Focus on Research

August 10, 2012 2:50 pm

Something for the weekend

Decisions, decisions, decisions.......the way people make choices has huge implications for both business and society, according to the latest business school research.

In the retail sector, researchers at the University of Miami, Texas A&M University and the University of Minnesota say that shoppers are more likely to buy a product if they are offered more - a three-for-the-price-of-two offer, for example - rather that a discounted price - 20 or 30 per cent off. This is true even if the cut-price offer is a better deal, they say.

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Focus on Research

The researchers - Haipeng Chen, associate professor at Texas A&M, Howard Marmorstein, associate professor of marketing at the University of Miami, Michael Tsiros professor of marketing also at Miami and Akshay Rao, marketing professor at the University of Minnesota - combined lab studies and field surveys in a retail store and a mall, in which they offered shoppers a series of promotions in the form of bonus packs versus price discounts. The study found, for example, that 73 per cent of shoppers bought more hand lotion when it was labelled “50 per cent more” than when it was labelled “35 per cent off,” even though the discounted price is the better deal.

The authors blame poor maths skills for the decisions. “When faced with a scenario of converting percentages, most of us are helpless and simply guess when it comes to figuring out the better deal,” says Prof Tsiros. “It is clear from the study that shoppers often, and incorrectly, assume more product is better.”

Their advice to retailers: promote bonus buys rather than discounted packs.

On a more macabre note, four academics from Harvard Business School, Harvard University sociology department, Wagner College in New York and the University of Hawaii’s department of anatomy, have investigated the market for whole body donation for scientific and medical research, and in particular the incidence of married couples or partners deciding to register together to donate.

The research focused on all those who registered on the whole body programme at the University of Hawaii between 1967 and 2006. Perhaps the most significant finding was that occupation influenced co-donation.

When the men and women came from occupations where women represented more than 55 per cent of the workforce - so-called “female-gendered occupations” such as nursing or pre-school teaching - they were more likely to donate together than alone. This information could help medical researchers target prospective donors more effectively, say the researchers.

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