The Business Of Behaviour

Dr Juliet Bourke  00:01

Have you ever felt like you're somehow bad at grocery shopping? Maybe it's Thursday night and you've run out of something. So on your way home from work, you quickly duck into the supermarket for that one thing. Fifteen minutes later, you're leaving with a basket full of things and thinking, 'How did that happen?' It's not a coincidence. It's the science of consumer behaviour. There are tactics supermarkets use which research has proven have the ability to psychologically sway our purchasing decisions, from the placement of certain products to the temperature in the store, and even the music they play. 

Nitika Garg  00:41

Do you know music plays a huge role emotionally? So, during their off peak times, when they want you to spend more time, they'll play slow music, soft music to get you sort of mellow down. Consumers take longer to go through the store and, in the end, make purchases that they didn't intend to, including unhealthy products such as chocolate. 

Dr Juliet Bourke  01:01

It's an untapped superpower for many businesses, knowing how evoking emotional states might influence purchasing outcomes. Professor Nitika Garg, a consumer behaviour researcher at UNSW Business School, says it needs to be implemented thoughtfully and ethically.  This is The Business Of, a podcast from the UNSW Business School. I'm Dr Juliet Bourke, a Professor of Practice in the School of Management and Governance. Nitika, a lot of your research is based on emotions. What do we know about emotions and their impact on how we make purchases?

Nitika Garg  01:47

 In my research, I particularly focus on three different sort of streams at this point. One is where I look at how specific emotions – so you know, anger, sadness, pride, awe – how they influence consumer decisions and judgments. And this is interesting because when I started we were only considering just broadly positive emotions versus negative emotions. So I was more curious about, 'Okay, what happens? Are they all the same?' So is anger the same as sadness? And there was some research emerging at that point saying, 'No, that's not true in psychology'. So I got interested in that to see how consumers react differently. And that led me into another angle of research which is how or what factors influence consumption decisions, especially in the food context. We realise that there are factors externally which can influence consumers to make unhealthy or healthy choices, and so I wanted to explore those factors in how we can help people to be more healthy or nudge them in that direction. And more recently, in the last decade or so, I have started looking at how can we influence consumers to be more pro-social, to be more ethical and to be more sustainable in their consumption choices and behaviour. Because consumer unethical behaviour, for example, costs marketers and businesses millions of dollars annually. So what are the factors that cause them to do that? And are there ways for businesses to, let's say, mitigate that.

Dr Juliet Bourke  03:22

So how do those emotions differentially affect consumers?

Nitika Garg  03:28

What we find is that when people are sad, they process information differently. They take more time processing information because sadness is an uncertain emotion. We won't get into the technical side of it, but it makes people want to deliberate, it makes people want to process information more deeply. Whereas anger is more of a superficial processing, you know, you just jump in. So in this context, what was interesting is that even though they're both negative emotions, anger led to more status quo choice. 'Okay, I just want to get out of this situation. I'll make the choice, stick with the status quo, and that's it'. Where is sadness sort of deliberated and arrived at a better decision making process in the end. 

Dr Juliet Bourke  04:11

And what about on the, sort of, positive side of emotions? You spoke about awe for example. 

Nitika Garg  04:16

Yes. 

Dr Juliet Bourke  04:16

Tell us about the positive emotions and the difference that that makes to consumer choices. 

Nitika Garg  04:21

So awe is a very interesting emotion. Awe influences sustainable consumption. So, you know, one of the things that we struggle, or businesses struggle, with sustainable consumption is that 'attitude behaviour gap', right? So, essentially people say they want to be sustainable. If I ask you today, 'How willing are you to make choices which will help the environment?' And you'll be like, 'Yes, of course' right? But when we see that or match that to sales patterns, we find that they are close to 15-16% at most, across different markets. So this is not a uniquely American or Australian or European phenomenon, this 'attitude behaviour gap' is present everywhere. So one of the reasons why this exists is because of the price premium that sustainable products currently command. So it's a burden on consumers, because if I can get a product for, let's say, $5 and you are saying I have to now pay $8 for the most sustainable product, that's a cost that not every consumer is willing to pay. So in this project, for example, we're looking at how awe actually helps people make that sacrifice. Awe actually motivates through a very complex mechanism to, sort of, alleviate people's concern about price and actually go for sustainable products, even if they are expensive.

Dr Juliet Bourke  05:42

So awe is kind of lifting you up to match your behaviour with your aspiration of who you are?

Nitika Garg  05:49

Exactly. So that's our argument, that because it helps us see the big picture it sort of pulls us out of ourselves, while at the same time, paradoxically, making us very aware of our internal standards, right? So like you said, it helps you sort of try to match those standards in that process which leads to increased sustainable choice.

Dr Juliet Bourke  06:11

It's big business to influence customers. I mean, that's at the heart of being a business owner, trying to influence customers. But sometimes, as you said, that can be unethical as well. So how do leaders influence but not influence too far? How do you find that line? Make that choice?

Nitika Garg  06:28

Like you said, there is a fine line between what is acceptable and what goes beyond the pale. And even going back to our supermarket example, I have talked about how some of the tactics are not completely above board, right? Because they know what they're doing, and it's not always in the interest of the consumer. So I think one is the motivation, right? A motivation for a business is obviously to be profitable, but I do believe that there are win-win strategies out there where you can influence consumers trying to lift both the business and the consumer, and our society in conjunction, because all of our choices collectively then influence our societies and communities. But where the drawback is if you start using psychological tactics or these theories or findings to manipulate consumers to maybe buy more or eat more, or do basically things that might not be in their long term interest.

Dr Juliet Bourke  07:26

But isn't that business? Getting you to buy more, getting you to eat more. 

Nitika Garg  07:30

I think that's the old philosophy, right? That's the philosophy we have grown up with, and that a lot of consumers still believe in, which is why the cynicism towards businesses and towards marketing and advertising, right? Because you are always like, 'Of course, they're trying to sell their stuff.' But I think that need not be the path that we stay on because modern consumer is cynical, modern consumer has a lot of information, and I truly believe that there is an opportunity to get consumers on your side. Because nobody is going to say, 'Oh, a business shouldn't be profitable', right? Consumers are not stupid. But what they might appreciate is the honesty and transparency in their business practices, and we have examples of businesses who've done that. So it's not a radically new idea, it's just not the norm. Even if you think of Southwest Airlines, for example. So they are very upfront and very clear in terms of, 'Okay, this is what is included in the standard ticket'. For example, you know, you get two baggages, whatever, these are the change fees, etc. And back in 2020 when actually they had a crisis where a lot of their flights were cancelled and consumers were stranded and were visibly obviously upset. So the CEO actually went on air and sort of apologised, explained why the crisis had happened, and the steps they had taken to sort of alleviate the issue and make sure that it doesn't happen again. So, I mean, that's an example of how you can be upfront with the consumers. You can be open with the consumers, and the consumers rewarded the firm by coming back to them and not being upset with them long-term.

Dr Juliet Bourke  09:14

When I think of a modern and transparent business, Patagonia, the clothing label, comes to mind. It's sort of the gold standard in ethical, sustainable business. Are there other businesses like that that aren't just greenwashing?

Nitika Garg  09:28

Can't think of one in environmental area, per se, but one that consumers do associate with being true to their values is Ben & Jerry's. So you know, Ben & Jerry's is another company that has always said that we are inclusive, we are diverse, and we stand for the rights of diverse communities, you know, like LGBTQI+. And they did this back when this was not fashionable, and they've always supported those communities in their employment strategies, in their promotion strategies and things like that, or the charities that they support. So I think, again, that's an example of a firm where their behaviour is driven through their values, and that is reflected in their practices. So consumers understand those, and then if they find a match then they reward those.

Dr Juliet Bourke  10:15

And do you think that the way then those businesses are marketing themselves also comes to genuineness and authenticity? Or do they also, in the background, use these sort of sneaky strategies to influence people to buy one more t-shirt and one more ice cream? 

Nitika Garg  10:34

Well, really good question, and that ties to a paper that I recently published about this brand activism and authenticism, right? So we said some brands do try and do just what you said, right? Which is, do those with the intention to, again, sort of more of a superficial commitment to get consumers on board, on the bandwagon or whatever issue might be prominent at that point, and get their business. But I think consumers are discerning enough. They do differentiate between what we call 'authentic activism' in that instant – because, you know, like supporting LGBTQI plus communities can be a controversial issue in some countries, like the US right? And we have examples of how of backlash, etc. But they can distinguish when there is an authentic commitment versus what we call 'slacktivism' or inauthentic behaviour.

Dr Juliet Bourke  11:27

Slacktivism? 

Nitika Garg  11:28

Yeah. 

Dr Juliet Bourke  11:28

New word. New word.

Nitika Garg  11:30

Because if you're truly committed, it comes through in your practices. It comes through in how you treat your employees or what your even employment strategies might be. It comes through in many ways, and I think people can tell that there is that difference.

Dr Juliet Bourke  11:47

So what happens then when a brand doesn't get it right? 

Nitika Garg  11:51

So, for example, if you are just jumping on the bandwagon of, let's say, a controversial sociopolitical issue – for example, supporting LGBTQI community – and you're found to not be serious, what we found, at least in our research, was both conservative and liberal consumers were cross with them. So they get slammed from both sides, because Republicans or Conservative consumers hate you for doing it at all, and the Liberal consumers now hate you because you didn't do it well enough. So I think the message there was if you really want to do it, do it properly or don't do it at all.

Dr Juliet Bourke  12:28

Coke is an interesting brand. I saw a really great advertisement from Coke, it was about Ramadan. And another one that was about diversity, where all these people were sitting in the dark, and they all looked very different but you couldn't see them, and they were sharing a Coke together, forming a bond. And then the lights went up and people were saying, 'Oh, I didn't know that you were using a wheelchair. I didn't know you had tattoos all over you. I didn't know...' all of those things. That's interesting, because at the end of the day, it's a product full of sugar and caffeine. How do I reconcile that? That I love those advertisements, but I don't love their product.

Nitika Garg  13:02

This is a tricky one. Sometimes you can go really, really wrong and they did once with an ad like this. But people understand the sentiment, but what that does is, broadly speaking, you have a positive sort of attitude towards the brand. It can shape that. And then, 'Okay, I'm not going to have regular Coke. I might have Coke Zero', or I might not buy Coca-Cola products with the fizzy side, but I might get their water bottle or I might get their energy drinks. Because they're also diversifying away from the sugar drinks, because as consumers we are becoming more aware of the negative side of these products. So I think that positive brand equity stemming from those positive emotions that you're connecting to your brand will pay off in the future as well. People will come back to you.

Dr Juliet Bourke  13:46

I think it's interesting, because I've now mentioned their name a number of times, and you've mentioned it as well. I don't drink Coke at all, but they've got me to repeat their brand to this audience.  Absolutely. Yes. Isn't that great marketing?

Nitika Garg  13:58

Absolutely. And we talk about this, right? So when I mentioned the brand equity, so there's the brand image side of it, but brand image feeds into the equity. And I tell my students that brand image is not just the packaging of the brand. It's all of those concepts, emotions that attach to the brand. So when you think of Coke, for example, you're seeing red in your head. You're seeing the can, maybe you're seeing polar bear and Santa Claus and everything else, and all of those associations feed into this holistic idea of what Coke is in your head.

Dr Juliet Bourke  14:29

You said that Coke did a mistake at one stage? 

Nitika Garg  14:32

Yeah so they had this ad in US a few years ago, and they got a lot of backlash. So it was around Christmas time, and I think it was a group of white teenagers, or maybe a mixed race group, goes to some poor country or neighborhood. I don't remember the details, I think it was some South American country, and they set up a Christmas tree, so sort of Christmas Spirit giving and all that. But I think the backlash was, well, you're sort of whitewashing it or you're sort of saying, 'Oh, this is a poor community or a poor country'. I don't remember the details, but yes. So that ad of diversity, for example, it is so easy to be accused of being inauthentic about it, right? Or being very superficial. So to get those right notes that probably comes from your purpose, which then has to be communicated to your media company and very authentically and consciously implemented in your marketing strategy.

Dr Juliet Bourke  15:28

Is there a business that you could have which says, 'Actually, we don't care about our consumers, but we do have a good product.'

Nitika Garg  15:34

Less and less so. Although, I mean, if we go into the politics right, it's all about segmentation, and it's all about picking your right segment. So we know, as you know, if you go to the American politics, nobody would have thought that Trump could be the president the first time around, let alone the second time around. But I talk about this example in my classes as well, that what his campaign and he illustrates is, if you've got the right segment you can offend everyone. So yes, there could potentially be a brand which is obnoxious, but if they have a grip or an understanding of their segment then they are fine.

Dr Juliet Bourke  16:15

I think Lululemon was like that, weren't they? That they said this brand is not actually for people over some top size, we're only for the people who are size six or size eight, something like that.

Nitika Garg  16:26

Yeah, but I think right now they've copped a lot of backlash for that one because I think consumers are more aware and they want to be more inclusive. So yes, I might be size six or eight, but I might feel bad about wearing a brand that is so obviously out of sync with the modern sentiment.

Dr Juliet Bourke  16:44

Actually, that's a really good point. This idea that organisations are not just selling to the immediate consumer, but that consumer has their own values, has their own friends, their own family, so you're actually selling to a broader group of people. And therefore, if you get it right you're actually building a community. You're activating a larger group of people. Have you done research around that as well?

Nitika Garg  17:06

I haven't, but there is research on brand communities, but it doesn't quite look at this angle, which is an interesting one that, you know, okay, I'm a size six so I could fit in their segment, but I have a friend or a family member who's a size 12, maybe, and then I get offended on their behalf, thinking how can you be that kind of a brand in today's day and age? So I am not going to buy your brand because of that. And vice versa, right? Like Dove, an example of a very inclusive, very body positive image brand. And they have really done well for themselves and it's not just in those plus size segments. They've done well overall because of that commitment.

Dr Juliet Bourke  17:47

So can you talk about the types of transgressions that organisations might do and the consequence on consumer behaviour? 

Nitika Garg  17:54

There can be two main kinds. One is performance based, where there's something wrong with your product andm, you know, you have an issue and consumers have negative experience with the brand, and what happens then. The other is value based transgressions, which is where the brand is implicated in a moral or ethical incident where, let's say, the fast fashion companies, for example, were found to use child labour in developing countries in their factories. Even though they might not have directly recruited them, they got the backlash because it was, after all, their production facility. So that's a value base which is not implicating the quality of the product, but it is the value system, or it's sort of reflecting negatively on the values of the brand.

Dr Juliet Bourke  18:42

And is there a different consequence then, if one is just a product failure and one is a values failure?

Nitika Garg  18:49

Yeah. So this is a working paper I have, and we do find, yes there is a huge difference in how consumers react to performance based failures and a value based failure. So while for a performance based failure, you might be willing to give them a chance more easily depending on what the reputation of the brand is. So, for example, Nike had this issue with, I think, their Nike Airs at one point. The soles were falling off or something, and then the consumers were getting hurt, but we know that they didn't have any long term consequences. But on the other hand, like these fast fashion example, that took a lot longer for the brands to recover from.

Dr Juliet Bourke  19:30

So just going back to the emotions, your research around emotions, and now that listeners know awe is a good one to inspire, what would you advise organisations in terms of creating the right emotions to reflect well on their brand, not look like manipulation, and also get consumers to buy?

Nitika Garg  19:50

Apart from emotions you need to communicate. Because no matter what emotions you use, those would be sort of behind the scenes. Those would be part of your advertising strategy, part of your brand's, you know, add jingle or the background. So you are using those systematically to create a certain emotion and therefore a certain response and consumers. But I think trying to tell consumers, 'This is who we are', or 'This is why we are using awe', for example, right? Like, if I'm using awe in my product advertisement then there has to be maybe some background reason why that emotion is well suited to my product. And if we can strike that balance, I believe that'll be the real sort of jackpot. But that's hard to do. 

Dr Juliet Bourke  20:34

Have you found yourself leaning into a brand, getting sucked into the emotion, and then you've stood back and you've gone, 'What was that about?'

Nitika Garg  20:43

I understand the emotions better now, but I remember an ad from Cadburys back when I was growing up in India. And this was an ad, you know India is a cricket mad nation, and this was using the context of cricket. There's this girlfriend sitting in the stands eating a bar of chocolate and her boyfriend's on the crease, he has to hit a six to win the game. And he hits it, and she's like ecstatic and she's holding the bar and dancing on the field, and then the whole crowd is on their field. I still remember the emotion was... you got carried away with that ad because the jingle was perfect, the music was perfect, the young people and, you know, sort of... So, yeah, there's some really good advertisements that you recognise what they're trying to do, but they still become part of that positive memory in your head.

Dr Juliet Bourke  21:32

I think that's so good for us to all hear. Even the professor who's done the research on it can still get sucked in.

Nitika Garg  21:38

Yes, absolutely,

Dr Juliet Bourke  21:42

The Business Of podcast is brought to you by the University of New South Wales Business School, produced with Deadset Studios. If you want to learn more about marketing – its potential ethical pitfalls and how to avoid them – you'll like our episode with Dee Madigan, a marketing expert and a regular commentator on shows like The Gruen Transfer.

Dee Madigan  22:02

All purchasing decisions are made emotionally, even if we think they're not, and choosing to use a bank is a purchasing decision. So if you can bring the emotion in there, people might stop thinking about the fact that Commonwealth Bank charge dead people for insurance.

Dr Juliet Bourke  22:16

That episode is linked in the show notes.