consumer-behavior 6

The best time to buy everything: when to buy air tickets, get great deals on electronics, and so on.

People act on the spur of the moment, most of the time. So, as you can see from this example below, psychology can be more important than economics. Senthil Mullainathan worked with a bank in South Africa that wanted to make more loans. A neoclassical economist would have offered simple counsel: lower the interest rate, and people will borrow more. Instead, the bank chose to investigate some contextual factors in the process of making its offer. It mailed letters to 70,000 previous borrowers saying, “Congratulations! You’re eligible for a special interest rate on a new loan.” But the interest rate was randomized on the letters: some got a low rate, others a high one. “It was done like a randomized clinical trial of a drug,” Mullainathan explains. ...

Packaging can make a huge difference to products. It really hit me when I saw this bottle of Heinz’s ketchup. My two big problems with normal ketchup bottles are: (a) the sauce spills to the side of the bottle and sticks to the cap, and (b) it’s tough to pour the last bits of sauce – you have to hit the bottle a lot. Now, I didn’t know I had these problems. But when I saw this bottle, it hit me. You keep the bottle upside down – so it’s easy to pour the last bits of sauce. And they way the nozzle valve is designed, the sauce doesn’t stick to the cap. Perfect! Since then, I don’t buy any other ketchup bottle. Even if I WANT ketchup, I don’t buy it unless I get this bottle. Packaging made be brand loyal. (Caveat: I’m not REALLY brand loyal. I’d buy any ketchup with this packaging. But only Heinz has it right now.) ...

What Teens Want. From a session at Web2.0. The big laugh line of the session was when Safa asked them how they’d go about researching information on a CD player they might want to buy. They looked at him in silent puzzlement, as if to say, “why would we buy a CD player?”

The Economist: Americans get better service because they complain more. (subscription required)

Interesting statistics on pizza purchases and tips.