumers are tightening their belts in 2009
and cutting back on spending, consumer spending on fitness and
wellness is set to hold up even in these uncertain economic
times, according to the latest Index from MasterCard Worldwide.
The results of the MasterCard worldwide Index of consumer
purchasing resilience show that Fitness and Wellness, with a
Resilience Index score of 78, is the category that is most
resilient to spending cutbacks among those who said they would
purchase from the category in the next six months.
The index is calculated based on a consumer survey on purchasing
priorities across a range of categories. The minimum index score
is zero, and indicates that consumers who plan to purchase from
this category do not deem the category as important, making the
category extremely vulnerable to any spending cutbacks over the
next six months. A maximum score of 100 indicates that consumers
who plan to purchase from this category rate the category as
very important, making the category extremely resilient to any
spending cutbacks over the next six months. The survey covers
6,019 consumers across 14 markets, and was conducted between 1
and 29 September 2008. The Index and its accompanying reports do
not represent MasterCard financial performance.
The property and renovations segment is also holding up well,
with the second highest Resilience Index score (75) among
consumers who plan to make purchases in the next six months.
Dining and Entertainment (Resilience Index score: 63), Personal
Travel (63) and Fashion and Accessories (59), which ranked among
the top planned expenditure items of Asia/Pacific consumers, are
the other categories which showed resilience.
In terms of general purchasing resilience, the Resilience Index
score for consumers across Asia/Pacific is 67, with consumption
priorities in China (Resilience Index score: 81) being the most
resilient in Asia/Pacific, followed by those in Japan (76),
Indonesia and India (74 each). “In such times, many companies
are keen to ascertain the spending patterns of consumers and the
Resilience Index has been developed to provide valuable insights
on consumers’ purchasing resilience in key discretionary
categories.
Dining and entertaining, which are integral to the urban middle
class lifestyles, are among the most robust spending priorities
in Asia/Pacific. Spending on fitness and wellness has become
increasingly important, especially for the younger and better
educated consumers, and therefore it is not surprising that this
category has emerged with the highest Resilience score,” said Dr
Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard
Worldwide.
“In general, the spending priorities of the Chinese and Indian
middle class consumers are relatively resilient; reflecting that
their disposable income has so far remained healthy,” he added.
While Chinese consumers are most resilient in the areas of
Fitness and Wellness (Resilience Index score: 88), Japanese
consumption priorities are most resilient in Dining and
Entertainment (81). Indonesian consumption priorities are most
resilient in terms of Property and Renovations (80), while
Indian consumption priorities demonstrate the most resilience in
their spending on Fitness and Wellness (90).
The MasterCard Worldwide Index of Resilience is the latest
addition to the MasterCard Worldwide Index suite of research
products in Asia/Pacific. The other key MasterCard Worldwide
Index research products include the MasterCard Worldwide Index
of Consumer Confidence, the MasterCard Worldwide Index of
Consumer Purchasing Priorities, the MasterCard Worldwide Index
of Women’s Advancement, the MasterCard Worldwide Centers of
Commerce and the MasterCard Worldwide Emerging Markets Index.
Besides the suite of Indexes put forth by MasterCard, MasterCard
also develops Insights reports as part of its series of ongoing
research and analysis of business dynamics, financial policies
and regulatory activities in the Asia/Pacific region.
Sixty-three reports have been produced since 2004.
Indian consumers demonstrated the most
resilience in spending on Fitness and Wellness (Resilience
Index score: 90), followed by Chinese consumers (88) and
consumers in New Zealand (79).
Chinese consumption priorities in Property and Renovations
(Resilience Index score: 85) are most resilient, followed by
Indian consumers (83) and Indonesian consumers (80).
Indonesian consumers demonstrate the most resilience in
spending on Fashion and Accessories (Resilience Index score:
76), followed by consumers in China (75) and India (66).
Japanese consumption priorities in Dining and Entertainment
are most resilient (Resilience Index score: 81), followed by
Chinese and Indonesian (79 each) consumers.
Chinese consumers demonstrate the most resilience in
spending on Personal Travel in Asia/Pacific (Resilience
Index score: 75), followed by consumers in New Zealand (74)
and Japanese consumers (71).
Only two markets across Asia/Pacific demonstrated resilience
in spending on Consumer Electronics: Indonesia (Resilience
Index score: 60) and Vietnam (58).
****
Adworld has new king in Sir
Martin Sorrell NEW YORK (AdAge.com) -
There’s officially a new world order in Adland. WPP, the British
ad giant led by Martin Sorrell, last week moved ahead of
U.S.-based Omnicom Group as the world’s largest owner of
agencies based on reported revenue. But exactly what the total
cost will be for Sorrell, who has racked up the largest debt
load in his sector in his quest to become the biggest player,
remains unclear.
The parent of global ad networks such as Ogilvy & Mather and JWT
and other marketing, media and PR companies such as Wunderman,
MindShare and Burson-Marsteller posted $13.6 billion in revenue
for 2008. It managed to squeeze past Omnicom -- which reported
2008 revenue of $13.4 billion -- thanks to the inclusion of two
months of revenue from Taylor Nelson Sofres, the market-research
firm WPP snapped up in a $1.9 billion deal last October. Were it
to include a full year of TNS revenue, WPP said, it would have
reached $15.4 billion in revenue last year.
In recent years, Sorrell has used the acquisitions of companies
such as TNS, Grey Global Group and 24/7 Real Media to catch up
with Omnicom -- deals that have made WPP the most debt-laden of
the agency holding companies. WPP ended 2008 with a total debt
of $8.2 billion, including debt WPP took on in its TNS
acquisition. WPP’s total debt increased last year by £2.3
billion or $3.4 billion more than the total debt load on the
books of rival Omnicom ($3.1 billion). Aggravating that figure
is some $800 million of debt that WPP acquired with the purchase
of TNS.
In November, Standard & Poor’s moved WPP’s credit rating down a
notch to BBB, a low investment grade. But analysts are still
generally friendly to the company, with 15 of 26 rating it a
‘buy.’ Amid the worsening economy, WPP instituted a stringent
global hiring freeze last fall, though Sorrell has since said
the holding company would consider adding head count in some
regions and disciplines that are seeing an uptick. Still,
insiders at certain WPP-owned shops have privately speculated
that corporate concerns about debt are preventing agencies from
investing in talent even when new business comes in.
Sober Sorrell
Needless to say, Mr. Sorrell didn’t precisely take a victory lap
in a conference call with investors last week. There is, after
all, that recession thing to worry about. He said, “I’d just
like to say that in the 25, 30 years that I’ve been in the
business, I have never seen anything quite like this.”
Despite the tumult, he remained upbeat: “Although the economic
gloom has heightened recently, with further earnings
disappointments, surprise dividend cuts, continued financial
restructurings and rights issues, we still believe there will be
a recovery of sorts in 2010.”
Mr. Sorrell’s optimism in the face of economic adversity is no
surprise. After all, he and WPP have risen from the ashes
before. On the heels of a recession in the early ‘90s, WPP’s
stock plummeted, investors fled and some suggested Mr. Sorrell
would be pushed out of the company. Members of the investment
community at the time deemed the company on the verge of a
collapse.
If the WPP chief’s predictions are correct, the current
holding-company landscape is only temporary, and will see a
shake-up again with the consolidation of WPP’s rivals. “It is
almost an inevitability that Havas and Aegis will get together,
and indeed that [Interpublic] will get together with somebody at
some point in time,” Mr. Sorrell said on the conference call.
Interpublic Group of Cos., the original agency holding company,
ranked No. 1 among the Big Four ad giants as recently as 2000.
It fell to the No. 2 slot, behind Omnicom Group, in 2001, and
then third, behind WPP, in 2003. Five years later, Interpublic
remains in third place. For 2008, it posted an impressive 6.2%
jump in revenue to $7 billion, but that left it only a breath
ahead of French conglomerate Publicis Groupe, which reported
2008 revenue of $6.9 billion. **** |
