In 2005, I was shopping for an acoustic piano. Back then, piano shopping worked like this: Go to a showroom. Play every instrument. Pick one, and negotiate a price. Have it shipped to your house. Everyone understood that a piano store does not maintain much inventory on site.
Apparel shopping was completely different. Shoppers went to the store, tried things on, then paid and left with their purchase in a shopping bag.
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.
We use the Internet to research things all the time. Whether it’s a big purchase like a vacation or something smaller like a pair of running shoes, we often begin with a search for the topic online, eventually drilling down to find specific product reviews and details. But what happens when the pattern of websites we visit triggers personalized online ads that follow us around the Internet? If you’re later reading an unrelated article on a news site, will you really pay more attention to an ad for the specific hotel or pair of shoes you were looking at earlier?
The answer is: probably not. It turns out that when people are at the early stages of researching on the Internet — and haven’t likely developed strong product preferences — they respond better to generalized messages intended for a mass audience. Ads that are too specific aren’t going to convert
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.
On the streets of Cambridge, near the MIT campus, food trucks regularly set up shop selling lunch and snacks to hungry students, staff, and other passersby.
The trucks are mobile and can park in any legal, unoccupied spot. One might think the trucks would want to be where students congregate—perhaps near the MIT Great Dome at the engineering library—or where there is heavy foot traffic, like the Kendall Square subway station.
But while some food trucks do park at these high traffic or high visibility areas, others set up in more remote locations, such as the Technology Square or side streets near Memorial Drive.