"How Companies Learn Your Secrets" - Behavioral Research

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This semester I am enrolled in Marketing 3001 where we've also discussed research and its impact on marketing activities. This week we read an article from the New York Times titled, "How Companies Learn Your Secrets" that was very interesting.

The article begins by sharing a story from a statistician at Target who was approached by marketers asking if they could figure out when a customer was pregnant. According to the article "new parents are a retailer's holy grail". The idea is that pregnancy and welcoming a new baby into the family is a very chaotic time in a couple's life and they tend to make quick decisions on buying things for their new family member- and they buy A LOT of stuff. Because this is such an up-in-the-air time for families, it's an easy time to target them to make them change their habits; for example, to go from buying only your cleaning supplies at Target to realizing "Oh hey, I could also pick up some produce while I'm already here...and I have a coupon for baby wipes so I might as well get those...and here are those diapers I've been looking for..." etc, etc.

A chairman from the Predictive Analytics World Conference says that Target has always been talented in the area of "predictive analytics" and using behavioral research to their advantage. I think that this is one of my favorite parts of the marketing and promotions world- applying behavioral research to consumers. It's so endlessly interesting and perhaps a little unethical but intriguing.

Target was inspired to look into changing people's habits by a number of studies that have been done recently regarding habit formation. Some of the strongest research on this shows that habits are based on cues, actions and rewards. Target set out to create habits by setting up their own cues and rewards. In the case of getting pregnant women to buy everything at Target, their cue would be a page of coupons for baby bottles, lotion, a grocery item, (Target found people are more okay with this type of marketing and will use the coupons if it doesn't seem quite so purposeful, so for example not sending customers "Congrats on your baby" flyers), the action would be to use it and then the reward is saving the money. The more opportunities people have for going into Target the more likely they are to buy lots of things from Target.

The research in general is pretty cool because I'd be interested in trying out the cue/action/reward technique for studying/exercising, things like that.

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This page contains a single entry by knowl124 published on November 29, 2012 10:17 AM.

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