Marketing Management Extensive Summary 2024 PDF

Dell'Acqua, F., McFowland III, E., Mollick, E. R., Lifshitz-Assaf, H., Kellogg, K., Rajendran, S.,... & Lakhani, K. R. (2023). NavigaMng the jagged technological fronMer: Field experimental evidence of the eﬀects of AI on knowledge worker producMvity and quality. Harvard Business School Technology & OperaMons Mgt. Unit Working Paper, (Lecture). In our study conducted with Boston Consul3ng Group, a global management consul3ng ﬁrm, we examine the performance implica3ons of AI on realis3c, complex, and knowledge-intensive tasks. Within this growing fron3er, AI can complement or even displace human work; outside of the fron3er, AI output is inaccurate, less useful, and degrades human performance. 3 aspects of LLM’s that suggest they will have a much more rapid, and widespread, impact on work: (Large Language Model). - LLM’s have surprising capabili3es that they were not speciﬁcally created to have and ones that are growing rapidly over 3me as model size and quality improve. - The ability to directly increase the performance of workers who use these systems, without the need for substan3al organiza3onal or technological investment. Eﬀects of AI are expected to be higher on the most crea3ve, highly paid, and highly educated workers. - Rela3ve opacity: Tendency to produce incorrect, but plausible results. Jagged FronMer: Some unexpected tasks, like idea genera3on are easy for AI, while other tasks that seem to be easy for machines to do, like basic math are challenges for some LLM’s. Research: We tested two dis)nct tasks: one situated outside the fronMer of AI capabiliMes and the other within its bounds. The experiment aimed to understand how AI integra3on might reshape the tradi3onal workﬂows of these high human capital professionals. Inside the FronMer: Consultants had to either tackle tasks that required to develop new product ideas focusing on crea3vity, analysis, persuasiveness and wri3ng skills, while the other half engaged in business problem-solving tasks using quan3ta3ve data, interviews, and including a persuasive wri3ng component. The ﬁrst group (a control condi3on) proceeded without AI support; the second (“GPT Only”) had the assistance of an AI tool based on GPT-4; and the third (“GPT + Overview”) not only u3lized the same AI tool but also beneﬁted from supplementary prompt engineering overview. Tasks spanned various domains in 4 categories: crea3vity, analy3cal thinking, wri3ng proﬁciency, and persuasiveness. Across all speciﬁca3ons, both treatments — GPT +Overview and GPT Only—demonstrate posi3ve eﬀects. Both AI condi3ons show clear superior performance to the control group not using GPT-4. All of the regressions showed a signiﬁcant eﬀect of introducing AI on consultants’ performance. Speciﬁcally, the GPT + Overview treatment consistently exhibits a more pronounced posiMve eﬀect compared to the GPT Only treatment. Both treatments — GPT + Overview and GPT Only — demonstrate a posi3ve eﬀect on task comple3on. On average, these coeﬃcients indicate a 12.2% increase in comple3on rates. The coeﬃcients suggest that the integra3on of AI tools enhances the rate of task comple3on very signiﬁcantly, at the same 3me as it increases quality. When comparing the two groups, though, we see the bo^om half-skill performers exhibited the most substan3al surge in performance, 43%, compared to the top-half-skill subjects, 17%. The GPT + Overview treatment makes subjects faster by 1129 seconds (18.8 minutes or 22.5% faster than the control), while the GPT Only treatment reduces 3me spent on the ﬁrst 17 ques3ons by 1388 seconds (23.13 minutes or 27.63% faster than the control). Our ﬁndings indicate that while subjects using AI produce ideas of higher quality, as discussed in the previous sec3ons, there is a marked reduc3on in the variability of these ideas compared to those not using AI. This suggests that while GPT-4 aids in generaMng superior content, it might lead to more homogenized outputs. Outside the FronMer: Their recommenda3ons were to pinpoint which channel held the most poten3al for growth and ac3on. For this task outside the fron3er, our primary metric of evalua3on is ’correctness.’ There is a no3ceable dip in performance among the AI treatment groups when juxtaposed with the control group. Subjects in the control group were correct about this exercise about 84.5% of the 3me, while the AI condi3ons scored at 60% and 70% (for an average decrease of 19% when combining the AI treatment condi3ons and comparing them to the control condi3on). GPT + Overview Group: Experienced a signiﬁcant nega3ve impact, with a decrease of 24 % GPT Only Group: Showed a smaller nega3ve impact, with a decrease of 13 % Across all speciﬁca3ons, subjects using AI (both GPT + Overview and GPT Only) consistently outperformed those not using AI in terms of recommenda3on quality, regardless of the correctness of their answer. NavigaMng the FronMer: On tasks within the fron3er, AI signiﬁcantly improved human performance. Outside of it, humans relied too much on the AI and were more likely to make mistakes. We idenMﬁed two predominant models that encapsulate their approach. Centaur behavior: Users with this strategy switch between AI and human tasks, alloca3ng responsibili3es based on the strengths and capabili3es of each en3ty. Cyborg behavior: Cyborg users don’t just delegate tasks; they intertwine their eﬀorts with AI at the very fron3er of capabili3es. This strategy might manifest as alterna3ng responsibili3es at the subtask level, such as ini3a3ng a sentence for the AI to complete or working in tandem with the AI. Discussion: We found that the u3lity of AI can ﬂuctuate over the course of a professional’s workﬂow, with some tasks falling inside while others fall outside of the fron3er. For tasks inside the fron3er, these ﬁndings carry large performance implica3ons. Further, it operated in a way that beneﬁ^ed bo^om-half performers the most, though all users beneﬁ^ed from AI. Professionals who had a nega3ve performance when using AI tended to blindly adopt its output and interrogate it less (“unengaged interac3on with AI”). Tutorial 1: 31/10/2024 Understanding current market trends and consumer needs. Understanding the basics of product and branding. In your group: come up with a new product/service idea. Required PreparaMon Materials: Global Trends 2024, Ipsos heps://www.ipsos.com/en/global-trends-2024--> (Focus on the execuMve summary and browse as needed) 3 tensions that have arised: more global & introspec3ve, focus on self, environmental concern. Most people are willing to spend extra for a brand with an image that appeals to them. Most people also value data privacy. Enduring appeal of nostalgia. Nostalgia is a potent force when people are uncertain about their future and uncomfortable in the present. Especially in Asia and Africa. Surge in concern for psychological health. (80%) Trust in businesses is higher than in na3onal governments. Shared value is a great concern. Public pessimism and private opMmism: People feel overwhelmed by geopoli3cal, economic and technology shits (technological worry, fatalism, op3mism). The reac3on is an inward personal focus, with a ﬂourishing sense of individualism, enhanced by new choices over lifestyle and consump3on. A clear tension in many socie3es between the primary concerns of diﬀerent groups and a lack of consensus on how to achieve growth. A widespread “loss of the future”: a tension where many believe governments will do too li^le to help them in the years ahead. Keller (2013), Strategic Brand Management: Building, measuring and managing brand equity (pp. 29-48) Chapter 1: Brands and Brand Management Brand: AMA deﬁnes a Brand as a “name, term, sign, symbol, or design, or a combina3on of them, intended to iden3fy the goods and services of one seller or group of sellers and to diﬀeren3ate them from those of compe33on.” Managers refers to brands as something that has actually created a certain amount of awareness, reputa3on, prominence, and so on in the marketplace. Brand elements: Name, logo, symbol, package design or other characteris3cs of a brands that iden3fy and diﬀeren3ate it. Some brand names use words with inherent product meaning. Other names are made up and include preﬁxes and suﬃxes that sound scien3ﬁc, natural, or pres3gious. Product: Anything we can oﬀer to a market for a^en3on, acquisi3on, use or consump3on that might sa3sfy a need or want. We can deﬁne 5 levels of meaning for a product: 1. The core beneﬁts level is the fundamental need or want that consumers sa3sfy by consuming the product or service. 2. The generic product level is a basic version of the product containing only those a^ributes or characteris3cs absolutely necessary for its func3oning but with no dis3nguishing features. 3. The expected product level is a set of a^ributes or characteris3cs that buyers normally expect and agree to when they purchase a product. 4. The augmented product level includes addi3onal product a^ributes, beneﬁts, or related services that dis3nguish the product from compe3tors. 5. The potenMal product level includes all the augmenta3ons and transforma3ons that a product might undergo in the future. In many markets most compeMMon takes place at the product augmentaMon level, because most ﬁrms can successfully build sa3sfactory products at the expected product level. Coca cola proves that marke3ng management is more important than simply delivering a product to the market. Why do brands maeer? Consumer: Broadly encompass all types of customers, including individuals as well as organiza3ons. To consumers, brands provide important func3ons. From an economic perspec3ve, brands allow consumers to lower the search costs for products both internally (in terms of how much they have to think) and externally (in terms of how much they have to look around). The rela3onship between a brand and the consumer as a type of bond or pact. Consumers oﬀer their trust and loyalty with the implicit understanding that the brand will behave in certain ways and provide them u3lity through consistent product, performance and appropriate pricing, promo3on, and distribu3on programs and ac3ons. Products and their associated aeributes: search, experience, and credence goods. Search goods: Like grocery produce, consumers can evaluate product a^ributes like sturdiness, size, color, style, design, weight, and ingredient composi3on by visual inspecMon. Experience goods: Like automobile 3res, consumers cannot assess product a^ributes, like durability, service quality, safety, and ease of handling or use so easily by inspec3on, and actual product trial and experience is necessary. Credence goods: Like insurance coverage, consumers may rarely learn product a^ributes Look (M. Tutorial 1 notes for the rest) Firms: Fundamentally serve an iden3ﬁca3on purpose, to simplify product handling or tracing. A brand can retain intellectual property rights, giving legal 3tle to the brand owner. Brand loyalty provides predictability and security of demand for the ﬁrm and creates barriers of entry that make it diﬃcult for other ﬁrms to enter the market. Furthermore, it secures sustainable and prolonged compe33ve advantage. Can anything be branded? A brand is something that resides in the minds of consumers. A brand is a perceptual en3ty rooted in reality. It reﬂects the percep3ons and perhaps even the idiosyncrasies of consumers. Marketers must give consumers a label for the product and a meaning for the brand. Branding creates mental structures and helps consumers organize their knowledge about products and services. The key to branding is that consumers perceive diﬀerences among brands in a product category. Physical goods: The role of branding in industrial “business-to-business2 products and technologically intensive “high-tech” products. Commodity: A product so basic that it cannot be physically diﬀeren3ated from compe3tors in the minds of consumers. As products became branded, the key factor in each case, was that consumers became convinced that all product oﬀerings in the category were not the same and that meaningful diﬀerences existed. Business-to-business products: A strong brand can provide valuable reassurance and clarity to business customers who may be pulng their company’s fate- and perhaps their own careers on the line. Understanding Business-to-Business Branding: 6 speciﬁc guidelines 1. Ensure the enMre organizaMon understands and supports branding and brand management: If branding is done right, the sales force can ensure that target customers recognize the brand’s beneﬁts suﬃciently to pay a price commensurate with the brand’s poten3al value. 2. Adopt a corporate branding strategy if possible and create a well-deﬁned brand hierarchy. 3. Frame value percepMons: Framing occurs when customers are given a perspecMve or point of view that allows the brand to “put its best foot forward.” 4. Link relevant non-product-related brand associaMons: Imagery may also be a func3on of the other organiza3ons to which the ﬁrm sells. 5. Find relevant emoMonal associaMons for the brand: Emo3onal associa3ons related to a sense of security, social or peer approval, and self-respect can also be linked to the brand and serve as key sources of brand equity. 6. Segment customers carefully both within and across companies. High-tech products: Many technologies struggle with branding. Financial success is no longer driven by product innova3on alone, or by the latest and greatest product speciﬁca3ons and features. Understanding High-Tech Branding: 10 guidelines. 1. It is important to have a brand strategy that provides a roadmap for the future: The company with the best technology does not always win. 2. Understand your brand hierarchy and manage it appropriately over 3me. 3. Know who your customer is and build an appropriate brand strategy. 4. Realize that building brand equity and selling products are two diﬀerent exercises. 5. Brands are owned by customers, not engineers. 6. Band strategies need to account for the a^ributes of the CEO and adjust accordingly. 7. Brand building on a small budget necessitates leveraging every possible posi3ve associa3on. 8. Technology categories are created by customers and external forces, not by companies themselves: Only two groups can truly create categories: analysts and customers. 9. The rapidly changing environment demands that you stay in tune with your internal and external environment: Trends in brand strategy change almost as rapidly as the technology. 10. Invest the 3me to understand the technology and value proposi3on and do not be afraid to ask ques3ons. Services: Role of Branding with Services: Less tangible and vary in quality depending on the par3cular person or people providing them. Branding a service can also be an eﬀec3ve way to signal to consumers that the ﬁrm has designed a par3cular service oﬀering that is special and deserving of its name. Professional Services: Corporate credibility is key in terms of exper3se, trustworthiness, and likeability. Individual employees have a lot more equity in the ﬁrm and are onen brands in their own right. Referrals and tes3monials are powerful when the services oﬀered are highly intangible and subjec3ve. Retailers and Distributors: Brands can generate consumer interest, patronage, and loyalty in a store. Retailers can also create their own brand image by a^aching unique associa3ons to the quality of their service, product, assortment, merchandising, and their pricing and credit policy. Retailers can introduce their own brands by using their store name or crea3ng one. Products bearing these store brands or private label brands oﬀer another way for retailers to increase customer loyalty. The Internet has transformed retailing in recent years as retailers have adopted a “bricks and clicks” approach to their business or in many cases, become pure-play online retailers, opera3ng only on the Web. Online Products and Services: It is cri3cal to create unique aspects of the brand on some dimension that is important to consumers, such as convenience, price, variety, customer service, credibility, and personality. People and OrganizaMons: Public ﬁgures compete for some sense for public approval and acceptance, and all beneﬁt from conveying a strong and desirable image. By oﬀering unique features and services to consumers, the best online brands are able to avoid extensive adver3sing or lavish marke3ng campaigns, relying more on word-of-mouth and publicity. Sports, Arts, and Entertainment: Sports teams are marke3ng themselves through a crea3ve combina3on of adver3sing, promo3ons, sponsorship, direct mail, digital and other forms of communica3on. Place Branding: Countries or ci3es brand their respec3ve images as they try to draw in visitors or encourage reloca3on. Geographic LocaMons: Increased mobility of both people and businesses and growth in the tourism industry have contributed to the rise of place marke3ng. Ideas and Causes: By making ideas and causes more visible and concrete, branding can provide much value. What are the strongest brands? Virtually anything can be and has been branded. Kapferer (2008), The new strategic brand management (pp. 9 – 29) Brands are intangible assets, assets that produce added beneﬁts for the business. What is a brand? One deﬁni3on is customer-based and focuses exclusively on the rela3onship customers have with the brand (from total indiﬀerence to a^achment, loyalty, and willingness to buy and rebuy based on beliefs of superiority and evoked emo3ons). The other aims at producing measures in dollars, euros or yen. Both approaches have their own champions. It is the goal of this fourth edi3on of Strategic Brand Management to unify these two approaches. Customer-based deﬁniMons: These addi3onal cash ﬂows are the result of customers’ willingness to buy one brand more than its compe3tors’, even when another brand is cheaper. Why then do customers want to pay more? Because of the beliefs and bonds that are created over 3me in their minds through the marke3ng of the brand. In brief, customer equity is the preamble of ﬁnancial equity. Brands have ﬁnancial value because they have created assets in the minds and hearts of customers, distributors, prescribers, opinion leaders. These assets are brand awareness, beliefs of exclusivity and superiority of some valued beneﬁt, and emo3onal bonding. The classic deﬁni3on of a brand: ‘a brand is a set of mental associa3ons, held by the consumer, which add to the perceived value of a product or service’ (Keller, 1998). These associa3ons should be unique (exclusivity), strong (saliency) and posi3ve (desirable). Modern brand management starts with the product and service as the prime vector of perceived value, while communica3on is there to structure, to orient tangible percep3ons and to add intangible ones. Brands as a condiMonal asset: First, brands are intangible assets, posted eventually in the balance sheet as one of several types of intangible asset (a category that also includes patents, databases and the like). Second, brands are condi3onal assets, because in order to deliver their beneﬁts, their ﬁnancial value, they need to work in conjunc3on with other material assets such as produc3on facili3es. One should never use the brand name as a noun, but as an adjec3ve a^ached to a name. The legal perspecMve: An interna3onally agreed legal deﬁni3on for brands does exist: ‘a sign or set of signs cer3fying the origin of a product or service and diﬀeren3a3ng it from the compe33on’. A brand is a name that inﬂuences buyers: This deﬁni3on captures the essence of a brand: a name with power to inﬂuence buyers. But what really makes a name become a brand are the saliency, diﬀeren3ability, intensity and trust a^ached to these associa3ons. Are the beneﬁts the name evokes (a) salient, (b) exclusive and (c) trusted? We live in an aeenMon economy: there is so much choice and opacity that consumers cannot spend their 3me comparing before they make a choice. In short, a brand exists when it has acquired power to inﬂuence the market. This is why one should speak of brands as living systems made up of three poles: products or services, name and concept. This system reminds us of the condi3onal nature of the brand asset: it only exists if products and services also exist. Diﬀeren3a3on is summarized by the brand concept, a unique set of a^ributes (both tangible and intangible) that cons3tute the value proposi3on of the brand. To gain market share and leadership, the brand must be: able to conjure up a big idea, and a^rac3ve experienced by people at contact points ac3vated by deeds and behaviors communicated distributed. The brand triangle helps us to structure most of the issues of brand management: Brand management is about gaining power, by making the brand concept more known, more bought, more shared. In summary, a brand is a shared desirable and exclusive idea embodied in products, services, places and/or experiences. The word ‘idea’ is important. Do we sell products and services, or values? DiﬀerenMaMng between brand assets, strength and value: “Brand equity”: value a brand adds to a product or service, based on consumer percep3ons, recogni3on, loyalty, and associa3ons. MarkeMng science deﬁniMon of brand equity: ‘the set of associa3ons and behavior on the part of a brand’s customers, channel members and parent corpora3on that permits the brand to earn greater volume or greater margins than it could without the brand name’ (Leuthesser, 1988). Brand assets: These are the sources of inﬂuence of the brand (awareness/saliency, image, type of rela3onship with consumers), and patents. Brand strength at a speciﬁc point in 3me as a result of these assets within a speciﬁc market and compe33ve environment. Brand value is the ability of brands to deliver proﬁts. A brand has no ﬁnancial value unless it can deliver proﬁts. To say that lack of proﬁt is not a brand problem but a business problem is to separate the brand from the business, an intellectual tempta3on. The ﬁnancial value of the brand is the diﬀerence between the extra revenue generated by the brand and the associated costs for the next few years, which are discounted back to today Brand tracking: Measuring the sources of brand power. It is also a tool for control, diagnosis, and ac3on. 4 indicators of brand assets (equity): Aided brand awareness. This measures whether the brand has a minimal resonance. Spontaneous brand awareness. This is a measure of saliency, of share of mind when cued by the product. Evoked set, also called consideraMon set. Does the brand belong to the shortlist of two or three brands one would surely consider buying? Has the brand been already consumed or not? AccounMng goodwill is the monetary value of the psychological goodwill that the brand has created over 3me through communica3on investment and consistent focus on product sa3sfac3on, both of which help build the reputa3on of the name. The brand is a focal point for all the posiMve and negaMve impressions created by the buyer over 3me as he or she comes into contact with the brand’s products, distribu3on channel, personnel and communica3on. How brands create value for the customer? Brands reduce perceived risk and exist as soon as there is perceived risk. Once the risk perceived by the buyer disappears, the brand no longer has any beneﬁt. The perceived risk is greater if the unit price is higher, or the repercussions of a bad choice are more severe. Thus, the purchase of durable goods is a long-term commitment. Lastly, all consumers do not have the same level of involvement. How brand awareness means value: Awareness carries a reassuring message: When a brand is known, each individual knows it is known. This leads to spontaneous inferences. Transparent and opaque products: Nelson (1970) and Darby and Kami (1973) make the disMncMon between three types of product characterisMcs: the quali3es which are no3ced by contact, before buying the quali3es which are no3ced uniquely by experience, thus aner buying credence quali3es which cannot be veriﬁed even aner consump3on and which you have to take on trust. Lastly, a brand, when it is well known, adds an aura of make-believe when it is consumed. How brands create value for the company: Strong brands are perceived as less risky. The certainty, the guarantee and the removal of the risk are included in the price. Brand extension: Saving on the need to create awareness if you had to launch a new product on each of these markets. It can result in royal3es and important leverage eﬀects. The 3 generators of proﬁt of the brands: the price premium, more a^rac3on and loyalty, and higher margin. 3 types of investments when a company wishes to strategically diﬀerenMate its products: Investment in produc3on, produc3vity and R&D to acquire speciﬁc know-how. Investment in research and marke3ng studies in order to get new insights, to an3cipate the changes of consumers’ tastes and life-styles in order to deﬁne any important innova3ons which will match these evolu3ons. Investment in lis3ng allowances, in the sales force and merchandising, in trade marke3ng and, naturally, in communica3ng to consumers to promote the uniqueness of the brand and to endow it with saliency (awareness), perceived diﬀerence and esteem. How brand reputaMon aﬀects the impact of adverMsing: Adver3sing does play a key role in building sales, but it has no direct impact on gaining both market share and premium price. This is most interes3ng: in brief, it is only by building a reputa3onal capital that both a higher market share and price premium can be obtained. Corporate reputaMon and the corporate brand: When any brand reaches a level of 80 per cent of top-of-mind awareness in its category, part of its ‘stagna3on’ is certainly due to a ceiling eﬀect: there is not much room for improvement. “Image” has lost its glamour. Reputa3on takes the company as a whole. It reuniﬁes all stakeholders and all func3ons of the corpora3on. Changes in reputa3on aﬀect all stakeholders, companies monitor and manage their reputa3on closely. Fombrun has diagnosed that global reputa3on is based on six factors or ‘pillars’ (Fombrun, Gardberg and Sever, 2000): emo3onal appeal; (trust, admira3on and respect); products and services (quality, innova3veness, value for money and so on); vision and leadership; workplace quality (well-managed, appealing workplace; employee talent); ﬁnancial performance; social responsibility. What is the diﬀerence between corporate brand methods and the product brand methods developed in this book? Companies do have an internal idenMty, core values that bear on the proﬁle they wish to, or can, express outwardly. Companies and corpora3ons are bodies with a soul (from the La3n, corpus). (They are enacted by people.). Corporate brands must tailor their proﬁle to meet the expecta3ons of mul3ple publics. T Product brands are more imaginary construcMons, relying on intangible values which have been invented to fulﬁl the needs of clients. How do corporate brands relate to product brands? modern mature markets, consumers do not make a complete dis3nc3on between the product brand and the corpora3on: what the corpora3on does impacts their evalua3on of its brands. But lastly, the whole corpora3on should be brand-driven. Podcast: The Journal (2023), Apple Bets Big on ‘Nerd Helmets’ (h^ps://www.wsj.com/podcasts/the- journal/apple-bets-big-on-nerd-helmets/b520cecb-cdd6-4584-a72ca82a111b65b4) Apple announced a new product category. The Apple Vision pro. It combines both aspects from the present and the future. You are s3ll in reality but augmented. It has been a concept apple has been experimen3ng or talking about for many years. When you look back at all the many Apple product introduc3ons, this one does s3ck out because the way it's sort of being introduced and at the price point, it does seem as it's very focused on the developers or the early adopters. Now you could say that of many Apple products, that they were focused on early adopters out of the gate, certainly the iPhone. You didn't go out and buy the ﬁrst iPhone, did you? Correct. So that's the path that Apple's on right now. Apple is making a big play here for this being the start of the journey. This is where they start right now. And look back at the ﬁrst iPhone. Look back at that ﬁrst Mac, even that MacBook Air. There was a lot of road to get be^er, to get cheaper, to really ﬁgure out why these products should be bought by most people. That's the road this product is on. Threat to Meta: First is the idea that Apple has made hardware for a long 3me. So Apple has the know-how to build great hardware products and build them at scale and build them and then bring the cost down. That is Apple's thing. And most people are already apple users. And Apple has another advantage over its compe3tors: those developers who make sonware for its app store. Apple watch: You could run li^le apps on there. And ulMmately, they sort of threw this at the wall and saw what stuck. And one of the main things that people started to buy it for was ﬁtness and health. And so Apple leaned in more to that. And they of course had a lot of this going on in their R and D and their labs. But over the next number of models they leaned into that. They saw app developers building for that. That became the main purpose because it was out there. People could use this thing, could understand, okay, that's a good app. They found the killer app. Joanna says that's what Vision Pro will need to succeed, ﬁnding a killer app, one that will make consumers want to buy the headset. Discussion of materials: What are current consumer trends and needs? And how are companies/brands addressing these needs? Current consumer trends include a strong focus on environmental sustainability, psychological well- being, data privacy, and a sense of nostalgia, par3cularly in regions like Asia and Africa, where people feel uncertain about the future. In response, brands are leaning into these themes, emphasizing their eco-friendly prac3ces, privacy protec3ons, and connec3on to past values to build trust and loyalty. This helps create a meaningful bond with consumers who value shared ideals and transparency What are the diﬀerences between products and brands? A product is an item or service oﬀered to meet a consumer’s need, available in various forms from basic to highly customized. A brand, however, is a unique iden3ty created to dis3nguish a product or service through elements like a name, logo, or symbol. A brand exists in the minds of consumers, encapsula3ng their percep3ons, emo3ons, and trust, which can create added value for the product and drive loyalty What is brand equity and why is it desirable? Why are brands important to address consumer needs? Brand equity refers to the value derived from consumer percep3ons, associa3ons, and loyalty toward a brand. This equity enables brands to command higher prices, secure customer loyalty, and create a compe33ve advantage. Brands are cri3cal in addressing consumer needs because they simplify the decision-making process, reduce perceived risks, and foster trust, making consumers more likely to return to brands they trust and recognize, which ul3mately supports the company's stability and growth Based on the podcast, what is the core beneﬁt of the Apple Vision Pro? How does the introducMon of a new Apple product beneﬁt from carrying the Apple brand? The core beneﬁt of the Apple Vision Pro is its immersive experience, merging present reality with augmented digital elements. It represents Apple's future-forward vision in wearable tech. The established Apple brand signiﬁcantly beneﬁts the Vision Pro launch by leveraging Apple’s reputa3on for high-quality, user-friendly, and innova3ve products. Addi3onally, Apple’s large user base and established developer ecosystem are assets, as developers are more likely to create applica3ons for a trusted, widely adopted plaworm, ul3mately enhancing product adop3on and appeal. It shows that it is con3nuously innova3ng and while the iphone ini3ally was also an inaccessible product for the masses it slowly transformed to a common lifestyle product. It also shows their customers that they are willing to transform and adapt their products over a course of 3me. Tutorial 2: 04/11/2024 (look at m tut 2 notes) Interbrand Global Brands: BGB – Interbrand Kapferer (2008), The new strategic brand management (171-199) Brand idenMty and posiMoning: Brand: Vision that drives the crea3on of products and services under a brand name. IdenMty: The vision, the key beliefs of the brand and its core values. Brand idenMty: The common element sending a single message amid the wide variety of 3s products, ac3ons and communica3ons. Brand charter: formal document that outlines a brand’s core iden3ty, values, mission, vision, and guidelines for its management and communica3on. It serves as a strategic framework to ensure consistency in how the brand is represented and experienced across all touchpoints. Graphic idenMty charters: Such charters therefore deﬁne the norms for visual recogni3on of the brand, i.e. the brand’s colors, graphic design and type of print. Brand idenMty deﬁnes what must stay and what is free to change. Brands are living systems. They must have degrees of freedom to match modern market diversity. CommunicaMon means 2 things: sending out messages and making sure that they are received. Marke3ng is becoming a catching-up game as well. Market research also generates herdism within a given sector. Technology is responsible for growing similarity. Brand image: Diﬀerent from iden3ty. Image is on the receiver’s side and focuses on the way in which certain groups perceive a product, brand etc. The image refers to the way in which these groups decode all the signals emana3ng from the products, services and communica3on covered by the brand. Brand idenMty: Iden3ty is on the sender’s side. The purpose, in this case, is to specify the brand’s meaning, aim and self-image. Image is both the result and interpreta3on thereof. Extraneous factors (noise) that speak in the brands name: Imita3on of compe3tors Obsession to cater to create favorable appeal to all Fantasized iden3ty: the brand as one would ideally like to see it, but not as it actually is. Adver3sements are too disconnected from the brand. An obsession with image can lead a brand to capitalize too much on appearance and not enough on essence. IdenMty and posiMoning: Posi3oning a brand means emphasizing the dis3nc3ve characteris3cs that make it diﬀerent from its compe3tors and appealing to the public. (A brand for what beneﬁt, for whom and what is the reason). PosiMoning is a 2-stage process: First, indicate to what ‘compe33ve set’ the brand should be associated and compared. Second, indicate what the brand’s essen3al diﬀerence and raison d’être is in comparison to the other products and brands of that set. What does the idenMty concept add to that of posiMoning? Posi3oning focuses more on the product itself. Second, posi3oning does not reveal all the brand’s richness of meaning nor reﬂect all of its poten3al. The four posi3oning ques3ons thus fail to encapsulate such nuances. Posi3oning controls the words only, leaving the rest up to the unpredictable outcome of crea3ve hunches and pretests. Yet brand language should never result from crea3vity only. It expresses the brand’s personality and values. Brand uniqueness onen tends to get eroded by consumer expecta3ons and thus starts regressing to a level at which it risks losing its iden3ty. A brand’s message is the outward expression of the brand’s inner substance. The public should not be allowed to dictate brand language: its style needs to be found within itself. Brand idenMty provides the framework for overall brand coherence. It is a concept that serves to oﬀset the limita3ons of posi3oning and to monitor the means of expression, the unity and durability of a brand. Why brands need idenMty and posiMoning: All choices are comparaMve. IdenMty: Iden3ty draws upon the brand’s roots and heritage – everything that gives it its unique authority and legi3macy within a realm of precise values and beneﬁts. PosiMoning is comparaMve: Customers compare with the ﬁeld of compe33on and what is the brand oﬀering as a key decision-making factor? The aim of posi3oning is to iden3fy, and take possession of, a strong purchasing ra3onale that gives us a real or perceived advantage. While iden3ty remains, posi3oning can evolve. The standard posiMoning formula: Frame of reference: the subjec3ve deﬁni3on of the category, which will specify the nature of the compe33on. In markeMng, percepMon is reality. Posi3oning is a concept which starts with customers, by pulng ourselves in their place: faced with a plethora of brands, are consumers able to iden3fy the strong point of each, the factor that dis3nguishes it from the rest? Brand key: builds on and replaces the brand posi3oning statement. 1. The compe33ve environment. 2. The target. 3. The consumer insight on which the brand is based. 4. The beneﬁts brought by the brand. 5. Brand values and personality. 6. The reasons to believe. 7. The discriminator (single most compelling reason to choose). 8. The brand essence. Kapferer believes the “discriminator” and the chain of means- end (ladder moving from the tangible to the intangible) are the 2 tools needed to manage a brand. One deﬁnes the brand’s iden3ty, while the other is compe33ve and speciﬁes the compe33ve proposi3on made at any given 3me in any given market. Brand’s unique compelling compeMMve proposiMon (UCCP). Brand idenMty has 6 facets and is represented by the idenMty prism. At its center is the brand essence, the central value it symbolizes. Brand plaworm/posi3oning, choosing a market and a speciﬁc angle to a^ack it ( for whom, why, when and against whom). What is the connecMon between idenMty, essence and posiMoning? Clearly, for exis3ng brands, posi3oning derives from iden3ty. But it exploits a speciﬁc aspect of iden3ty at a given point in 3me in a given market and against a precise set of compe3tors. There is a degree of freedom between iden3ty, essence and posi3oning that enables a brand to change over 3me while s3ll remaining itself. The product’s posi3oning promotes a consumer a^ribute or beneﬁt, while the parent brand speciﬁes the ‘terminal value’ that this a^ribute and beneﬁt enables the consumer to reach. The six facets of brand idenMty: The idenMty prism. 1: A brand has physical speciﬁMes and qualiMes. The tangible added value. 2: A brand has personality. By communica3ng, it gradually builds up character. Brand personality is described and measured by human personality traits. 3: A brand is a culture. A brand should have its own culture, from which every product derives. The product is not only a concrete representa3on of this culture, but also a means of communica3on. Culture means the set of values feeding the brand’s inspira3on. It is the source of the brand’s aspira3onal power. 4: A brand is a relaMonship. 4: A brand is a customer reﬂecMon. Reﬂec3on and target onen get mixed up. The target describes the brand’s poten3al purchasers or users. Reﬂec3ng the customer is not describing the target; rather, the customer should be reﬂected as he/she wishes to be seen as a result of using a brand. 6: A brand speaks to our self-image. Clues for strong idenMty prisms: There are few words to each facet. The words are not the same on diﬀerent facets. All words have strength and are not lukewarm: iden3ty is what makes a brand stand out. Sources of idenMty: Brand DNA Brands should not solely focus on the ideal expecta3ons of customers. This will make them average. It is up to each brand to pursue an ideal of its own. The brand’s typical products: The brand’s values must be embodied in the brand’s most highly symbolic products. Prototype semanMcs: If there were no deﬁni3on of a brand, the public would be able to come up with one, by taking a close look at the features. Just what is it, in a typical product, that conveys meaning? Roots last, trends don’t. A strong brand is always the product of a certain culture, hence of a set of values which it chooses to represent. The power of brand names: They are onen revealing of the brand’s inten3ons. Some brand names were chosen for subjec3ve reasons rather than for any apparent objec3ve or ra3onal ones. Brand characters: Emblems are a brand’s capital equity. It serves to symbolize brand iden3ty through a visual ﬁgure other than the brand name. To help iden3fy and recognize the brand. Emblems must iden3fy something before they signify anything. They are par3cularly useful when marke3ng to children, since the la^er favour pictures over text, or when marke3ng worldwide (every whisky has its own emblem). To guarantee the brand. To give the brand durability – since emblems are permanent signs – thereby enabling the company to capitalize on it. Thus Hermès’ legendary horse is the common emblem of ‘Equipage’, ‘Amazone’ and ‘Calèche’. To help diﬀeren3ate and personalize: an emblem transfers its personality to the brand. In doing so, it enhances brand value. But it also facilitates the iden3ﬁca3on process in which consumers are involved. Emblems epitomize more than one facet of brand idenMty; that is why they play such a crucial role in building iden3ty capital. Some characters serve to build a certain rela3onship and an emo3onal, prescrip3ve link between the brand and its public Geographical and historical roots: Iden3ty is born out of the early founding acts of a brand. Among these one ﬁnds products, channels, communica3ons and also places. Certain brands naturally convey the iden3ty of their country of origin. Others are totally interna3onal. The brand’s creator: early visions: Brand iden3ty cannot be dissociated from the creator’s iden3ty. When the creator passes away, the brand becomes autonomous. AdverMsing: content and form: Adver3sing writes the history of a brand, retailer or company. Brand essence: The concept of ‘brand essence’ asks in an atemporal and global way: what do you sell? What key value does the brand propose, stand for? No more than three! Do we need the brand essence concept? It has a managerial u3lity: trying to summarize the richness of an iden3ty. Aaker (1997), Dimensions of Brand Personality In personality psychology, the “Big Five” conceptualize human personality yet no parallel research has been conducted in consumer behavior on brand personality. Theore3cal framework of the brand personality construct by determining the number and nature of dimensions of brand personality (sincerity, excitement, competence, sophis3ca3on, and ruggedness). Brand personality: The set of human characteris3cs associated with a brand. The personality of a brand enables a consumer to express his or her own self, an ideal self. Research suggests that the greater the congruity between the human characteris3cs that consistently and dis3nc3vely describe an individual’s actual or ideal self and those that describe a brand, the greater the preference for the brand. Human personali3es are inferred on the basis of a person’s behavior, altude, appearance etc. while brand personality can be formed or inﬂuenced by any contact that the consumer has with the brand. Measuring Brand personality: To examine how the rela3onship between brand and human personality may drive consumer preference two types of brand personality scales are used (validity is ques3onable). Ad hoc scales: Composed of a set of traits ranging from 20 to 300 Brand personality scales: more theore3cal in nature but are based on human personality scales that have not been validated in the context of brands. Subjects were asked to write down the personality traits that ﬁrst came to mind when thinking about two brands in three types of product categories (think-feel dimensions, symbolic, and u3litarian). In the second stage, subjects were given an example of the personality of a brand in a symbolic product category (Wrangler jeans: macho, rough), a u3litarian product category (Pepto Bismal: calm, gregarious). To reduce the chances of focusing on a par3cular brand or category subjects were told to think of as many diﬀerent brands in diﬀerent product categories when you evaluate each trait. To isolate the most relevant traits, the cutoﬀ for the ﬁnal list of personality traits was a scale ra3ng of 6 (very descrip3ve), thereby leaving 114 personality traits for the study. 3 criteria guided the selecMon of a comprehensive and representaMve set of brands: Salient, well-known brands A wide variety of brands represen3ng a spectrum of personality types to enhance the scope of the scale A range of product categories, both symbolic and u3litarian to enhance scale generalizability Primarily posi3vely valenced traits were used because brands typically are linked to posi3ve associa3ons and because the ul3mate use of the scale is to determine the extent to which brand personality aﬀects the probability that consumers will approach or avoid products. The brand personality framework developed in this research suggests that one reason for the weak ﬁndings in the self-congruity literature may be due to the asymmetric rela3onship in the structure of brand versus brand personality. A reason why some personality traits might not align is that, for example, sincerity and excitement tap an innate part of human personality, sophis3ca3on and ruggedness tap a dimension that individuals desire but do not necessarily have. This suggests that one reason for the weak empirical support for self-congruity eﬀects (actual and ideal) is the focus on matching the personality between a brand and a consumer at the aggregate level (i.e. across all personality traits). Podcast: Vox Today Explained (2023), Pharrell Vuieon Pharrell Williams is named the new head of LV’s menswear. Louis Vui^on is characterized as a cultural brand more than a fashion brand. Its duty is to tap into culture, they need to ﬁnd the next cool thing. A common misconcep3on is that fashion houses solely focus on history and heritage. It is also about innova3on. Taking Pharrell on is a risk. Pharrell will infuse “newness” into the brand, to make it cool, create hype and desirability They have previously collaborated with supreme, known for cul3sm, mainstream, hypebeast culture. Virgil Abloh, founder of oﬀ-white broadened the customer base and aspira3onal customers for Louis Vui^on. Pharrell has similari3es with Virgil and Louis Vui^on and hopes to con3nue that legacy. Becoming a public ﬁgure is almost hand in hand with being a crea3ve director nowadays. Billionaire Boys Club was iden3ﬁed with Pharell Williams vibes. He has a taste for luxury. He also collaborated with Chanel and Karl Lagerfeld. He has experience and an understanding with fashion houses. Discussion of materials: Are you surprised by any of the brands in the Interbrand Best Global Brands ranking? Not really, because as I see it all of these brands are recognizable to me. They all hold a great share of their market. One might be surprised to see luxury fashion houses as they might perceive that they cater to speciﬁc audiences. They take goodwill and reputa3on into account. Financial forecast, role of the brand and brand strength to measure brand value. Why is it important for a brand to have a disMnct idenMty/personality? What helps to build this idenMty? A dis3nct iden3ty or personality is crucial because it diﬀeren3ates a brand from compe3tors and establishes an emo3onal connec3on with the consumer. This iden3ty is built through a consistent set of values, visual and cultural symbols, brand posi3oning, and product experience. According to Kapferer, a brand iden3ty aligns with its values and heritage, crea3ng coherence across its oﬀerings and fostering long-term customer loyalty. Elements like graphic iden3ty charters, consistent messaging, and unique cultural associa3ons are instrumental in reinforcing this dis3nct personality. What are the dimensions of brand personality? Can you think of a brand that is parMcularly known for each dimension? Dimensions of Brand Personality and Examples: Aaker (1997) iden3ﬁes ﬁve dimensions of brand personality: Sincerity (e.g., Dove, known for honesty and warmth) Excitement (e.g., Red Bull, associated with adventure and energy) Competence (e.g., IBM, known for reliability and intelligence) SophisMcaMon (e.g., Chanel, linked to elegance and glamour) Ruggedness (e.g., Jeep, associated with toughness and resilience) Should brands aim to max out on every dimension of brand personality? No, brands should not aim to excel in all dimensions. Overemphasizing all aspects can dilute a brand’s core iden3ty and confuse its target audience. Instead, brands should focus on speciﬁc dimensions that align with their iden3ty and resonate with their intended audience. A^emp3ng to maximize all traits can result in a brand losing its authen3city and dis3nc3veness. How would you describe the brand personaliMes of Louis Vuieon and Pharrell Williams? Where do they and where do they not overlap? What are the chances and risks of this collaboraMon? Louis Vuieon’s Brand Personality: Known for sophis3ca3on, luxury, and cultural inﬂuence. It embodies elegance and exclusivity but has also tapped into modern culture through innova3ve collabora3ons. Pharrell Williams’s Brand Personality: Pharrell brings a mix of crea3vity, trendiness, and cultural relevance. Known for excitement and a sense of innova3on, his personality aligns with brands that push the boundaries of conven3onal luxury. Overlap and Diﬀerences: Both share an appeal to high culture, exclusivity, and innova3on, yet Pharrell brings a modern, eclec3c style that contrasts with Louis Vui^on’s heritage-driven sophis3ca3on. This blend could make the brand more relatable to younger audiences, adding a fresh, “hypebeast” quality. Risks and OpportuniMes of the CollaboraMon: This collabora3on could enhance Louis Vui^on’s cultural relevance and broaden its appeal to younger, diverse audiences. However, there’s a risk that Pharrell’s experimental style might alienate tradi3onal Louis Vui^on customers who value its classic luxury image. Balancing this dynamic will be key to maintaining brand coherence while engaging new customer segments. In class: Brand idenMty prism for Louis Vuieon Physique: LV logo, Brown square pa^ern, ﬂower monogram Personality: elegant, modern, cultured, heritage, extravagant, classy Culture: French luxury, cransmenship, legacy, crea3vity and innova3on (lvmh) Rela3onship: collabora3on with street wear, musicians, celebri3es, excitement Reﬂec3on: celebri3es, young inﬂuencers, modern man/woman, open to innova3on Self-image: fashion-forward, exclusive, pres3ge, aﬄuent, abundant, “I made it.” Tutorial 3: 07/11/2024 Required PreparaMon Materials Bajaj and Bond (2017), Beyond Beauty: Design Symmetry and Brand Personality Links to an external site. Proposes that symmetry plays an addi3onal, nuanced role in the communica3on of brand personality. Results of four experiments reveal that asymmetry in visual brand elements is associated by consumers with brand excitement, and that the eﬀect is driven in part by the experience of subjec3ve arousal. A consistent ﬁnding is that posi3ve esthe3c responses predict a variety of desirable outcomes, including brand liking and choice. Bajaj and Bond predict and demonstrate that symmetry in visual brand elements is nega3vely associated with consumer percep3ons of brand excitement, and that this eﬀect is driven in part by subjec3ve arousal. Visual symmetry is deﬁned as the extent to which an image can be reﬂected about a central axis. Evolu3onary approaches argue that preference for symmetry onen carries reproduc3ve advantages e.g., physical symmetry is a reliable indicator of gene3c quality in poten3al mates. A prominent informa3on processing account is based on the ﬂuency principle: symmetric pa^erns are easier to process than asymmetric pa^erns because they contain less informa3on. Researchers have associated esthe3c beauty with a range of desirable outcomes, including an immediate desire to own and increased inclina3on to display or care for a product. In research on brand logos, Henderson and Cote (1998) iden3ﬁed a consistent posi3ve rela3onship between visual harmony (comprised of symmetry and balance), subjec3ve ra3ngs of those logos, and later recogni3on. Subsequent research revealed that visually harmonious typefaces were perceived as more “pleasing” and “reassuring”. As a conceptual framework, we adopt Aaker’s (1997) seminal ﬁve-factor model, which includes trait dimensions of sincerity, competence, excitement, ruggedness, and sophis3ca3on. Sundar and Noseworthy (2016) demonstrate that exci3ng brands beneﬁt from sensory viola3ons of expecta3ons (such as when the tac3le feel of a product is incongruent with its packaging). The brand itself will be iden3ﬁed as the cause of the evoked arousal, and will be perceived as more exci3ng (i.e., possessing the trait-like characteris3cs of “fun,” “daring,” etc.). This proposi3on is consistent with the well-established principle that arousal is a^ributed and labeled based on salient environmental cues. Brands were also perceived to be more exci3ng when their logos were more elaborate, less parallel, or made greater use of the golden ra3o. As predicted by H1 , results revealed that brands with asymmetric logos were perceived to be more exci3ng than brands with symmetric logos. The arousal induced by visual asymmetry appeared to “spill over” to percep3ons of the brand itself. When choosing imagery for the exci3ng fragrance brand, par3cipants rated symmetric images signiﬁcantly less appropriate than asymmetric images. When selec3ng imagery for the calming brand, however, par3cipants rated symmetric artwork signiﬁcantly more appropriate than asymmetric artwork. Using diﬀerent sMmuli, methodologies, and response tasks, four studies supported this asserMon: symmetry was nega3vely associated with percep3ons of brand excitement (study 1), the inﬂuence of symmetry was traced to subjec3ve arousal (studies 2 and 3), and the consequences of symmetry for brand percep3ons inﬂuenced downstream choices (study 4). EXAM: A posi3ve B means a posi3ve rela3onship. If it is signiﬁcant but the B has a nega3ve coeﬃcient we want to reduce this element. A posi3ve Beta indicates that increasing a characteris3c increases the perceived personality dimension. A nega3ve Beta indicates that increasing a characteris3c decreases the perceived personality dimension. Assump3on! When the brands are unfamiliar!! Luﬀarelli et al. (2019a), A Study of 597 Logos Shows Which Kind is Most EﬀecMveLinks to an external site. They discovered descrip3ve logos (those that include visual design elements that communicate the type of product) more favorably aﬀect consumers’ brand percep3ons than nondescrip3ve ones (logos that are not indica3ve of the type of product). They also found that descrip3ve logos are more likely to improve brand performance — unless consumers associate your product with sad or unpleasant things, in which case a nondescrip3ve logo is probably be^er. A logo is a ubiquitous communica3on tool. It is a brand element that is frequently seen by stakeholders, par3cularly consumers. What Power Does a DescripMve Logo Have? Our studies and analyses reveal that it is easier for consumers to visually process descrip3ve logos and understand what a brand markets as a result. We also found that, compared with nondescrip3ve logos, descrip3ve logos: make brands appear more authen3c in consumers’ eyes more favorably impact consumers’ evalua3ons of brands more strongly increase consumers’ willingness to buy from brands boost brands’ net sales more The results showed that a descrip3ve logo has a greater posi3ve eﬀect on sales than a nondescrip3ve one. Descrip3ve logos were more onen associated with a higher willingness to buy. However, this eﬀect weakens when consumers are familiar with a brand. We also found that descrip3ve logos had a nega3ve eﬀect on brands that market products or services associated with sad or unpleasant things, like palm oil, funeral homes, and bug repellents. Brands that do not want to be strongly associated with a speciﬁc product should also avoid descrip3ve logos. Metacogni3on: easy processing and greater authen3city from descrip3ve logos. Luﬀarelli et al. (2019b), Let the Logo Do the Talking: The Inﬂuence of Logo DescripMveness on Brand EquityLinks to an external site. If you have a big product range, then a more descrip3ve logo is counterproduc3ve. Nega3vely valanced brands want less descrip3on. Valence: emo3onal associa3on we give to something. P-value less than 0.05 to be signiﬁcant. Using a mul3method research approach across six studies, the authors demonstrate that more (vs. less) descrip3ve logos can posi3vely inﬂuence brand evalua3ons, purchase inten3ons, and brand performance. Can logo descrip3veness inﬂuence brand equity? If so, what variables can moderate this rela3onship and what mechanism underlies it? S3muli that are easier to process are perceived to be more trustworthy and credible and trustworthiness and credibility are key dimensions of perceived brand authen3city. 2 variables—brand familiarity and product valence—moderate the rela3onship between logo descrip3veness and brand equity and shed some light on a mechanism underlying this rela3onship. Extant work shows that the fonts, designs, and forms of s3muli such as logos can aﬀect brand equity by elici3ng speciﬁc brand impressions. For example, logo dynamism, incompleteness, and asymmetry, can inﬂuence consumer behavior by evoking impressions of modernity, innova3veness, and excitement, respec3vely. For instance, brand names that convey a product beneﬁt (e.g., “LifeLong Luggage”) are processed more easily than those that do not. Brand authen3city is a “subjec3ve evalua3on of genuineness ascribed to a brand.” H1: (a) Compared with less descrip3ve logos, more descrip3ve logos elicit stronger impressions of authen3city. (b) This eﬀect is mediated by ease of processing. The more descrip3ve logos had sta3s3cally equivalent eﬀects across the two brand replicates. In fact, the more (vs. less) descrip3ve logo had a more posi3ve indirect eﬀect on impressions of authen3city through ease of processing for both the basketball equipment manufacturer. H2: Compared with less descrip3ve logos, more descrip3ve logos posi3vely inﬂuence (a) brand evalua3ons and (b) purchase inten3ons. (c) Logo-elicited impressions of authen3city meditate these eﬀects. When consumers are familiar (vs. unfamiliar) with a brand, they are thus less likely to update their impressions of brands following exposure to a more descrip3ve logo. We therefore propose that the posi3ve eﬀect of logo descrip3veness on consumer responses should be greatly a^enuated for brands that are familiar to consumers. As expected, the logo descrip3veness × replicates interac3on was not a signiﬁcant predictor of impressions of authen3city and brand evalua3ons, showing that logo descrip3veness had sta3s3cally equivalent eﬀects across the two brand replicates. H3: For brands that are familiar to consumers, more (vs. less) descrip3ve logos have a less posi3ve eﬀect on (a) brand evalua3ons and (b) purchase inten3ons. (c) Logo-elicited impressions of authen3city meditate these eﬀects. This analysis showed that logo descrip3veness was marginally signiﬁcant and posi3vely associated with stronger impressions of authen3city, which in turn led to higher purchase inten3ons. Speciﬁcally, when par3cipants were unfamiliar with the brand, the more descrip3ve logo resulted in signiﬁcantly more favorable brand evalua3ons than the less descrip3ve logo. However, when par3cipants were familiar with the brand, the more descrip3ve logo resulted only in marginally more favorable brand evalua3ons than the less descrip3ve. The more descrip3ve logo also led to signiﬁcantly less favorable brand evalua3ons when par3cipants were familiar with the brand than when they were unfamiliar with it. H4: For brands that market nega3vely valenced products, more (vs. less) descrip3ve logos have a nega3ve eﬀect on (a) brand evalua3ons and (b) purchase inten3ons. (c) Logo-elicited impressions of authen3city meditate these eﬀects. H5: Compared with less descrip3ve logos, more descrip3ve logos posi3vely inﬂuence brands’ ﬁnancial performance. IV: descrip3veness DV: Brand Evalua3on Moderator: Familiarity Low p-value means higher signiﬁcance. Kim and Lim (2018), A comprehensive review on logo literature:research topics, ﬁndings, and future direcBonsLinks to an external site. We iden3fy 2 theore3cal founda3ons –i.e. corporate visual iden3ty and processing ﬂuency – that explain ﬁrms’ strategic decisions on logos and consumers’ responses to logos respec3vely. Speciﬁcally, we found two major theore3cal viewpoints from ﬁrms’ and consumers’ perspec3ves in the current logo literature. That is, based on the organiza3onal theory, corporate visual iden3ty (CVI) explains the role of logos in, delivering, and communica3ng corporate values/iden33es from ﬁrms’ perspec3ve. Abra^and Kleyn (2012) insists that corporate idenBty (CI), which can be deﬁned as ‘an organiza3on’s strategic choices and its expression thereof,’ is one of such intangible capabili3es. In other words, CI pertains to what ideal image9 a company wants to have and the way in which it is expressed to internal and external stakeholders. Prior research indicates that a company’s image can be inﬂuenced by three components: how stakeholders perceive a company’s acts in the market (i.e. organiza3onal behavior), how a company communicates its messages with stakeholders (i.e. communica3on), and how a company visually represents itself (i.e. symbolism). Symbolism has received more a^en3on because it can increase the visibility of a company while having a role in communica3on with stakeholders. Corporate Visual IdenBty (CVI) refers to various visual cues that communicate a company’s CI to stakeholders. Visual cues have posi3ve eﬀects on persuasion, and engagement. A company’s CVI enhances its visibility as well as recognizability and helps communica3on with employees as well as consumers As a visual representa3on of a company’s CI, the CVI should be also adapted or changed when any strategic changes are made. Processing ﬂuency is deﬁned as ‘the subjec3ve experience of ease with which people process informa3on’. Out of several forms of processing ﬂuency, two speciﬁc forms are of interest in the context of logo percep3on – i.e. perceptual ﬂuency and conceptual ﬂuency. Perceptual ﬂuency refers to a situa3on in which consumers create a feature-based representa3on in memory when they are exposed to a s3mulus, and thus experience faster processing when the s3mulus is viewed at a later 3me. Conceptual ﬂuency refers to a situa3on in which consumers create a meaning-based representa3on of a s3mulus, and experience faster processing when the s3mulus is viewed at a later 3me. Bu^leand Westoby (2006) suggested that logos can be categorized into four types: typographical, ﬁguraBve, abstract logos, or combinaBons of these. Henderson and Cote (1998) examined how design dimensions (e.g. ac3ve, balance, cohesive, complex, depth, durable, organic, parallel, propor3on, repe33on of elements, representa3ve, round,and symmetric) inﬂuence consumer responses (e.g. recogni3on, aﬀect, meaning, and perceived familiarity). They also iden3ﬁed three universal design dimensions – elaborate-ness, naturalness, and harmony. Based on these ﬁndings, they suggested detailed guide-lines for selec3ng or modifying logos that meet three diﬀerent strategic objec3ves – high recogni3on, low investment, and high image. By extending these ﬁndings, Henderson, Cote, Leong, and Schmi^ (2003) conﬁrmed that the eﬀects of three universal design dimensions were consistently found across Asian countries and the United States. Although consumer responses toward the three design dimensions are universal across 10 diﬀerent countries, logo designs are onen modiﬁed according to the ﬁrm’s unique strategy in a certain country. 2 types of logo redesign – i.e. evolu3onary logo redesign and revolu3onary logo redesign – depending on a company’s strategic preference. Airey (2009) found that evolu3onary logo redesign is mostly used by ﬁrms who are market leaders to further expand their customer base or to communicate their brand strategy updates. On the other hand, revolu3onary logo redesign is preferred when ﬁrms change their strategies signiﬁcantly or when they want to revamp their image by dispelling any nega3ve consumer percep3on. As a remedy for possible nega3ve consumer responses toward the newly designed logos research emphasizes the beneﬁts of using ﬁgura3ve (vs. abstract) logos. Henderson and Cote (1998) explained that ﬁgura3ve logos that represent well-known and recognizable objects are more eﬀec3ve in inducing correct recogni3on and leaving a favorable impression. Empirical studies further show that ﬁgura3ve logos have a posi3ve eﬀect on brand memoriza3on, brand associa3on forma3on, and aﬀec3ve reac3ons. For be^er understanding of the role of typeface, Henderson et al. (2004) suggested four dimensions of typeface impression: pleasing (e.g. liked, warm, and a^rac3ve), engaging (e.g. Interes3ng and emo3onal), reassuring (e.g. calm, formal, honest, familiar, and mainstream),and prominent (e.g. strong and masculine). By using these dimensions, they found rela3onships between typeface impressions and typeface characteris3cs. For example, the natural, harmonious, and ﬂourish typeface increases the pleasing impression, whereas the elaborate typeface decreases it. Furthermore, while the weight of the typeface increases the prominence impression, the natural, harmonious, and ﬂourish typeface diminishes it. Lieven et al. (2015) found that a heavier and more angular shaped logo increased brand masculinity, whereas a slender and more rounded shaped logo increased brand femininity. Another stream of research studied the eﬀect of logo frames on consumers’ percep3on of ﬁrms (e.g. Cutright, 2012; Fajardo et al.,2016). Logo frame refers to the ‘graphic representa3on of a physical boundary surrounding a brand logo’. Prior research in the ﬁelds of color psychology has suggested that colors can be associated with emo3ons (Jacobs, Keown, Worthley, & Ghymn, 1991;Wexner, 1954).17 Moreover, regarding color preferences, Whitﬁeld and Wiltshire (1990)found that people generally prefer hues in a descending order; for example, people prefer blue the most, and green, purple, red, yellow in order. Researchers have also studied the role of logo color in market compe33on dynamics and ﬁrm valua3on. A market leader’s logo would be a key node in consumers’ memory networks and thus greatly inﬂuence the percep3ons of compe3ng brands (Jacoby, 2001; Kamins, Alpert, & Perner, 2007). Subtle contextual changes in the loca3on of an ad element such as brand logo inﬂuence consumers’ perceptual ﬂuency, brand preference, and brand choice. They argued that the changes of logo loca3on within adver3sing can increase processing ﬂuency with repeated exposures, which in turn lead to a stronger memory trace and increased preference for the brand. With a changing shopping environment in which screen-based media and Internet-enabled mobile devices are more available, it is noteworthy that animated logos can a^ract a lot of a^en3on from consumers and businesses (Guido, Pichierri, Nataraajan, &Pino, 2016; Rapp et al., 2013). Krishnan, Kellaris, and Aurand (2012) expanded the logo literature by paying a^en-3on to the auditory version of a visual logo, that consists ofa series of musical notes that include auditory informa3on associated with brand. For example, ‘Bada Ba Ba Ba, I’m Lovin’ It’ Your Side’ is the sonic logo of McDonald’s. Video:The Wall Street Journal (2023), Inside Burger King’s New Logo StrategyLinks to an external site. Burger King rebrand: Gradients and ar3ﬁcial colors were popular in the 90s. One of the key strategic impera3ves of the redesign was to communicate the quality of the food. All of the colors in the iden3ty correspond with the product speciﬁci3es, like the “actual” color of the bun or tomato. People see color ﬁrst, then shape, then numbers and words. Current trends in logos are a certain degree of ﬂatness and lack of shine. The new logo is meant to feel retro and nostalgic. What be^er way to incorporate sustainability by bringing back elements that you once used before. Burger King created a custom font in the shape of its food. Highlights its roots. Emphasizes the whopper. Baja and Bond: Discussion of materials: What is the connecBon between brand elements and brand personality/idenBty? Brand elements, like logos and names, directly communicate and reinforce brand personality and iden3ty. Bajaj and Bond (2017) highlight that asymmetry in visual elements, such as logos, onen conveys an exci3ng personality. They found that asymmetric logos induce subjec3ve arousal, which translates into percep3ons of brand excitement. Symmetry, on the other hand, conveys calmness or sophis3ca3on, aligning with traits like sincerity or competence. This underscores how design elements are not just decora3ve but integral to shaping consumer percep3on of a brand’s iden3ty, such as whether it is perceived as “exci3ng” or “calming.” Based on Bajaj and Bond (2017), which logos should be used to create which brand personality? Based on knowledge of brand logos, do you agree or disagree with these research ﬁndings? Think about speciﬁc examples! Bajaj and Bond's research suggests that: ExciBng Brand Personality: Asymmetric logos are suited for brands that want to evoke excitement. For example, an asymmetric logo might work well for tech companies or sports brands known for innova3on or dynamism. Logos like Nike’s “swoosh” evoke movement and excitement, aligning well with the ac3ve, daring image the brand embodies. Calming or Competent Brand Personality: Symmetric logos are more appropriate for brands emphasizing reliability, trustworthiness, and calmness. Financial ins3tu3ons or healthcare brands onen adopt symmetric logos to convey stability and assurance, like the symmetrical logos of Chase Bank or Blue Cross Blue Shield. In general, I agree with these ﬁndings. For instance, Coca-Cola’s swirling, ﬂuid logo feels more dynamic and exci3ng than the simpler, balanced logos of brands like IBM or Ford, which convey reliability and sophis3ca3on. What makes a meaningful brand name? Again, can you think of real-world examples that agree/disagree with the research ﬁndings? A meaningful brand name conveys a clear product beneﬁt, is easy to process, and creates a strong associa3on with the brand's values or purpose. The document highlights that brands with descrip3ve names (such as “LifeLong Luggage”) help consumers quickly understand the beneﬁt, making them memorable and more favorable. Examples: Agree: Brand names like “PayPal” or “Snapchat” oﬀer clear product beneﬁts and align with the func3on or personality of the brand, making them instantly recognizable and easy to remember. Disagree: While descrip3ve names are advantageous, some iconic brands like “Apple” or “Amazon” use non-descrip3ve names. These names have built strong iden33es through brand associa3ons rather than explicit product descrip3ons, showing that an abstract name can succeed with the right branding strategy. In conclusion, while descrip3ve names and visual asymmetry/symmetry in logos onen support brand personality eﬀec3vely, excep3ons exist where abstract names or unconven3onal logos thrive due to strong, consistent brand storytelling and posi3oning. Tutorial 4: 11/11/2024 Web Lecture 1: OperaBonalizaBon: Taking a meaningful but vague concept and turn it into a precise measurement. Create a precise deﬁni3on of what is measured. Determining the method of measurement. Choosing a level and range of measurement. How is adverBsing eﬀecBveness measured? This model assumes that customers have some awareness and knowledge of a product before actually purchasing it. Any stage could be a measure of adver3sing eﬀec3veness. A variable is the quan3ﬁable data collected from individuals, objects, or phenomena measurement method is applied to assess a theore3cal construct. Not all variables are equal. Diﬀerent types of variables are called levels (or scales) of measurement: (NOIR) - Nominal scale: “clicked the ad” vs. “did not click the ad”. Categories only. - Ordinal scale: Rank ads from most likes to least likes. Categories and ranking. - Interval scale: Rate ads on a scale from 1-10. Categories, ranking, and equal distance. - RaBo scale: Measure the 3me it takes to click on the ad. Categories, ranking, equal distance, and meaningful 0 (but can’t be less than 0). Data can be transformed from one level to another. TransformaBons are unidirecBonal: Ra3o – Interval – Ordinal- Nominal (you can’t go from nominal to ra3onal). Transforming data results in a loss of informa3on. Discrete variables: A discrete variable is one that can only take on dis3nct, separate variables, typically counts of items or occurrences. For example, the number of students in class. ConBnuous variables: A con3nuous variable is one that can take on any value within a given range, represen3ng measurements that can be inﬁnitely divided. For example, the 3me students prepare for class. Assigning a role to a variable: Predictor variables (independent variables): to do the explaining. Outcome variables (dependent variables): to be explained. Reliability: The degree to which a measurement or assessment tool produces stable and consistent results over 3me. Validity: The extent to which a tool or method accurately measures the construct it is intended to assess. Across diﬀerent scales. Experimental research: Deliberate manipula3on with random assignment to condi3ons. Non-experimental research: Observa3onal study without manipula3on or random assignment. Quasi-experiments: Structured observa3on without random-assignment, using methods to control for confounding variables. Levels of Measurement Exercise: Look at the following examples of data. For each example, assign the correct level of measurement. We will discuss this exercise in class. 1. Brand names of diﬀerent sod drinks: Nominal 2. Rankings of top 5 brands based on popularity (1st, 2nd, 3rd, etc.): Ordinal 3. Temperature in Celsius of diﬀerent beverages: Interval (can go below 0) 4. Number of bofles sold by a brand in a month: Ra3o 5. Colors preferred by customers for a product packaging: Nominal 6. Years of experience of employees in a company: Ra3o. (Numbers have meaning) 7. Levels of a loyalty program (Bronze, Silver, Gold, PlaBnum): Ordinal 8. pH levels of diﬀerent skincare products.: Interval (It’s about the spacing between numbers). Next, look at a more diﬃcult real-world example, the Net Promoter Score (NPS): The Net Promoter Score (NPS) is a widely used metric in business to measure customer loyalty and saBsfacBon. Businesses use the NPS as a measure for gauging the customer's overall sa3sfac3on with a company's product or service and the customer's loyalty to the brand. It helps companies iden3fy their promoters (loyal enthusiasts) and detractors (unhappy customers), allowing them to tailor their customer strategies accordingly. How It's Calculated: Customers are asked a single ques3on: "How likely are you to recommend [Product/Service/Brand] to a friend or colleague?" Customers rate their likelihood on a scale from 0 to 10, where 0 is "Not at all likely" and 10 is "Extremely likely". Based on their ra3ng, customers are classiﬁed into three categories: o Promoters (9-10): Loyal enthusiasts who will keep buying and refer others. o Passives (7-8): Sa3sﬁed but unenthusias3c customers who are vulnerable to compe33ve oﬀerings. o Detractors (0-6): Unhappy customers who can damage your brand through nega3ve word-of-mouth. The NPS is then calculated using the formula: NPS = % of Promoters - % of Detractors. The resul3ng score can range from -100 (if every customer is a Detractor) to 100 (if every customer is a Promoter). QuesBons: What is the level of measurement of the iniBal NPS quesBon? o “How likely are you to recommend [Product/Service/Brand] to a friend or colleague?" with responses on a scale from 0 to 10. - Interval scale. What is the level of measurement of the calculated NPS score? o “NPS = % of Promoters - % of Detractors.” - RaBo scale. Navarro et al. (2020), Learning StaBsBcs with JASPLinks to an external site. - Chapter 2 Links to an external site.(focus on pp. 13 – 41). Note: focus on understanding the concepts from the web lecture Chapter 2: A brief introducBon to research design Psychological measurement has “things to be measured” (e.g. age, likes, gender) and “the measurement itself” (e.g. 33 years, anchovies, male). OperaBonalizaBon: deﬁning your measurement. The process by which we take a meaningful but somewhat vague concept and turn it into precise measurement. Being precise about what you are trying to measure, determining the method you will use to measure it, deﬁning the set of allowable values that the measurement can take. A theoreBcal construct. This is the thing that you’re trying to take a measurement of, like “age”, “gender” or an “opinion”. A theore3cal construct can’t be directly observed, and onen they’re actually a bit vague. A measure. The measure refers to the method or the tool that you use to make your observa3ons. A ques3on in a survey, a behavioral observa3on or a brain scan could all count as a measure. An operaBonalizaBon. The term “opera3onaliza3on” refers to the logical connec3on between the measure and the theore3cal construct, or to the process by which we try to derive a measure from a theore3cal construct. A variable. A variable is what we end up with when we apply our measure to something in the world. That is, variables are the actual “data” that we end up with in our data sets. Scales of measurement: A concept for dis3nguishing between diﬀerent types of variables. A nominal scale variable (also referred to as a categorical variable) is one in which there is no par3cular rela3onship between the diﬀerent possibili3es. An ordinal scale variable is one in which there is a natural, meaningful way to order the diﬀerent possibili3es, but you can’t do anything else (e.g. ﬁnishing posi3on in a race). You cannot average these answers. In the case of interval scale variables the diﬀerences between the numbers are interpretable, but the variable doesn’t have a “natural” zero value. A good example of an interval scale variable is measuring temperature in degrees Celsius. With a raBo scale variable, in which zero really means zero, and it’s okay to mul3ply and divide. A good psychological example of a ra3o scale variable is response 3me (RT). A conBnuous variable is one in which, for any two values that you can think of, it’s always logically possible to have another value in between (ra3o and interval scale). A discrete variable is, in eﬀect, a variable that isn’t con3nuous. For a discrete variable it’s some3mes the case that there’s nothing in the middle (nominal and interval). Likert scale: Which of the following best describes your opinion of the statement that “all pirates are freaking awesome”? and then the op3ons presented to the par3cipant are these: (1) Strongly disagree (2) Disagree (3) Neither agree nor disagree (4) Agree (5) Strongly agree This set of items is an example of a 5-point Likert scale, in which people are asked to choose among one of several clearly ordered possibili3es. Discrete, and onen thought of as a quasi-interval scale. The reliability of a measure tells you how precisely you are measuring something. It refers to the repeatability or consistency of your measurement. The validity of a measure tells you how accurate the measure is. Test-retest reliability. This relates to consistency over 3me. If we repeat the measurement at a later date do we get a the same answer? Inter-rater reliability. This relates to consistency across people. If someone else repeats the measurement (e.g., someone else rates my intelligence) will they produce the same answer? Parallel forms reliability. This relates to consistency across theore3cally-equivalent measurements. If I use a diﬀerent set of bathroom scales to measure my weight does it give the same answer? Internal consistency reliability. If a measurement is constructed from lots of diﬀerent parts that perform similar func3ons (e.g., a personality ques3onnaire result is added up across several ques3ons) do the individual parts tend to give similar answers. The Independent Variable is the variable that you use to do the explaining. The Dependent Variable is the variable being explained. The key feature of experimental research is that the researcher controls all aspects of the study, especially what par3cipants experience during the study. In par3cular, the researcher manipulates or varies the predictor variables (IVs) but allows the outcome variable (DV) to vary naturally. The idea here is to deliberately vary the predictors (IVs) to see if they have any causal eﬀects on the outcomes. Moreover, in order to ensure that there’s no possibility that something other than the predictor variables is causing the outcomes, everything else is kept constant or is in some other way “balanced”, to ensure that they have no eﬀect on the results. The standard solu3on to inﬂuence is randomizaBon. That is, we randomly assign people to diﬀerent groups, and then give each group a diﬀerent treatment (i.e., assign them diﬀerent values of the predictor variables). Non-experimental research is a broad term that covers “any study in which the researcher doesn’t have as much control as they do in an experiment”. dis3nc3on worth making between two types of non-experimental research is the diﬀerence between quasi-experimental research and case studies. 5 diﬀerent types of validity: Internal validity: refers to the extent to which you are able draw the correct conclusions about the causal rela3onships between variables. It’s called “internal” because it refers to the rela3onships between things “inside” the study. Failure of internal validity could occur because the study doesn’t properly tease apart the causal rela3onships between the diﬀerent variables. External validity: relates to the generalizability or applicability of your ﬁndings. That is, to what extent do you expect to see the same pa^ern of results in “real life” as you saw in your study. The experiment lacks external validity because you are conduc3ng a psychological study with psychology students. Construct validity: a ques3on of whether you’re measuring what you want to be measuring. A measurement has good construct validity if it is actually measuring the correct theore3cal construct. Face validity: simply refers to whether or not a measure “looks like” it’s doing what it’s supposed to, nothing more. If I design a test of intelligence, and people look at it and they say “no, that test doesn’t measure intelligence”, then the measure lacks face validity. Ecological validity: The idea is that, in order to be ecologically valid, the en3re set up of the study should closely approximate the real-world scenario that is being inves3gated. Threats to validity: Confounder: A confounder is an addi3onal, onen unmeasured variable that turns out to be related to both the predictors and the outcome. The existence of confounders threatens the internal validity of the study because you can’t tell whether the predictor causes the outcome, or if the confounding variable causes it. Artefact: A result is said to be “artefactual” if it only holds in the special situa3on that you happened to test in your study. The possibility that your result is an artefact describes a threat to your external validity, because it raises the possibility that you can’t generalize or apply your results to the actual popula3on that you care about. History eﬀects refer to the possibility that speciﬁc events may occur during the study that might inﬂuence the outcome measure. For instance, something might happen in between a pre-test and a post-test. Alterna3vely, it might be that you’re looking at a paper from an older study that was perfectly valid for its 3me, but the world has changed enough since then that the conclusions are no longer trustworthy. MaturaBonal eﬀects: About change over 3me. However, matura3on eﬀects aren’t in response to speciﬁc events. Rather, they relate to how people change on their own over 3me. We get older, we get 3red, we get bored, etc. An important type of history eﬀect is the eﬀect of repeated tesBng. Suppose I want to take two measurements of some psychological construct (e.g., anxiety). One thing I might be worried about is if the ﬁrst measurement has an eﬀect on the second measurement. In other words, this is a history eﬀect in which the “event” that inﬂuences the second measurement is the ﬁrst measurement itself! SelecBon bias: When the selec3on of individuals, groups, or data for analysis is in such a way that proper randomiza3on is not achieved. Homogeneous afriBon: The a^ri3on eﬀect is the same for all groups, treatments or condi3ons. Heterogeneous afriBon: The a^ri3on eﬀect is diﬀerent for diﬀerent groups. Also called diﬀeren3al a^ri3on, a kind of selec3on bias caused by the study itself. These factors can cause lack of external or internal validity. Non-response bias: It happens when people who are unable or unwilling to take part in a research study systema3cally diﬀer from those who do. It can lead to missing data. Regression to the mean refers to any situa3on where you select data based on an extreme value on some measure. Because the variable has natural varia3on it almost certainly means that when you take a subsequent measurement the later measurement will be less extreme than the ﬁrst one, purely by chance. Experimenter bias: The basic idea is that the experimenter, despite the best of inten3ons, can accidentally end up inﬂuencing the results of the experiment by subtly communica3ng the “right answer” or the “desired behavior” to the par3cipants. ReacBvity or Demand Eﬀects: People alter their performance because of the a^en3on that the study focuses on them. The placebo eﬀect is a speciﬁc type of demand eﬀect that we worry a lot about. It refers to the situa3on where the mere fact of being treated causes an improvement in outcomes. All other threats to external validity: Situa3on, measurement and sub-popula3on eﬀects. Data fabricaBon: Some3mes, people just make up the data. This is occasionally done with “good” inten3ons. For instance, the researcher believes that the fabricated data do reﬂect the truth, and may actually reﬂect “slightly cleaned up” versions of actual data. On other occasions, the fraud is deliberate and malicious. Hoaxes: Hoaxes share a lot of similari3es with data fabrica3on, but they diﬀer in the intended purpose. A hoax is onen a joke, and many of them are intended to be (eventually) discovered. Onen, the point of a hoax is to discredit someone or some ﬁeld. Data misrepresentaBon: The data don’t actually say what the researchers think they say. Study “misdesign”: A researcher designs a study that has built-in ﬂaws, and those ﬂaws are never reported in the paper. Data mining & post hoc hypothesizing: Another way in which the authors of a study can more or less misrepresent the data. If you keep trying to analyze your data in lots of diﬀerent ways, you’ll eventually ﬁnd something that “looks” like a real eﬀect but isn’t. PublicaBon bias & self-censoring: A pervasive bias is “non-repor3ng” of nega3ve results. Goss-Sampson (2020), StaBsBcal Analysis in JASPLinks to an external site. Some concepts in frequenBst staBsBcs (pp. 161 – 164) FrequenBst staBsBcs: The most commonly taught and used sta3s3cal methodology. It describes sampled data based on the frequency or propor3on of the data from repeated studies through which the probability of events is deﬁned. It uses rigid frameworks including hypothesis tes3ng, p values and conﬁdence intervals etc. Hypothesis tesBng: “a supposi3on or proposed explana3on made based on limited evidence as a star3ng point for further inves3ga3on”. The null hypothesis (H0) is the default posi3on for most sta3s3cal analyses in which it is stated that there is no rela3onship or diﬀerence between groups. The alternaBve hypothesis (H1) states that there is a rela3onship or diﬀerence between groups has on a direc3on of diﬀerence/rela3onship. Hypothesis tesBng: The strictly predeﬁned procedures used to accept or reject the hypotheses and the probability that this could be purely by chance. The conﬁdence at which a null hypothesis is accepted or rejected is called the level of signiﬁcance. The level of signiﬁcance is denoted by α, usually 0.05 (5%). This is the level of probability of accep3ng an eﬀect as true (95%) and that there is only 5% of the result being purely by chance. Type I error: The probability of rejec3ng the null hypothesis, when it is, in fact, true. Type II error: The probability of accep3ng the null hypothesis when it is not true. StaBsBcal power: The probability that the test will reject the null hypothesis when the alterna3ve hypothesis is true. For a set level of signiﬁcance, if the sample size increases, the probability of Type II error decreases, which therefore increases the sta3s3cal power. TesBng the hypothesis: 1. Deﬁne the null (or alterna3ve) hypothesis. 2. Set the criterion level α, usually 0.05 (5%), collect and analyze sample data. 3. Use a test sta3s3c to determine how far (or the number of standard devia3ons) the sample mean is from the popula3on mean stated in the null hypothesis. 4. The test sta3s3c is then compared to a cri3cal value. This is a cut-oﬀ value deﬁning the boundary where less than 5% of the sample means can be obtained if the null hypothesis is true. Conclusion: If the probability of obtaining a diﬀerence between the means by chance is less than 5% when the null hypothesis has been proposed, the null hypothesis is rejected, and the alterna3ve hypothesis can be accepted. The p-value is the probability of obtaining a sample outcome, given that the value stated in the null hypothesis is true. If the p-value is less than 5% (p <.05) the null hypothesis is rejected. When the p- value is greater than 5% (p >.05), we accept the null hypothesis. Eﬀect size: A standard measure that can be calculated from any number of sta3s3cal analyses. The eﬀect size indicates the magnitude of the diﬀerence between the groups. So, for example, if there was a signiﬁcant decrease in 100m sprint 3mes in a supplement compared to a placebo group, the eﬀect size would indicate how much more eﬀec3ve the interven3on was. Some common eﬀect sizes: In small datasets, there may be a moderate to large eﬀect size but no signiﬁcant diﬀerences. This could suggest that the analysis lacked sta3s3cal power and that increasing the number of data points may show a signiﬁcant outcome. Conversely, when using large datasets, signiﬁcant tes3ng can be misleading since small or trivial eﬀects may produce sta3s3cally signiﬁcant results. PARAMETRIC vs NON-PARAMETRIC TESTING: When it is impossible to collect data from the whole popula3on. PopulaBon parameters are used to see how well the collected data reﬂects the popula3on in terms of the popula3on mean (standard devia3ons, propor3ons etc.). Parametric sta3s3cs require assump3ons to be made of the data including the normality of distribu3on and homogeneity of variance. There are no parameters associated with ordinal (non-parametric) data. The non-parametric counterparts include median values and quar3les. These tests don’t assume normally distributed data or popula3on parameters and are based on sor3ng the data into ranks from lowest to highest values. Which test should I use? (pp. 165 – 168) Kohavi and Thomke (2017), The Surprising Power of Online Experiments(hfps://hbr.org/2017/09/the-surprising-power-of-online-experimentsLinks to an external site.) IntroducBon: It’s cri3cal to adopt an “experiment with everything” approach. In this ar3cle they describe how to properly design and execute A/B and other controlled tests, ensure their integrity, interpret results, and avoid piwalls. They argue that if a company sets up the right infrastructure and sonware, it will be able to evaluate ideas not only for improving websites but also for new business models, products, strategies, and marke3ng campaigns—all rela3vely inexpensively. Appreciate the Value of A/B Tests: (also independent-samples t-test). “A,” the control, is usually the current system and considered the “champion,” and “B,” the treatment, is a modiﬁca3on that a^empts to improve something—the “challenger.” Users are randomly assigned to the experiences, and key metrics are computed and compared. (Univariable A/B/C tests and A/B/C/D tests and mul3variable tests, in contrast, assess more than one treatment or modiﬁca3ons of diﬀerent variables at the same 3me.) Tiny changes can have a big impact: Though the business world gloriﬁes big, disrup3ve ideas, in reality most progress is achieved by implemen3ng hundreds or thousands of minor improvements. Experiments can guide investment decisions. Build a Large-Scale Capability It’s key to experiment with everything to make sure that changes neither are degrading nor have unexpected eﬀects. At Bing about 80% of proposed changes are ﬁrst run as controlled experiments. If you want to scale things up, you must 3ghtly integrate the capability into your processes. That will drive down the cost of each experiment and increase its reliability. On the other hand, a lack of infrastructure will keep the marginal costs of tes3ng high and could make senior managers reluctant to call for more experimenta3on. A company’s experimentaBon personnel can be organized in three ways: Centralized model: A team of data scien3sts serve the en3re company. The advantage is that they can focus on long-term projects, such as building be^er experimenta3on tools and developing more- advanced sta3s3cal algorithms. (Drawbacks: conﬂicts over alloca3on over resources, feeling like outsides, lack of clout to persuade senior management). Decentralized model: Distribu3ng data scien3sts throughout the diﬀerent business units. The beneﬁt of this model is that the data scien3sts can become experts in each business domain. (Drawbacks: individual units may not have the cri3cal mass to jus3fy building the required tools.) Center-of-excellence model: Having some data scien3sts in a centralized func3on and others within the diﬀerent business units. (Microson uses this approach.) A center of excellence focuses mostly on the design, execu3on, and analysis of controlled experiments. It signiﬁcantly lowers the 3me and resources those tasks require by building a companywide experimenta3on plaworm and related tools. It can also spread best tes3ng prac3ces throughout the organiza3on by hos3ng classes, labs, and conferences. (Drawbacks: lack of clarify, responsibility for investments is uncertain). Adress the DeﬁniBon of Success: Every business group must deﬁne a suitable (usually composite) evalua3on metric for experiments that aligns with its strategic goals. Which short-term metrics do predict long-term improvements to query share and revenue? It’s also important to break down the components of an OEC and track them, since they typically provide insights into why an idea was successful. For example, if number of clicks is integral to the OEC, it’s cri3cal to measure which parts of a page were clicked on. Looking at diﬀerent metrics is crucial because it helps teams discover whether an experiment has an unan3cipated impact on another area. Beware of Low-Quality Data: You need to allocate 3me and resources to valida3ng the experimenta3on system and selng up automated checks and safeguards. We’ve learned that the best data scienBsts are skepBcs and follow Twyman’s law: Any ﬁgure that looks interes3ng or diﬀerent is usually wrong. If you want results to be trustworthy, you must ensure that high-quality data is used. Avoid AssumpBons About Causality: Execu3ves mistakenly believe causality is not important and establishing correla3on is all they need. Click-through rate (CTR): (Number of clicks / number of impressions) *100 Bruner (2021), Marke3ng scales handbook: a mul3-item measure for consumer insight research. Volume 11Links to an external site.o Note: Needed for the in-class exercis

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