Summer 2011

Letter from the Director

In September of 2010, I had the honor and privilege of taking on the role as Director of the Institute for Research in Marketing at the Carlson School. In the first year of my tenure the Institute has continued its role as a leader in the field of marketing, bringing new ideas and raising important questions to the practitioners that shape the world's brands and bring products to the marketplace.

On this page you will learn about "Carlson on Sustainability," the Institute's initiative that brought together practitioners, policy makers and academics world-renowned for their landmark research and forward thinking around issues of sustainability and "Green." The conference provided considerable insight on how B2B and B2C companies can bring innovation and advancements to how the world perceives and utilizes sustainable practices and products. 

I would also like to welcome and thank the newest members of the Institute's advisory board. Luc Bondar of Groupe Aeroplan, David Krystal of Augeo Affinity Marketing, Mike Jonikas of Polaris and Brent Sherwin of The Schwan Food Company bring new perspective and expertise to our board. The Institute and Marketing faculty continue to benefit form the insight and access our board provides.

Our faculty continues to be enormously productive on the research front. As described elsewhere in this issue, Carlson School researchers publish pioneering scholarship in the leading scientific journals at a remarkable pace. Among recent honors, Deborah Roedder John was the recipient of the Park Journal of Consumer Psychology Award, which recognizes the best paper of the year, and Akshay Rao was appointed to the policy board of the Journal of Consumer Research. Additionally the national media continues to take serious notice of our work; some of the best regarded news organizations in the country, including the New York Times, BusinessWeek and NPR have recently featured research and commentary by Carlson's marketing professors.

As you can see, the Carlson School of Management and the Institute for Research in Marketing continue to make new knowledge and findings accessible to you. I look forward to working with you in the future as the Institute continues to expand our program to meet the needs of our corporate and academic community. To learn more about the Institute for Research in Marketing, including information on our past and future speakers' series, conferences, and innovative faculty research, please visit carlsonschool.umn.edu/marketinginstitute.

Best wishes,

Wayne Mueller
Director, Institute for Research in Marketing

BOARD MEMBER SPOTLIGHT: Luc Bondar, Groupe Aeroplan

Residency Program for Indian MBA Students Provides Real World Experience

With pocketbooks tight and a market full of choices, it is easy for consumers to look out for the best price rather than a familiar brand. How does a company address this obstacle? It builds better relationships. "If I had to sum up the challenges facing consumer marketers today, I would say that they are battling two core issues: communication overload and fiercer competition that leads to brand promiscuity," says Luc Bondar, Vice President - Commercial at Groupe Aeroplan, "The solution that all marketing is heading towards is to better understand consumer needs by capturing and utilizing various sources of customer data to (a) make smarter decisions across the enterprise and (b) engage customers more effectively to build brand fidelity."

Groupe Aeroplan Inc, a Canadian company that specializes in loyalty management comes to the Institute for Research in Marketing through Bondar who worked for Carlson Marketing before it was acquired by Groupe Aeroplan about a year ago. He brings his rich experience in consumer retention and loyalty to the Institute's ongoing conversation.

Loyalty programs, when administered successfully, can help to build relevance and meaning for consumers. In earlier iterations, in order to mine customer buying patterns, store clerks could only rely on recognizing their customers as they walked through the door. Then, retailers started to match shopping baskets with payment data. Now, companies have a wealth of new shopper data at their fingertips that can be synchronized with social platforms to generate specific buyer profiles that can predict usage, trigger personalized marketing treatments and measure product loyalty.

While the task of infusing real-time consumer data into strategic marketing programs might seem daunting, Bondar believes that a marketer's best chance at success in the consumer data arena lies in openly collaborating with other companies. "Consumer data is changing the marketing landscape, and companies that come together to collaborate can more easily produce accurate pictures of their customers that includes lifestyle, behavioral and attitudinal patterns," explains Bondar. "Partnerships enable companies to draw from a richer base of consumer data at a lower cost. Then they are able to turn that information into value for their customers to grow sales."

With any new strategy, there is of course a word of caution. Consumers are becoming savvier regarding their privacy and with whom they are sharing their information. "If our customers are being generous with us allowing us access to their personal information and preferences, we have a responsibility to them to use that knowledge in ways that benefit them and to respect their interaction and privacy preferences," says Bondar.

In such a rapidly changing environment, it is essential for companies to imbue their decisions with distinctive and unbiased research. The Institute for Research in Marketing is pleased to have Luc Bondar for both the perspective he brings, and the opportunity to connect our faculty's research with Groupe Aeroplan's strategic vision.

"The development of consumer loyalty programs and consumer data mining represents a paradigm shift in our field. I see a lot of opportunity here for some unique consumer psychology research that could help practitioners establish best practices and measurement tools to create more sophisticated loyalty programs," says Director Wayne Mueller.

Bondar agrees. "The Institute for Research in Marketing presents a great laboratory for testing new ideas both with colleagues from other industries and research experts. We really value this partnership."

RESEARCH HIGHLIGHT: Can Perceived Stereotypes Undermine Sales?

Most of us have felt the affects of stereotyping first hand. Knowing about judgments others might hold regarding groups we belong to can make us feel uncomfortable around or inferior to others. But how might stereotyping effects impact the marketplace? Would the presence of potential discrimination increase or decrease our purchasing patterns? According to new research by Professor Kathleen D. Vohs, the perception of negative stereotyping, particularly in the areas of financial services and automobile sales and service, can cause consumers to fear being duped and forgo their purchases.

Vohs, the Land O'Lakes Professor for Excellence in Marketing at the Carlson School of Management, and co-authors Hakkyun Kim (Concordia University, Canada) and Kyoungmi Lee (Yonsei University, Korea) found that a potential buyer, aware of negative associations held about a group to which he or she belongs, may experience apprehension when transacting with someone from outside this group. This nervousness detrimentally impacts purchasing decisions.

"People naturally withdraw from situations where they anticipate being stereotyped," says Vohs. "They fear being cheated or inadvertently reinforcing the negative association." One study, conducted for the paper, focused on women's feelings when interacting with potential financial advisors. When predisposed to conditions meant to remind participants of the stereotype that women are less competent at math than men, women reported feeling more anxious about interacting with a male financial advisor and less inclined to procure financial services. "Consumers don't have to believe the stereotype; they just have to be aware that the stereotype exists to experience the threat," says Vohs. "The actual behavior of the salesperson may have little effect."

This research, forthcoming in the Journal of Consumer Research, provides some of the first evidence that the presence of negative stereotypes plays an important role in consumer judgments. These findings have practical implications for marketers, who may take care to avoid using advertising content that might trigger thoughts or associations of a negative stereotype in potential costumers. Additionally, Vohs indentifies a possible action marketers can take to lesson the impact of negative stereotype effects.

In the marketplace it is often hard to control the environment so people won't be exposed to a situation that makes them feel nervous. Vohs and colleagues found that retailers and others may be able to mitigate the stereotype threat by introducing a sense of calmness into the transaction environment. For example, the researchers found that introducing the scent of vanilla into the decision-making process helped participants feel more at ease and assured of their transaction.

"Vanilla scent has been used for centuries to calm and pacify people who have anxiety," says Vohs. "While we used scent, any tactics firms can employ that would calm consumers could help the transaction take place as the marketer would intend."

MARKETING MOMENTS: Barbara Loken and Mass Media Campaigns

As the health care debate rages on between liberals and conservatives, public health and preventative care are at the forefront of public discourse. Programs such as Click it or Ticket, MyPyramid.gov, and Truth (an anti-tobacco industry campaign) fall under increased scrutiny for their overall effectiveness. Professor Barbara Loken examines mass media campaigns for health in her recent paper, "Use of Mass Media Campaigns to Change Health Behavior," and makes recommendations for improving their efficacy.

Exposure to mass media campaigns intended to change health behaviors are commonly passive in nature, connecting with broad audiences through billboards, print media, radio, television and the internet. Campaigns often compete against social norms, habits, addictions, and insidious product marketing. 

"The potential of such campaigns is in their breadth and duration. Mass media campaigns can connect many people to a behaviorally focused message often enough over a span of time to promote real change," says Loken. In a systematic review of mass media campaigns, such as anti-drug and anti-tobacco, nutrition and activity promotion, heart disease and HIV infection prevention campaigns, Loken and co-authors, Melanie A. Wakefield and Robert C. Hornik found that campaigns generally have a positive effect. However, programs that promoted a one-off behavior such as a health screening or vaccination were generally more fruitful than program that tackled significant behavior changes such as addiction. 

Loken, Wakefield and Hornik make recommendations to improve the effectiveness of mass media campaigns. For example, campaigns stand a better chance of succeeding when paired with complementary products and services made widely available to targeted communities. Additional interventions at schools and workplaces increase the rate of change. Also, changes in health behaviors can be reinforced by government policies that support behavior modification, limit competing marketing and present disincentives for not changing. 

"For mass-media health campaigns to be effective, marketing managers must have sufficient resources to invest over time to increase exposure, and they should ensure that the community resources are available for lasting change to occur," says Loken.

"Carlson on Sustainability" Launches Sustainability Initiative

These days, everyone is trying to solve the sustainability puzzle. What are the parameters of sustainability? What do consumers expect when they look for sustainable practices? Several years ago, in its role as a bridge between academia and practitioners, the Institute for Research in Marketing at the Carlson School asked its advisory board what areas of study they wanted to know more about. The board, comprised of marketing executives from Fortune 1000 companies, expressed resounding interest in how their industries could contribute to and more clearly define sustainability and its role in marketing. "It is a clear priority for our members," says Wayne Mueller, director of the Institute. "Companies want to know how to create demand for new products and how to influence the behavior changes necessary to make a difference."
 

In response, Akshay Rao, founder of the Institute for Research in Marketing and the General Mills Chair in Marketing, launched the Sustainability Initiative, a multi-year research program to build the base of scholarship focused on the demand side of sustainability. "We found that 98 percent of sustainability funding is devoted to the creation of new products and processes, while less than 2 percent is spent on developing an understanding of how buyers can be persuaded to adopt new, environmentally friendly alternatives," Rao explains. "This inattention could potentially affect the success rate of sustainability efforts for years."

Last fall, the Institute kicked off the Sustainability Initiative with "Carlson on Sustainability," a conference that brought together academics, practitioners, and policy makers from around the world to identify research problems in the sustainability movement. With partners that included Center for International Business Education and Research (CIBER), the Institute on the Environment, the Center for Integrative Leadership (CIL), Wells Fargo, and Best Buy, the Institute engaged attendees for two days of rigorous and informative exchange. The agenda for the conference featured sessions that covered a range of topics, including "Doing Well While Doing Good," and the "Sustainability Liability."

Moving forward, the Institute plans to form a consortium of corporations, foundations, government agencies, and academic institutions that sponsors and conducts research on sustainability. "This community interface is necessary in order to keep our research meaningful for businesses and practitioners," says Mueller.