The price a consumer will pay for a product is often significantly less than the price they will accept to sell it. According to a new study in the Journal of Consumer Research, this occurs because ownership of a product enhances its value by creating an association between the product and consumer identity.

"Our studies support the idea that ownership enhances the attractiveness of a product because ownership creates an association between the item and the self," wrote study authors Sara Loughran Dommer from the Georgia Institute of Technology and Vanitha Swaminathan from the University of Pittsburgh.

In several studies, the authors found a link between possessions and consumer identity. They also discovered that men are more likely to consider a product's association with specific social groups when making a purchase. 

"Men strive to differentiate themselves, and group distinctions are more significant for them," the authors wrote. "In contrast, women are focused on forming connections and less likely to classify themselves as separate from others. They are less likely to purchase products because of an association with a particular social group."

Why is this important, and why should you care? Because businesses can benefit from creating feelings of ownership through promotional strategies such as free trials, samples and coupons. For example, a consumer may be more willing to purchase a couch if they are offered a free trial, clothing stores increase sales by having customers try on items, and sporting goods stores could allow consumers to try out equipment in the store to boost sales.

However, companies wanting women to identify with and purchase their brands need to work harder to emphasize the identity differences across brands. A good example would be Apple's recent Mac versus PC advertising campaign that depicted the distinct identities of the two brands.

"If ownership increases the value consumers place on products, then companies could benefit from any action that creates feelings of ownership before actual purchase," the authors wrote. "Our findings regarding gender differences also suggest that in certain situations companies may benefit from prompting female consumers to make intergroup comparisons."

(Story materials from the University of Chicago Press Journals.)

Here's something to consider when you're advertising or marketing your product: Consumers are more likely to select products located in the horizontal center of a display and may not make the best choices as a result, according to a new study in the Journal of Consumer Research.

"A close investigation of visual attention reveals that consumers do not accurately recall their choice process," wrote authors A. Selin Atalay (HEC Paris), H. Onur Bodur (Concordia University) and Dina Rasolofoarison (Aston Business School). "Our findings emphasize the relationship between horizontal location, attention and choice." 

Using eye-tracking devices, the authors investigated how location influences choices for products as varied as vitamins, meal replacement bars and energy drinks. Consumers had a tendency to increase their visual focus on the central option in the final five seconds prior to a decision, and this determined which option they would choose. Consumers did not accurately recall their choice process and were not aware of any conscious visual focus.

Another study in a retail environment demonstrated that the centrally located item within a product category is chosen more often, even when it is not placed in the center of the shelf or visual field. Consumers would make better choices if they were aware that their attention usually focuses on the center.

"In the context of low involvement choice between frequently purchased products, when choosing between unfamiliar yet equivalent brands, the visual search process and consumer choice are biased toward centrally located options," the authors wrote. "Being unaware that our attention is focused on the center can lead to poor choices."

How can you imagine this information being used in the meeting and event industry?

(Image via Flickr: Michael Ashbridge / Creative Commons)

(Story materials from the University of Chicago Press.)

According to a Regus survey, 43 percent of firms are successfully using social networking to win new customers, up eight percentage points from last year’s survey.

The research also reveals more firms are using social media to engage with existing customers than a year ago, with the following highlights:

• 50 percent of businesses in the U.S. use websites such as Twitter to engage, connect with and inform existing customers.
• In the U.S., 55 percent of firms encourage their employees to join social networks such as Linkedin and Xing.
• 38 percent of U.S. companies dedicate up to 20 percent of their marketing budget to business social networking activity.
• Globally, the survey reported a seven percent increase in the proportion of businesses successfully recruiting new customers through social networks such as Facebook.

Social networking has fully evolved from a nice-to-have to a necessity as the majority of businesses in the U.S. (69 percent) and internationally (74 percent) agree that social media activity is playing a bigger role in their marketing strategy. U.S. (64 percent) and global firms (61 percent) are also emphasizing the need for a balance of marketing media, confirming their belief that without a combination of traditional and digital techniques, marketing campaigns will not work.

The global Regus survey findings are based on the responses of more than 17,000 managers and business owners across 80 countries.

“As businesses emerge from the downturn, they are increasingly reconsidering pre-recession working practices and opting for more flexible, competitive strategies," said Sande Golgart, regional vice president for Regus. "From supply chain management to leaner working practices to cloud computing to increased use of video communications and mobile working—no area of business is being overlooked. Particularly in the U.S. where MerchantCircle reports that more than 70 percent of small businesses are promoting their business on Facebook, more and more companies are leveraging this channel to increase the loyalty of existing customers, and as a successful acquisition tool.”

Strongly identifying with an organization or workplace can change people's lives in profound ways, according to a new study in the Journal of Consumer Research.

"Managers often hope that consumers identify with organizations they regularly patronize, and firms sometimes encourage labor to encourage employees to identify with firms they work for, because in both cases organizations benefit from such identification," wrote Melea Press and Eric J. Arnould (both University of Wyoming, Laramie). 

The authors focus on identification formation from the perspective of consumers, whose personal, economic and social lives are affected by organizations.

The authors conducted interviews with consumers who had recently joined a Community Supported Agriculture (CSA) program. They also interviewed employees at an advertising agency, at all levels from receptionist to CEO.

In the interviews, the authors learned how consumers learn to integrate values and behaviors from within and beyond the organization, often in life-changing ways. 

"So, a new CSA member learns how and why he should appreciate locally grown organic vegetables and then begins to find additional opportunities to buy other organic and locally made products more generally," the authors said. "Similarly, an employee learns the value of making clear, considered and creative choices and brings that value into her personal life as she reduces her consumer debt and even makes better choices for romantic partners."

For some consumers, identification comes suddenly, as an epiphany, whereas others take more gradual paths, emulating mentors who are forging new ways of living. For example, over time a CSA member who was a workaholic could use his experience with the organization to help assess his lifestyle and end up dramatically cutting back his work schedule to spend time with his family.

(Story materials provided by the University of Chicago Press Journals and EurekAlert!.)

A new article on Inc. details six tips for keeping up with a fast-moving company. Here's an excerpt from their entry called "Drop Dead Customer Weight."

If your company is growing, it provides your businesss with a unique advantage: you can finally say goodbye to your worst customers. Every business has them; they're the ones who needle and cajole you into a cheaper product or getting more for their money. More often than not, these are the types of customers you can afford to lose, especially if your company is growing.