Third Law of Branding (Perceived Quality)

Our third law of Branding concerns quality and more of intrinsic motivation factors. Since this law deals with intrinsic motivation factors, it is very effective and powerful.

Even though, quality alone is not known to be an effective Branding factor, it sure makes a big difference.

Perceived Quality of Product ==== > Quality of Branding

Since we have introduce the word perceived in front of the word quality, we need to examine the concept a bit in detail. We could have said:

Quality of Product ==== > Quality of Branding

However, the perception plays an important role. The perception is that the product adds something to the buyer.

The product comes with an emotional addition. The product and the buyer total to something more; a synergistic effect. Of course the better the quality of the product the better quality of the owner (buyer) of the brands.

The perception is mixed with a vision the buyer likes to have of himself/herself. This vision is vision of the buyer and who the buyer can become as his/her identity.

In some cases a Brand is of great quality (Rolex Watches), however, that is not the only reason one buys Rolex. Sometimes one just buys Rolex, because it associates with royalty, status, and much much more. This example clearly deals with the intrinsic motivation factor. Products that are aimed at making a person more autonomous (even the perception of autonomy) are more of intrinsic motivation factors. Another good example is advertising for a car or freedom you get by driving a car.

Most Brands that we buy contribute to:

The concept of courage (intrinsic)

The concept of confidence (intrinsic)

The concept of compassion (intrinsic)

The concept of idealized behavior and idealized person to be (intrinsic)

The self esteem (intrinsic)

The achievement of an ideal image (intrinsic)

Consider the concept below:

Different Image ==== > Different Behavior

We all want to change our behavior sometimes. The question is how. Brands have convinced us (maybe even for wrong reasons) that they can change our behavior.

Low Self Esteem ==== > Feeling of Inferiority ; Unworthiness ; Incompetence ; Inadequacy ; Stress ; Negativity ; Pessimism

Most people do anything they can to remove the feeling of self doubt, fear of rejection and fearfulness.

Wrong or right, the fact is what others see in the "buyer" are perceived as self image.

Owning Brands ==== > Self Image Modification ; High Self Perception ; Being in Charge ; Being Valued ; Being Respected

Owning Brands brings recognition, self importance, making people smart, and allows to achieve a great self reputation in one's own image.

Owning Brands ==== > Achieving Positive Mental and Emotional Attitude

Owning Brands ==== > Feel Good About ... ; Being in charge of life ; Master of own destiny ; Autonomous

There is also a law of Belief that says whatever one believes becomes reality. The law of Attraction says being positive, optimistic, enthusiastic, radiates mental energy. At the end of the day, if the owner and the Brand (Cartier watch) can achieve the law of Belief and the law of Attraction, there will be positive results after all.

People respond to each other based on the attitude they have toward each other. The way one person treat another person is the reflection of the way he/she thinks about himself/herself.

Owning Brands ===== > Positive Imaging ; Improvement in Mental Picture ; Upbeat ; Encouraging ; Associating with successful people ; Improvement in choice of reference groups ; enhances your values ; creates a better vision ; enhances your principles, integrity, love of life, courage, honesty, excellence, responsibility, and to become a better person

It is sometimes very advantageous to own a Branded product if there is so much to gain psychologically. Any advertising that influences intrinsic motivation factors in buyers is extremely effective.

Study Spotlights Marketing's Impact on the Brain

By Steven Reinberg
HealthDay Reporter

(SOURCES: Antonio Rangel, Ph.D., associate professor, economics, California Institute of Technology, Pasadena; Jon Hanson, J.D., professor, law, Harvard Law School, Boston; Nick Lee, Ph.D., senior lecturer, marketing group, Aston Business School, Birmingham, England; Susan Linn, Ed.D., associate director, Media Center of Judge Baker Children's Center, and instructor, psychiatry, Harvard Medical School, Boston; Jan. 14-18, 2008, Proceedings of the National Academy of Sciences, online)

MONDAY, Jan. 14 (HealthDay News) -- It's a little secret that many marketers would rather keep secret: People often think that if something costs more, it's got to be worth it.

But that's not always true, suggests a new study that used high-tech brain imaging to illustrate its point.

Researchers from Stanford University and California Institute of Technology found that inflating the price of a product -- in this case red wine -- led to increased activity in a region of the brain that "encodes" subjective pleasantness. The study results offer insights into the "neural" effects of marketing, suggesting that the perceived price of a product affects a person's enjoyment of that product, the scientists said.

Using functional magnetic resonance imaging (fMRI), the researchers found the specific area of the brain -- the medial orbitofrontal cortex -- where that perception of enjoyment lies. This ability to manipulate basic biology to increase perceived pleasure is an example of what is called "neuromarketing," the researchers said.

"We find the more expensive the wine, the more activity we find in the medial orbitofrontal cortex of the brain," said Antonio Rangel, an associate professor of economics at Cal Tech.

"I can change the activity in the part of the brain that encodes for subjective pleasantness by changing the price at which you think the product is sold, without changing the product," he added.

The findings are published in this week's online edition of the Proceedings of the National Academy of Sciences.

In the study, Rangel and his colleagues had 20 people rank their enjoyment of differently priced red wines while undergoing functional magnetic resonance imaging. But there was a catch: Two of the wines were presented twice, once with a high price tag and once with a low price tag.

The researchers found that people said they liked the "expensive" wine more than the "cheaper" one. And the fMRI scans showed that when people drank the "expensive" wine, they had more activity in the medial orbitofrontal cortex, which reacts to experienced pleasantness for odors, taste and music.

There has been a belief that the pleasantness associated with a product depends solely on the product, Rangel said. "This suggests that this is not the case. The beliefs about what you are experiencing also affect how pleasant that experience is," he said.

Rangel thinks that incorporating factors other than the product itself into the experience of that product is part of human nature. "It is something that can be exploited by marketing but has not been created by marketing," he said.

For Rangel, neuromarketing is a scientific -- not a commercial -- pursuit. "We want to understand how environmental variables such as pricing affect the computations that the brain makes to make decisions," he said.

Jon Hanson, a professor of law at Harvard Law School, said the new study spotlights the way marketing can manipulate feelings about a product to influence buying choices, "which we tend to defend as rational and reasoned."

"This new study seems to shed some valuable light on some of the neural mechanisms behind what makes something seem attractive, flavorful, or pleasant, and may be important in providing additional evidence of just how the Herculean investments in marketing pay off by operating beneath the radar of the more conscious, reasoning components of our minds," Hanson said.

"In addition, it may suggest one of the ways in which consumers deal with the cognitive dissonance of paying a steep price for something -- 'We enjoy our purchase, more precisely, because we paid more,' " he said.

Another expert sees neuromarketing as a way to understand how people think and to make marketing more efficient.

"The use of neuroscientific methods and paradigms to help answer questions of marketing theory has the potential to revolutionize our understanding of the relationship between organizations and consumers," said Nick Lee, a senior lecturer in the marketing group at the Aston Business School in Birmingham, England.

"This revolution is not necessarily about helping firms to sell more products or control the mind of the consumer but to help scholars understand how marketing works," Lee added. "Of course, it will also enable firms to market more efficiently, hopefully reducing wasted revenues and further benefiting economic performance."

But another expert doesn't see neuromarketing as a benign science.

"Marketing can trump our senses," said Susan Linn, an instructor in psychiatry at Harvard Medical School and associate director of the Media Center of Judge Baker Children's Center. "Using medical equipment and medical technology to help marketers do their job better is very troubling."

Linn thinks the study findings could help marketers find new ways to manipulate consumers by pinpointing their marketing more accurately. "This is particularly troubling with children," she said.

"The marketing industry has done a good job convincing people about their free will and that they are making logical, well-thought-out decisions about the things that they buy," Linn said. "Studies like this suggest that, in fact, there are lots of things that influence our responses to marketing and our choices of products that are completely irrational that we might not be aware of."

More information

For more on free will, visit Stanford University

How to imbue products with symbolic meaning

Many people pay silly money to wear a particular logo or a designer brand. Of course, a designer outfit doesn't keep you any warmer or dryer than an unbranded one, but functionality is only part of the story. Designer products say something about you – you are a trendy, sexy or sophisticated person. Brands help us to express who we think we are and who we want to be.

Big name brands are an integral part of our lives, says Davide Ravasi, associate professor in the Institute of Strategic Management of Bocconi University, Italy. Whether its Levi jeans, BMW cars or Nokia phones, we know the brands we like. These are more than products; they are symbols, or in other words, they are objects carrying meaning.

In a recent ESF Exploratory Workshop convened by Ravasi, scholars of various disciplines within the social sciences discussed how symbolic attributes of products affect their adoption and evolution.

The idea that goods and services hold symbolic as well as functional value has been recognised for decades, but is still poorly understood in the context of business management. Management theory and practice tends to focus on business processes: the most efficient and economic way to deliver good quality, functional products. Indeed, management studies prefer to shy away from “wishy-washy” topics like branding, considering it more of a sloppy marketing concept.

“Branding is just one way of endowing products with meanings. But there are others, such as product design or even process innovation.” explains Ravasi, “However, little research has been done on how business processes and activities, like customer service and production, can systematically create symbolic value in products. This is such an unexplored field that we don't even have our terms and definitions and methodologies agreed on yet. The workshop was just the beginning of researchers in this field to come together and start work on developing a common language and concepts.”

The importance of this research agenda cannot be underestimated. Europe has already lost its competitive advantage in terms of cost, quality or product innovation. Goods from China and other emerging economies are now cheap and of high quality. Moreover, manufacturers in these countries are beginning to develop new products and innovate, not just copy western goods.

Major technological breakthroughs and cheaper manufacturing are not the only way to grab market share. The mere redesign of the outer shells of hearing aids – introducing sleek lines, translucent plastics and a range of colours and patterns instead of the usual flesh colour – helped Oticon, a Danish leader in the production of hearing aids, relieve hearing-impaired children from the psychological burden associated with carrying a hearing aid. Ten years after its launch, OtiKids were still the hearing aid of choice of most support groups for parents of hearing impaired children.

Many European companies evidently know about good design – design that goes beyond ergonomics. Consequently European goods and services can still compete at the symbolic level, offering prestige, social status and fulfilling experiences to consumers. “You can encode meaning into products through careful design that will elicit certain interpretations in people,” says Ravasi,” and we want to understand the business processes that enable this encoding to happen and how to increase the likelihood that certain forms will be decoded in particular ways.”

One of the first avenues of research will investigate the role of “cultural capital”, one of the first technical terms agreed on by the researchers. Cultural capital is a special knowledge that some companies have about how goods are embedded in cultural conventions and expressions, and how they relate to consumers' lifestyles. It seems to play a critical role in how businesses understand the connections between objects and their meanings. But no-one really understands how cultural capital is accumulated or deployed in organisations when designing new products.

Another idea that was considered during the workshop was the crucial role of consumers in shaping symbolic value and at the importance of incorporating more explicitly consumers and consumption in managerial models.

“As a group of scholars we are trying to generate new forms of management knowledge, giving enterprises more awareness of the importance of symbolic value so they do not underestimate the resources and competitive advantage they have,” Ravasi concludes.

The workshop titled Exploring Symbolic Value Creation In Organizations was held on 6-9 September 2007 in Milano, Italy. Each year, ESF supports approximately 50 Exploratory Workshops across all scientific domains. These small, interactive group sessions are aimed at opening up new directions in research to explore new fields with a potential impact on developments in science.

You are what you buy: How different consumer types shop

What you buy says a lot about you, according to a new study from the June issue of the Journal of Consumer Research. Consider this goal: to spend more time with your family. If you seek out products that expand the amount of quality time you have to share – say, a football to throw around in the yard – you’re a “promotion-focused” consumer. Alternatively, if you are “prevention-focused,” you’ll seek out timesavers, like a new dishwasher, that don’t reduce the amount of time you have to spend with your family.

“We extend this line of research by identifying for the first time the cognitive process that appears to underlie these regulatory focus effects. We propose that because individuals who adopt a promotion focus concern themselves with positive outcomes, they are led to perceive the surrounding environment as safe and benign,” write Rui Zhu (University of British Columbia) and Joan Meyers-Levy (University of Minnesota).

“In contrast, individuals who adopt a prevention focus concentrate on negative outcomes, which may alert them that the environment is threatening and that specific actions are needed to ensure against negative outcomes,” they explain.

In two studies, the researchers extend understanding of these consumer impulses by examining how promotion- and prevention-focused individuals respond to advertisements. They found that individuals who adopt a promotion focus think more about the relationships among products and have an easier time connecting many disparate elements into higher level abstractions. In contrast, prevention-focused consumers respond better to unambiguous advertising, pay more attention to specific pieces of data, and are more sensitive to detail.

Rui (Juliet) Zhu and Joan Meyers-Levy, “Exploring the Cognitive Mechanism that Underlies Regulatory Focus Effects.” Journal of Consumer Research: June 2007.

Contact: Suzanne Wu
swu@press.uchicago.edu
773-834-0386
University of Chicago Press Journals

Threats to hope -- Desperation affects reasoning about product information

When our hopes are threatened, we often turn to the marketplace for help. Can’t fit into the gorgeous outfit you bought for your high school reunion" Trying to get pregnant" Want a bigger house but afraid you can’t afford it" A new study by researchers from University of Southern California argues that in situations like these, consumers are susceptible to “motivated reasoning.” We believe what we want to believe about products that promise to help – even if the arguments don’t come from credible sources.

Hope is threatened when people lose confidence that what they yearn for is possible, and this loss may result in a range of seemingly irrational behavior. Specifically, consumers interested in products that purport to enable goal-attainment will:

- Search for information from product-favorable information sources (including advertisements) - Regard favorable information as more credible - Be less discriminating about low-credibility message arguments - Be more likely to judge the product as effective

In the August issue of the Journal of Consumer Research, USC researchers Deborah J. MacInnis (Professor of Business Administration and Vice Dean of Research), David W. Stewart (Professor of Marketing and Chair, Dept. of Marketing), and their late colleague Gustavo De Mello outline three studies that demonstrate these phenomena.

For example, the first experiment asked ninety-nine undergraduates in the midst of mid-term exams to participate in a purportedly unrelated study conducted by the Office of Student Affairs, asking students to report on a variety of things, including how confident they felt about getting good grades.

The students were then asked to participate in an “unrelated” study that asked them to evaluate a new product – a memory booster. They were given background information from a manufacturer’s brochure (a favorable source) or from a newspaper article (an objective source), which they could access by clicking on a computer screen.

While both confident students and insecure students accessed the same number of pieces of information before making a judgment on the product, insecure students searched for more information from the favorable source than confident students and ended up rating the memory booster as more effective.

Similarly, the researchers found in subsequent experiments that less confident students had a more difficult time than more confident students differentiating between credible claims and weak claims for products that claimed to help meet a goal.

“The role of confidence in directing behavior, though widely recognized in psychology, has received scant attention in the consumer behavior literature,” write the authors. “Weight loss products, alternative medicines, and dietary supplements, are examples of product categories for which reduced confidence may be relevant and for which this illusion of control may be highly prevalent.”

Gustavo De Mello, Deborah J. MacInnis, and David W. Stewart, ”Threats to Hope: Effects on Reasoning about Product Information.” Journal of Consumer Research: August 2007.

We are family -- but advertisers often miss the point

Even though most Americans think of themselves as part of a family – and many list “being a family” as a top priority – very little is known about how membership in this collective actually affects consumer decisions, from choosing a cell phone plan to remodeling the kitchen to how we display treasured keepsakes.

“Highlighting the interplay of individual, relational, and family identities and practices can shed light on important contemporary family challenges,” explain Amber Epp (University of Nebraska) and Linda Price (University of Arizona).

Some of these choices include how to sustain family togetherness when people move far away, how to juggle work and family, and how to create a collective identity following a divorce or a remarriage.

In the June 2008 issue of the Journal of Consumer Research, Epp and Price challenges researchers in consumer behavior to think of how consumption patterns may be guided by a desire to build a family identity. This includes the things we buy, how we spend our time, and the services we use.

For example, Epp and Price point out that vacations are often thought of as an opportunity for a family to spend quality time together and build group memories. Studying only the individual’s role in purchasing behavior overlooks that the behavior is driven by a desire to emphasize the family unit. Similarly, families may use vacations to strengthen particular relationships within the family such as father-son or child-grandparent relations, Epp and Price note.

“Consumer researchers consistently conclude that firms should make decisions about positioning strategies and who to target based upon individual family members’ decision roles and relative influence in households,” Epp and Price explain.

They continue: “However, this completely misses the point . . . firms might gain more value from positioning and targeting based on the idea that products, services, and brands act as resources for achieving relational and family identity goals.”

Amber M. Epp and Linda L. Price, “Family Identity: A Framework of Identity Interplay in Consumption Practices.” Journal of Consumer Research: June 2008.

About the Journal of Consumer Research: Founded in 1974, the Journal of Consumer Research publishes scholarly research that describes and explains consumer behavior. Empirical, theoretical, and methodological articles spanning fields such as psychology, marketing, sociology, economics, and anthropology are featured in this interdisciplinary journal. The primary thrust of JCR is academic, rather than managerial, with topics ranging from micro-level processes (e.g., brand choice) to more macro-level issues (e.g., the development of materialistic values).

What's not to like? Why fondness makes us poor judges, but dislike is spot-on

How good are we at guessing other people’s likes and dislikes? Ever bring a favorite dish to a potluck – only to watch it go uneaten? Or receive an unwelcome shock when a cherished product is discontinued for lack of sales? People have the tendency to assume the whole world likes what we like, reveals new research from the June 2008 issue of the Journal of Consumer Research. However, we don’t generalize the same way when it comes to things we hate.

“The degree of false consensus depends on whether a person likes or dislikes an item,” explain Andrew D. Gershoff (University of Michigan), Ashesh Mukherjee (McGill University), and Anirban Mukhopadhyay (University of Michigan).

Participants in one study were asked to choose a movie they like. They were then asked to guess what percentage of their peers liked the movie as well. On average, people estimated that 51.2 percent of other people also liked the movie, a significant overestimate. They also estimated that only 18.2 percent of people, on average, disliked it – a reflection of the belief that more people agree with us than disagree.

In contrast, when asked to choose a movie they dislike and make the same estimate, participants were less self-centered: they thought people would agree and disagree with their opinion in roughly the same numbers.

As the researchers explain, “This finding arises from a deeper truth about the human mind, namely that things we like are seen to contain primarily good characteristics, while things we dislike are seen to contain a mix of bad, neutral, or good characteristics.”

We might even like everything about an item – except for one unforgivable, deal-breaking trait.

“This difference leads us to make more exaggerated predictions that people like the same things we do, compared to predictions that people will dislike the same things that we dislike,” the researchers add.

Another study of ice cream sundaes found that those who liked a certain flavor combination – say, mint ice cream with walnuts and hot fudge – overestimated that people would share their fondness for the sundae by 9.9 percent. Those who disliked it only overestimated that people would share their repulsion by 0.8 percent.

They conclude: “Our research indicates that decision-makers in such situations need to be highly sensitive to the danger of over-projecting their own likes, more so than their own dislikes.”

Andrew D. Gershoff, Ashesh Mukherjee, and Anirban Mukhopadhyay, “What’s Not to Like" Preference Asymmetry in the False Consensus Effect.” Journal of Consumer Research: June 2008.

About the Journal of Consumer Research: Founded in 1974, the Journal of Consumer Research publishes scholarly research that describes and explains consumer behavior. Empirical, theoretical, and methodological articles spanning fields such as psychology, marketing, sociology, economics, and anthropology are featured in this interdisciplinary journal. The primary thrust of JCR is academic, rather than managerial, with topics ranging from micro-level processes (e.g., brand choice) to more macro-level issues (e.g., the development of materialistic values).

First Law of Branding ; Second Law of Branding ; Third Law of Branding ; Fourth Law of Branding ; Fifth Law of Branding ; Sixth Law of Branding ; Seventh Law of Branding ; Eighth Law of Branding ; Ninth Law of Branding ; Tenth Law of Branding ; Eleventh Law of Branding ; Twelfth Law of Branding