My first entrepreneurial venture in the so-called “sharing economy” happened accidentally. It was 2009, and I had just moved to Cambridge, MA to start at MIT Sloan. I brought my car with me because I was sure I would need it. As it turned out, the only time I used it was to go grocery shopping; mostly it sat idle. Word got around that I had a car, and I soon found myself fielding requests to borrow it from friends. One suggested I charge for the privilege.
The business pages are filled with examples of companies that have taken big hits to their brands because they’ve made marketing decisions that ran afoul of customer expectations. Take Netflix, and its aborted scheme to divide its streaming and DVD video offerings. Netflix could have avoided its embarrassing reversal if it had experimented on this decision before publically announcing the change.
When you buy a house, it would be irrational to search every possible house on the market. Instead, you narrow down your choices based on things like price, location, and number of bedrooms. The same thing happens when you buy a car. You might only look at sporty coupes or hybrid vehicles. Everyone has their own individual methods – or heuristic decision rules — for screening products, usually based on the item’s key features.
This presents a significant question for companies: How do you determine what these decision rules are? Managers are increasingly interested in this topic as companies focus product development and marketing efforts to get consumers to consider their products or prevent them from rejecting the products without evaluation. If they better understood consumers’ heuristic decision rules, they could use this information in the design and marketing of new products.
According to a new study by Catherine Tucker, a marketing professor at MIT Sloan, efforts by the World Health Organization (WHO) to limit junk food marketing to kids may ineffective if they mimic current bans on local alcohol advertising.
From cigarettes, to violent video games, to fatty or sugary foods, Tucker’s research, which examines local bans on alcohol advertising across the US, is applicable to any kinds of restrictions on advertising.
In the case of junk food consumption, WHO recently said that it will use the next U.N. General Assembly meeting in September to discuss limiting the number of ads, and types of ads targeted to children. The measures would likely be similar to those taken in the marketing of alcohol and tobacco, with many countries now limiting or banning advertising of both on television during certain hours. But according to Tucker, laws that restrict advertising only deal with the offline world because towns and states are unable to restrict the content of Internet ads that their residents view. Read More »