by: J. Walker Smith, Executive Chairman, The Futures Company
Nothing matters more than context. What consumers see, hear and think about a brand is wholly shaped by the context in which they encounter it, which in turn directly affects what they do and buy. Brand marketers know this, of course, which is why so much time and money are invested in carefully constructing retail environments. But there is more to context than facings and shelf placement.
Much of the context that matters is out of the immediate control of marketers, like the weather. A recent working paper by four economists from Northwestern University, the University of Chicago, Brigham Young University and the University of California at Riverside analyzed national data for 40 million car purchases and four million home purchases. They modeled price paid as a function of seasonal temperature variations, while controlling for other factors. It turns out that, holding other things constant, the premium paid for a house with a swimming pool or a convertible car was much greater when the purchase was made during months with warmer average temperatures. Bottom line, if a buyer sees a house with a pool or a ragtop car in the context of a sunny summer day, he or she is likely to pay a higher price.
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