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Improving Consumer Welfare With Marketing Interventions

Marketing
Published on:
Updated on:
May 18th, 2021

Fei Gao holds a Ph.D. from HEC Paris and has joined Bentley University in the U.S. as an Assistant Professor in 2020. Fei Gao’s dissertation consists of developing marketing interventions to influence consumers judgment, choice, and behaviors. He was awarded the HEC Foundation prize for the best 2020 doctorate thesis at HEC Paris. In this interview, Fei Gao explains the different interventions he studied and developed for various goals, such as altering consumers’ taste judgments of indulgent drinks and foods, reducing consumers’ portion size choices, or motivating consumers to referring products and services with a prosocial incentive scheme.

food delivery app - rido adobe stock

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First, you find that shapes can alter taste judgments. How and when shape–taste correspondences can be applied in marketing designs?

In my first essay, I study whether, how, and when correspondences between marketing techniques and senses affect downstream judgments. Six experiments that investigated shape–taste correspondences show that whether the correspondences influence downstream taste judgments depends on the strength of association in memory between the shape and the taste. 

I find that the shape of a logo (angular vs. rounded) for a bottled water (sparkling, still) or the shape of the product itself (chocolate bar) influences judgments of the water’s carbonation and smoothness and the chocolate’s sweetness and bitterness. 

However, these effects occur only if the shape–taste associative strengths reach a sufficient threshold (application threshold), even if the correspondences have surpassed the activation threshold (statistical significance). The effects are not observable in very young children because they have not yet established shape–taste correspondences, but the associative strengths increase with age, and eventually affect downstream judgments. These processes are highly automatic, occurring even when visuospatial working memory is impaired. Marketers can apply these findings to design packaging that will influence consumers’ expectations and perceptions of product attributes.

marketing experiments
“Making sure the associative strengths of shape–taste correspondences reach the critical application threshold is the key for marketers to leverage product or logo shapes to alter consumer taste judgments.”

 

You also develop a technique to reduce consumers’ choices of food portion sizes. Can you explain what this technique is?

I develop a behavioral intervention aimed at reducing portion size choices based on a theory called “conceptual metaphor theory”. In six experiments, we show that the simple sequential presentation of two food images that move from partial to whole (e.g., a pizza with one vs. no missing pieces) makes people choose a smaller portion size, compared to all other possible sequences. This effect occurs because the partial-to-whole sequence activates the metaphorical concept of fullness, which transfers to judgments of appetitive fullness (called a “metaphor transfer effect”). In other words, seeing the food shape progressing from partial to whole makes people associate with the judgment’s feeling of satiety, and hence decrease the appetite. 

 

food delivery app - HEC PhD Fei Gao
“The simple sequential presentation of two food images that move from partial to whole reduces portion size choice.”

 

This reaction happens even when the sequential images are unrelated to food, and is robust across languages, age groups, food type, and hypothetical and actual food choice contexts. The effect of image sequence on portion size choice is mediated by reduced perceptions of hunger and is attenuated when people cannot capture the dynamic nature of food shape moving from partial to whole. This technique can be implemented by online food-ordering applications and is usable for both commercial and non-commercial situations (e.g., diet apps, school cafeteria apps).

And finally, you study whether, how, and when a prosocial incentive scheme can motivate consumers to participate in online referral programs. What did you find?

In marketing, it is challenging to make people refer products and services. So far, most online referral programs are based on promoting consumers’ self-interests, either by rewarding referrers only, or by rewarding both referrers and recipients. Very few of them employ a prosocial strategy which rewards recipients only (but not referrers). In this third and last paper of the dissertation, I focus on the effectiveness of a prosocial incentive scheme to motivate consumers’ referral behaviors, compared to the commonly used self-interested incentive scheme.

We present five behavioral experiments (including a large-scale randomized field experiment) in a variety of settings. We demonstrate the effectiveness of the prosocial strategy, or altruistic setting, in motivating, not only referrers to make referrals, but also recipients to adopt the referred products. We show that the prosocial strategy can be as effective as the double-sided strategy, which rewards both referrers and recipients, albeit the prosocial strategy only requires half of the marketing expenditure for online retailers. 

 

The prosocial strategy, or altruistic setting of a referral campaign, is effective in motivating not only referrers to make referrals, but also recipients to adopt the referred products.

 

We hence find that referrers’ prosocial tendencies in the prosocial strategy are driven by altruism, while offering extrinsic rewards crowds out referrers’ altruistic motives. Interestingly, we also find that referrers’ altruistic tendencies in the prosocial strategy are inhibited when there is a more costly action for the referral, but not when the social cost of referral behaviors (e.g., interpersonal risk of a potential poor referral for a product whose quality is of great uncertainty) is increased. This shows the asymmetrical moderating roles of action cost and social cost. 

 

marketing referral campaign

 
So what do you recommend for designing such effective prosocial reward strategies?

When online retailers design a referral campaign in practice, they often explicitly highlight the benefits that consumers can receive to motivate them to participate in online referral programs. However, given that referrers’ altruism is an important motive that drives their referral behaviors in the prosocial strategy, framings that highlight extrinsic benefits, such as maximizing collective benefit, may crowd out referrers’ altruistic motives and thus decrease their referral likelihood. In addition, explicitly highlighting the reputational benefit in a referral campaign might crowd out the referrers’ altruistic motives and hence plausibly decrease the effectiveness of the prosocial strategy. 

Given that consumers appear to be more sensitive to action cost than social cost when referring in the prosocial strategy, online retailers probably should first consider the action cost. If the action cost is relatively low, they can consider choosing the prosocial strategy. Otherwise, if the action cost is relatively high, they should avoid using the prosocial strategy. 

To maximize the effectiveness of the prosocial strategy, online retailers should attempt to reduce the action cost incurred at the referral stage as much as possible. For example, online retailers should minimize the steps and simplify the procedure to send out referral messages. 

 

When using prosocial incentive scheme, online retailers should minimize the steps and simplify the procedure to send out referral messages, and consider designing user-friendly interfaces.

 

Online retailers should also consider designing user-friendly interfaces for consumers to participate in online referral programs. Finally, when online retailers are uncertain about whether the product referred can satisfy the recipients’ needs, the prosocial strategy could be the optimal choice relative to the other reward strategies, as long as the action cost is not overly high.

You have joined Bentley University in Massachusetts as an Assistant Professor. What are your new research projects?

Because my research interests lie in the healthcare domain, I have joined the Health Thought Leadership Network (Health TLN) at Bentley University after landing there. The Health TLN at Bentley supports health research through multidisciplinary collaboration.

In one of my recent papers appearing at Memory, collaborating with Prof. L. J. Shrum from the Marketing department of HEC Paris and a Psychology team from the University of Otago, I study the effect of social distancing during the COVID-19 pandemic on people’s mental health and cognition. I find that the relation between social distancing duration and both negative mood and memory errors followed the same U-shaped function: negative moods and memory errors initially decreased as social distancing duration increased, and then at approximately 30 days, they began to increase. Thus, short-term social distancing might benefit psychological well-being and memory performance, but extended social distancing has a negative impact on mood and memory.

 

Short-term social distancing might benefit psychological well-being and memory performance, but extended social distancing has a negative impact on mood and memory.

 

In addition, I am working on multiple projects related to medical crowdfunding. In one project, for example, collaborating with Prof. Xitong Li from the Information Systems and Operations Management department of HEC Paris and Prof. Cathy Yang from the Marketing department of HEC Paris, I find that when creating a medical crowdfunding campaign, compared to the prompt instructing fundraisers to use a photo that indicates the beneficiary under medical treatment, the prompt instructing to use a photo that conveys positive emotions via a smiling face of the beneficiary under medical treatment is more effective in soliciting donations, whereas the prompt instructing to use a photo that conveys positive emotions of the beneficiary in a healthy situation has no such effect.

In another project, collaborating with Prof. Xitong Li, I find that raising funds from the first-person narrative perspective is more effective in motivating donations for female-beneficiary fundraising campaigns, whereas the third-person narrative perspective is more effective for male-beneficiary campaigns. The findings of these projects generate important managerial implications not only for the beneficiaries in need of medical funds but also for the medical crowdfunding platforms and our society.

Interview with Fei Gao based on his current research, “Three Essays on Marketing Interventions to Influence Consumer Judgments, Choices, and Behaviors”, a thesis supervised by HEC Paris professors Tina M. Lowrey and L.J. Shrum. (Summary in French on Thèses.fr here.)  

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