An Unexpected Product Benefit Can Be a Powerful Marketing Tool
As companies test a new product, they often learn that it can deliver unexpected benefits. This very famously happened in the case of Viagra, a product originally developed to treat cardiovascular problems. During the first human trials of the compound, a study nurse reported that male subjects would frequently lie on their stomachs on the examination table, trying to hide their erections. The compound did indeed dilate blood vessels, just not where expected.
It is common for companies to discover unintended benefits to their products after launch, once customer reports start flowing in. This is particularly true in the health and beauty industry. Just read online reviews for omega-3 supplements and you will find people claiming the heart health supplement helped them with a wide range of issues, from brittle nails to weight loss. Similarly, Botox was approved for cosmetic use in 2002, but users soon started reporting that the injections improved their migraines as well. It was licensed for this type of treatment in 2010.
Research has shown that consumers value a product’s benefits more when they believe a firm was intentional about creating them. For instance, if a company launches a programme that accidentally helps the environment, it is less likely to get praise than if the programme was expressly designed for that purpose. In law, premeditated crime is punished more harshly than an involuntary act that led to the same result. Intentions matter, because they are associated with effort, and effort with value (whether positive or negative).
However, another stream of research suggests that an unexpected benefit can pique consumers’ interest and lead them to anticipate other potential benefits from the product. This has a biologic basis: Studies on mammals (from rats to humans) have shown that receiving an unexpected reward (such as a squirt of juice instead of plain water) fires up neurons in the regions of the brain associated with reward anticipation and seeking. In a way, a nice surprise is perceived as a sign of more good things to come.
Busy people more likely to make healthier choices, study found
People who perceive themselves as busy are more likely to make healthier choices, a new study has shown. Although we complain about being too busy in today’s fast-moving world, it has some advantages. Individuals who perceive themselves as busy are more likely to delay gratification. They subsequently make decisions that benefit them in the long-term. This is what researchers from the global business school INSEAD, Temple University, and HKUST have found.
Regarding the choices we make every day, Amitava Chattopadhyay said:
“Every day, we make many decisions that involve choosing between our immediate and future well-being. For instance, do we go to the gym after work, or do we just go home to relax in front of the television?”
Building Sustainable and Socially Impactful Businesses at the Base of the Pyramid
An increasing number of consumers, in recent times, have reported feeling busier than ever. The current research examines how the subjective perception of busyness—which is referred to as a busy mindset in the current research —impacts consumers’ decision-making. Building on different streams of research in sociology and self-view, the current research proposes that a busy mindset bolsters people’s sense of self-importance, which, in turn, can increase self-control. Thus, a busy mindset is predicted to facilitate people’s ability to exert self-control. Seven studies, including a field study, provide support for this busy mindset hypothesis across various self-control domains. Findings from these studies provide support for the underlying process related to self-importance in multiple ways, while also addressing alternative accounts related to stress and the desire for productivity. Finally, findings from the current research delineate important managerially relevant boundary conditions for the proposed busy mindset effect.
Why Modest Goals Appeal to Us
Let’s say you’re wondering whether to set more money aside this coming year. You could go for a modest goal, such as increasing your savings by 1%, or pick a more ambitious one. You could also tell yourself: “I won’t increase my savings, but I’ll make sure to maintain whatever savings I already have.” New research by global school INSEAD, IE Business School, and Pamplin College of Business shows that you’re more likely to think that modestly increasing your savings is the most achievable of the three goals.
But isn’t it easier to maintain your savings than to increase them? Logically, yes, but here’s what you need to know. When we evaluate goals, we first consider the gap between the current and desired states. If that gap seems small enough, most of us feel quite encouraged. We think: “How difficult could it be? It’s an easy win! I can definitely do this!”
Research: A busy mindset can be a marketing tool
Framing products around virtuousness can help businesses market to those with a busy mindset, according to new research.
Global business school, Insead, recently found the mere perception of yourself as a busy person, or what they call a busy mindset, is a ‘badge of honour’ that can be used to promote better self-control, and marketers can leverage this with ‘virtuous’ offerings requiring this self-control.
When Busy Is Less Indulging: Impact of a Busy Mindset on Self-Control Behaviours, was created by Amitava Chattopadhyay, professor of marketing at Insead, and co-authors, Monica Wadhwa, associate professor of marketing and supply chain management at Fox School of Business at Temple University, and Jeehye Christine Kim, assistant professor of marketing at HKUST. The report shows there can be a flip side to being busy. While people who feel under significant time pressure tend to get anxious and make hedonic decisions, those who simply think of themselves as busy tend to make virtuous choices as a result of their perceived self-importance.
“It is common for marketers to use busy-ness as a campaign concept, as many consumers can relate to it. However, if the advertised product is an indulgent one – such as fast food – the campaign could backfire,” Chattopadhyay said. “Busy-ness appeals should be more effective for products that require people to assert self-control, as would be the case for a gym chain, for example.
“What we show is that feeling busy helps when the offering is virtuous. For many products, this is a matter of framing. If an oatmeal cookie is framed as rich in fibre, then it is seen as virtuous. However, framed as being delicious, it is seen as indulgent. So framing it right is important.”
Novartis: Building a Sustainable Business at the Bottom of the Pyramid
Inspired by CK Prahalad’s book on the “The Fortune at the Bottom of the Pyramid,” Novartis was exploring the possibility of building a sustainable business at the BOP in India. The goal was to create a business that would improve access to healthcare for the poor while being financially profitable, unlike Novartis’s traditional philanthropic and corporate social responsibility approaches. To successfully develop a sustainable business Novartis needed to answer a series of strategic questions: Which BOP patients were the best targets for reaching the social and financial goals of the program? Which diseases should the program cover, and with what types of products (patent protected, generics, OTC)? Which stages of the patient journey should the program address? Which stakeholders should be targeted? What communication channels should be used? What should be the program’s scale? Where to put the social business group in the Novartis organization?
Earthspired: Building a Brand for Social Impact
Mrida (Sanskrit for soil), a recently founded social business venture, had launched the Earthspired brand a year ago to sell products made from high-value plants and herbs, which it sourced sustainably from small and marginal farmers in India, to urban middle class consumers. This was a key initiative for Mrida, and the founders had big ambitions. They wanted to grow the brand in India and internationally. To address this ambition, Mrida needed to address several interconnected questions: What should the consumer value proposition for Earthspired be and how should it be communicated? What was the most appropriate distribution channel – direct selling, retail, or on-line sales? What should be the business strategy to scale the Earthspired brand, given the limited resources available to a fledgling social business venture?
If You Want to Get Funded on Kickstarter, Research Says to Avoid These Tactics
On the surface, the growth of crowdfunding has been phenomenal. Since its inception in 2009, projects listed on Kickstarter have raised $3.3 billion. Over 133,000 projects have become successfully funded. This has led many to claim that crowdfunding can democratize product innovation and access to capital by allowing small entrepreneurs, who lack access to resources, to find funding and markets.The World Bank is upbeat. It estimates the crowdfunding market will reach $90 billion annually by 2025. That’s roughly 1.8 times the size of the global venture capital industry today.
But, similar to the age-old adage that most startups fail, most Kickstarter projects also fail to get fully funded. Because Kickstarter is “all or nothing,” projects need to meet their funding goal before pledges are unlocked to the project founder. But, only about 36 percent of projects
make it. In many cases, those that don’t make it across the line do raise some interest, but not enough to become projects. This is not too different from what happens in the venture capital world. According to research by CB Insights
, just over 70 percent of startups stall at some point in the VC process and fail to exit or raise follow-on funding.
Kickstarter is often seen as a haven for innovators as it allows them to circumvent hard-nosed bankers, VCs and risk-averse traditional lenders. But, it looks like the crowd could be as skeptical as the average venture capital firm.
How the get the best outcome when pitching new ventures to crowdfunding backers
Using Kickstarter as a yardstick for the growth of online crowdfunding platforms gives us a sense of the dramatic growth experienced by such platforms. Since its inception in 2009, projects listed on Kickstarter have raised US$3.3 billion. Over 133,000 projects have become successfully funded.
Based on such data many have claimed that crowdfunding can democratise product innovation and access to capital by allowing small entrepreneurs, who lack access to resources, find funding and markets. Indeed, the World Bank is upbeat. It estimates that the crowdfunding market will reach US$90 billion annually by 2025. That is roughly 1.8 times the size of the global venture capital industry today.
But, similar to the age old finding that most start-ups fail, most Kickstarter projects also fail to get funded; only some 36 per cent of projects make it. This success rate is not very different from what happens in the venture capital world. Research from CB Insights shows that just under 30 per cent of start-ups make it through the entire VC process and raise adequate funds.
One reason Kickstarter projects could be falling short of their funding goals may be how the ventures are pitching their projects.