The influence of music on consumer behaviour. A research overview Summary

Transcription

1 The influence of music on consumer behaviour. A research overview Summary Derived from Musikens effekter på konsumenternas beteende: En forskningsöversikt by Sven-Olov Daunfeldt

2 Contents Summary 3 Jazz & Java 6 Madonna or Mozart Fast or slow Symbiosis A way of life Key facts

3 Summary. Researchers have long known that music can influence consumers' experience and behavior in commercial marketplaces. The purpose of this summary is to provide an overview of previous research and to summarize the results. How can a commercial marketplace use music to influence customers to strengthen their brand and increases sales? A review of previous studies reveals several useful discoveries but also many pitfalls. In summary: The results indicate that customers prefer background music to silence or no music. But the right music choice can be more important than the decision to play music. Music's effects on the behavior of consumers depend primarily on in the context. One important lesson is that music should match the commercial marketplace to have a positive impact on consumers' experiences and behaviors. The tempo of the music can affect consumers' time perception and how fast they move in the marketplace. Music with slower tempo leads to customers moving more slowly, while faster tempo makes them move faster. Many previous studies demonstrate that a slower tempo makes customers spend more time in the shop and buy more. But the result also depends on the market. In some cases, it may be better to play up-tempo music. Music interacts with other marketplace factors and sensory perceptions. This interaction means that the many different factors play a significant role.

4 Watch out! The music controls you. Dagens Nyheter.

5 Companies and brands can influence some factors (such as fragrances and lighting) while other elements are harder to control (such as marketplace congestion). Companies often overlook these factors. Music might influence consumers' behavior through an emotional response that makes them either approach or avoid the marketplace. A significant factor is music s social role. Research shows that individuals believe their musical preferences reveal something about their personalities. They use music to convey information about themselves to others, but also to judge others. Research also indicates that musical styles convey this type of information. The importance of musical style means that companies can approach their desired target group by the choice of music, and by making this an integral part of their branding. Many studies indicate that this is an area that offers great business potential. Relatively many previous studies have used field experiments to study consumers' perception of and behavior in different marketplaces. One problem is that many studies designed the experiment in a questionable manner, which means that that the conclusions of previous studies may depend on information that is unreliable. This report concludes that randomized field experiments are reliable. By using this approach, it is possible to draw a conclusion about how different music solutions affect the outcome variables, such as sales. Music solutions in commercial marketplaces can be a significant innovation for a company, but also have great social value. Innovation policy today mainly focuses on companies that spend a lot of money on R&D. But these companies don t necessarily contribute to new jobs in the economy nor do they create jobs for employees who have trouble entering the labor market.

6 Chapter 01 Jazz & Java the importance of music for Starbucks.

7 The concept of Starbucks. Gerald Baldwin, Gordon Bowker, and Zev Siegl founded Starbucks in 1971 in Seattle. The business idea was to roast and sell coffee high-quality coffee beans directly to consumers. The company had loyal customers from the beginning and was immediately profitable. The person who would come to transform Starbucks into a multinational corporation was Howard Schultz, who remains Starbucks' CEO Starbucks to this day. Today Starbucks is a multinational company present in 65 countries with around employees. The total revenue during the fiscal year 2013 amounted to $15 billion. One driver behind Starbucks expansion has been the insight that music in the marketplace plays an integral part of the consumers experience. During a business trip to Milano in spring 1983, Howard had an epiphany that would change everything for Starbucks. As he walked from his hotel, he noticed that every street swarmed with small espresso bars. He entered these espresso bars and marveled at how many people circulated. The espresso bars formed a natural meeting place for the Italians. Howard realized that Starbucks shouldn t only sell coffee. Starbucks should also serve different coffee drinks and educate their customers and show them the best way to enjoy coffee.

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9 The soundtrack that transformed Starbucks. One of the factors that Starbuck changed to influence their customers senses was music. At first, Starbucks only played classical instrumental music. The same playlist repeated every five hours, each day, for a month. One of the store managers, Timothy Jones, who previously worked in the music industry, realized that Starbucks could improve sales and the customer experience by playing other kinds of music. He started to study how his customers reacted to jazz by artists such as Billie Holiday and Ella Fitzgerald. He hadn t asked for permission and said he expected Howard to "bounce through the door one day and go, what are you doing?" (Starbucks, 2014). As a result of his experiment, customers began approaching the staff and asking about the music, and if they could buy a CD with the music. Starbucks management realized there was commercial potential in the music played at Starbucks, which they hadn't realized (Schultz, 2011). Could one get customers to stay longer and buy more by playing music the customers appreciated? Could the music become an integral part of the brand that said something about what Starbucks stood for? Could the music lead customers to identify themselves with the brand?

10 A winning partnership. Starbucks formed a partnership with classical record label Blue Note Records and began composing and selling CDs. Over copies of the first CD Blue Note Blend sold in a couple of weeks. This number is even more impressive when you realize that Starbucks only had 500 outlets at this time (Starbucks, 2014). The initiative to publish music has evolved through the years. Among other things, Starbucks bought the company Hear Music to release Starbucks albums. Starbucks later sold the company due to declining profitability, technological developments, and increased focus on Starbucks' core business. But during the time that Starbuck s owned Hear Music, the label released several best-selling and Grammy Award-winning albums. Starbucks has also consciously focused on playing jazz, blues, and American folk music by relatively unknown artists. The New York Times has called Starbucks influence on customers through music one of the quiet shapers of American culture.

11 Jazz and java, it seemed, were a natural fit. Howards Schultz, CEO Starbucks.

12 Chapter 02 Madonna or Mozart the importance of the choice of music in commercial marketplaces.

13 The question. One problem with measuring sensory impressions is that the senses are interrelated and can influence each other during the measurement. Music itself does not have a direct impact on, for example, sales. Rather, music interacts with the other stimuli. The answer. Yes, science supports the idea that consumers prefer background music when they make a purchase, to making a purchase without background music. This positive effect of background music seems to be particularly evident if consumers recognize and like the music being played on the marketplace (Garlin & Owen, 2006; Grewal et al., 2003). Andersson and his fellow researchers (2012) conducted a field experiment in Sweden in an electronics store, during four days in the middle of December. Music: Matched Christmas holiday music In total 150 questionnaires from customers leaving the store where gathered. The effects of the presence of music on time in the store and sales showed statistically significant results. Customers spent eight minutes more time in the store and paid an additional 910 Swedish kronor (an approximate 78% increase in sales), when there was background music, compared with when background music was absent. The presence of music has a positive effect on consumers shopping experience. This results in that they stay longer in the store and buy more.

14 MUSIC NO MUSIC DIFFERENCE TIME (IN MINUTES) 23 MIN 15 MIN +8 MIN SALES (IN SEK) SEK SEK +910 SEK Music s effect on sales and on time spent in store.

15 Genre vs. genre. Yalch and Spangenberg (1990) conducted a field experiment in a department store in northwestern part of the United States to study how the choice of background music influenced consumers' perception of time. Music: Popular music (a top 40 list) vs. instrumental After handing out questionnaire to customers leaving the store results showed that there were significant differences in how the music made different customer groups perceive time. Customers who were younger than 25 thought that they spent more time in the store during calm instrumental music, while the older consumers instead believed they spent more time in the store when pop music played. One interpretation is that the perception of time is related to whether the consumer recognizes music. When music is unfamiliar music, time is experienced as passing at a slower pace. More familiar music can lead to that consumers perceive that they spend less time in the marketplace. Yalch and Spangenberg (2000) conducted a new study but this time in an artificial retail environment where customers consisted of University students in marketing. The customers where given a questionnaire when leaving the store answering regarding their perceptions of shopping duration, their emotional states, and their merchandise evaluations. The customers perceived time did not correspond with the customers actual time spent in the store.

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17 There is a significant difference in average willingness to pay between different music styles. The effects of the type of music are often highly context-dependent (Radocy & Boyle, 1997). Wilson (2003) studied guests' experiences at a restaurant in Sydney during twelve days, when four musical styles were playing. Music: Jazz, pop, lighthearted background music, classical music, and no music. The only difference that was statistically significant was when no music was played versus the other music styles. Guests were willing to spend more when music was played than when no music was played. Results show that the average consumer was willing to spend an additional 4.70 dollars when jazz was played, compared to when no music was played. The guests also perceived classical music as less fitting, left the restaurant earlier, and spent less on alcoholic beverages. An indication is that it is important that the music being played appeals to customers and that it is perceived as appropriate and suitable for the brand. The results are supported by North & Hargreaves (1996) who showed that customers at a university café liked the café more if they also liked the music Music and influence. North et al., (1999) studied if it is possible to use background music to influence what products customers choose in a store. The experiment was performed in a wine shop and the aim was to study whether they could influence customers' choice of wines by playing French and German music in the store. Music: French and German music.

18 NORMAL MUSIC NO MUSIC CLASSIC EASY LISTENING POP JAZZ Average willingness to pay while playing different types of music.

19 The results indicated that when French music was played, customers bought more French wines, while sales of German wines increased when German music was played. The customers however, seemed unaware of what music was being played. Less than 14% of the customers responded that music had affected their choice of wines. Areni and Kim (1993) conducted research in a wine store, which supports the hypothesis that it is possible to influence what products consumers choose by playing a certain type of music on the marketplace. Music: Pop music vs. classical music. Their results showed that consumers bought as many wine bottles regardless of the music selection, but that they bought expensive wines when classical music was played. The authors interpreted that people often associate classical music and wine with luxury, sophistication, and complexity. Customers associate (probably subconsciously) classical music with exclusivity. This association makes them buy more expensive wines. Create an expectation. To increase sales, many commercial marketplaces should associate the music being played to the products. Morrison & Beverland (2003) did a research experiment at the classic toy store FAO Schwarz in New York. They played the Star Wars soundtrack when consumers went into the elevator from the first to the third floor (where they sold the Star Wars products).

20 This music had an emotional impact on the consumers, creating an expectation before seeing the products, and probably increased their propensity to consume. Other departments played a different type of music that was related to the type of products sold there. This shows that FAO Schwarz was keen to make sure that the music fit the products sold at the specific departments. Left out. Abercrombie & Fitch is a fashion brand that caters to young people aged years. Music is an integral part of their brand strategy, clearly stated in their statement: "Music First! Merchandise second. Music: "Tend to turn away from mainstream material heard on the radio. We select music by artists who might be known to college student but have not broken out into the mainstream yet." To choose to play music consumers probably like, but do not always know, can create curiosity about the brand. It also creates a sense of belonging. Something else that characterizes Abercrombie & Fitch is that they play their music loud. The aim of the loud music is to make consumers who do not belong to the target group unwilling to enter their stores. Thornton (2007) studied an Abercrombie & Fitch store in downtown Portland (Oregon, USA) and witnessed how many customers chose to walk out of the store, or in general refused to go into it, because of the high volume. The volume measured 90 db on their sound meter and as much as 98 db as they approached the speakers.

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22 A sense of belonging. But the same thing that keeps some customers away appeals to other customers. Abercrombie and Fitch use a high volume to create a club feeling and to attract their target audience. One article in The New York Times (New York Times, 2012) describes how a girl in her early teens goes shopping at an Abercrombie & Fitch store with her mother and grandmother. The volume and the music selection affected the elderly to the point that they stated that ten minutes at the store seemed like an hour. The frustrated grandmother told the reporter: "I can not concentrate. I cannot focus on what I want to buy because of the noise. I want to say to her, 'Right Find Something, I'll buy anything, let's just get out!" The frustrated grandmother s statement is confirmed by scientific studies (Garlin & Owen, 2006) that show that customers in stores with loud music stay a shorter time.

23 Chapter 03 Fast or slow the tempo of the music steers you.

24 There is only one tempo, and that is the right one. Wilhelm Furtwängler.

25 The question. Can store owners affect their business by selecting the tempo of the music in their marketplace? Should store owners play music with a slow tempo, or choose music with a faster tempo? The answer. The tempo of the music can affect the time consumers spend in a store and increase sales. The tempo of the music has an effect on how long customers stay in a store and the store's sales. Milliman (1982) conducted a study in a grocery store. The study shows that fast music got customers to move quicker through the store than slow music did. Music: Instrumental music (1) No music (2) Music with slow tempo (<73 bpm) (3) Music with fast tempo (>93 bpm) Customers stayed an average of 19 seconds longer in the store during slow music, compared to how long they stayed during fast music. Customers spent more money when slow music played than when fast music played. These differences were statistically significant, indicating that the tempo can affect the time consumers spend inside a store and increase sales. The experiment can thus only be seen as an indication that the music slower pace seems to be preferable to the music fast paced in grocery stores.

26 SLOW TEMPO HIGH TEMPO NO MUSIC DIFF TIME IN STORE (SEC) 127,54 108,93 119,86 +18,6 SALES (IN USD) $ $ NA $ The effect of music tempo on sales in a grocery store in USA.

27 Milliman randomly asked customers outside the store if they remembered hearing music in the store while they were shopping. Roughly the same number of customers said the store wasn't playing music, even though it was. So, it seems that the customers were unaware of the background music in the store, although the results suggest that the tempo of the music affected their behavior. Eating with your ears. Milliman (1986) also conducted a study in a restaurant to investigate if the tempo of the music could affect how long it took before the guests were served the first course, how long they stayed at the table, how many who left the restaurant before being served, the total sales of food and drinks in the restaurant. Music: Instrumental music (1) No music (2) Music with slow tempo (< 73 bpm) (3) Music with fast tempo (> 93 bpm) Guests stayed 11 minutes longer at the table during slower music. This meant guests spent $8.85 more on drinks, representing a 41% sales increase. The results of the study indicated that slow music made visitors stay longer, drink more but it did not affect the proportion of guests that left the restaurant before they got served. This indicates that the tempo can have a positive impact on sales and the visitors' experience of waiting time.

28 SLOW TEMPO HIGH TEMPO DIFF TIME BEFORE FIRST COURSE 29 MINUTES 27 MINUTES +2 MINUTES TOTAL TIME AT THE TABLE 56 MINUTES 45 MINUTES +11 MINUTES LEAVING BEFORE FIRST SERVING 10,5 % 12 % -1,5 % SALE OF FOOD 55,81 $ 55,12 $ +0,75 $ SALES OF BEVERAGE 30,47 $ 21,62 $ +8,85 $ The effect of the music tempo in a restaurant.

29 Chapter 04 Symbiosis the music s covariance with other senses and factors.

30 Store atmospherics cannot really be understood on a sense-by-sense basis; environments, and our perception of them are, by nature, multisensory. Spence, 2014.

31 The problem. One problem with measuring sensory impressions is that the senses are interrelated and can influence each other during the measurement. Music itself does not have a direct impact on, for example, sales. Rather, music interacts with the other stimuli. The solution. The effects of music on a commercial marketplace depend on other sensory input in the marketplace affected by factors such as color, lighting, and scents. Make sure the music fits the brand identity and fits the other factors in the store. Different music tempos and different fragrances result in different fallouts and perceptions. Mattila and Wirtz (2001) argue that small changes in a store, such as background music or scents, can make consumers more satisfied, increase the amount of unplanned purchasing, and lead to higher sales. The results show how tempo and scent interacted and how satisfied customers were with a visit to a gift shop. Music: Instrumental music with slow, fast paced and no music Scents: Lavender scent, believed to have a calming effect, grapefruit scent, believed to have a revitalizing effect and no scent Results indicate that fragrance and music significantly increased customer satisfaction and purchasing, but only when the scents and tempo matched. Lavender, which has a soothing aroma, worked with slow background music, but not with faster music.

32 SCENT LAVENDER SCENT GRAPE SCENT NO SCENT MUSIC HIGH TEMPO 5,30 5,82 5,06 MUSIC LOW TEMPO 5,67 5,17 5,11 MUSIC NO MUSIC 5,63 4,95 4,62 Level of satisfied customers based on music and scent.

33 Grapefruit had a positive effect when combined with fast music, but not when combined with slower music. Music and the fragrance must match the brand. The results also show that the presence of music is more important for the consumer experience of the marketplace than the presence of fragrance. The music and the fragrance must match the brand. Morrison et al., (2011) conducted field experiments in an Australian fashion store to study the varying effects of music volume (high and low) combined with the presence of a vanilla fragrance in the store. Music: Modern dance music, on either the high or low volume. Scents: Vanilla scent, or no scent. The results of the experiment indicated that customers were more satisfied when high volume music accompanied the vanilla scent. This, in turn, increased both the time customers spent in the store and sales. The right mix of music and scents in the store will benefit the consumers' experience of the marketplace and sales. Less stress with music. Slow music makes customers more satisfied during times of high congestion. Eroglu et al., (2005) studied the varied effect of music during different degrees of congestion in a shopping mall. Music: Constant volume (1) Music with slow tempo (<60 bpm) (2) Music with fast tempo (>96 bpm)

34 The interaction between music tempo and congestion had a significant effect on how the consumer experience. When the mall was crowded, consumers reported greater satisfaction when the music was slow. When the mall was less crowded, they reported greater satisfaction when the music was faster. One interpretation of the results is that customers feel frustrated when the marketplace is very crowded. Fastpaced music can enhance this frustration. Another interesting conclusion is that slow music may worsen consumers' impressions of near-empty marketplaces, while faster music gives the marketplace a livelier impression. Key counts. To explore the interaction between the music's tempo and the music's mode, Knoferle et al., (2012) chose to conduct an experiment in a department store chain in three different locations in a Swiss city. Music: Different combinations of tempo and mode. Volume and type of music were constant (1) Music with slow tempo (<95 bpm) (2) Music with fast tempo (>135 bpm) (3) Mode (minor; major). Sales increased during slow music, as well as during music in a minor key. The positive effect was strongest when these two conditions were combined; slow music in a minor key. Slow music in a major key did not have a positive effect on sales.

35 One interpretation of the results is that slow music in a minor key has long been used to express grief and emotional moods, whereas fast music in a major key has been used to express feelings of joy and exhilaration. Western listeners usually perceive the other combinations, slow music in a major key and fast music in a minor key, as unusual. These generate different kinds of emotions. Those combinations seem as if they don't fit, which can confuse and create a discomfort for the consumer. That slow music in a minor key produces the greatest increase in sales, may also be due to the particular context. That combination matched the marketplace's premium segment character.

36 Chapter 05 A way of life music's emotional impact and social role.

37 Question 1 How can we explain that customers appear to be controlled by the music when they are in a commercial marketplace? In the economic literature various types of demand models are used to explain what affects consumers' choices of products or services in a marketplace (Deaton & Muellbauer, 1980; Piggott & Marsh, 2011). The models show that consumers' demands on commercial marketplaces are a function of price and of total possible expenses. The latter aspect usually relates to the consumers' income. Research has shown that small changes in the price of the studied product and the price of other goods, as well as income, has an impact on sales. Music causes emotions, and these are hard to measure. So, to explain how the presence of music can influence consumer behavior, a psychological explanation model is necessary. "Manage the emotional component of experiences with the same rigor they bring to the management of product and service functionality " - (Berry et al., 2002, p.82). One model often used to explain music's effect on consumer experiences and behaviors is Mehrabian & Russell's (1974) PAD (pleasure- arousal-dominance) emotional state model. The model builds on the fact that different types of environments send out signals that affect the individual's emotional state. This effect, in turn, makes consumers either avoid or approach the environment. In brief, the consumers' emotional responses to different sensations influence the purchase decision. The explanatory model includes three emotional states: pleasure, arousal and, dominance.

38 Music has many different functions in human life, nearly all of which are essentially social. Hargreaves & North.

39 The marketplace's environment can influence these emotional states. Pleasure is the degree to which consumers are well and happy. Arousal is the extent to which consumers feel stimulated, excited, alert, and active. Dominance captures the degree to which consumers feel influential and important Pleasure and arousal. In the Abercrombie & Fitch field experiment, the teenager's reaction to the music was that she wanted to explore the physical marketplace. Her mother and grandmother, however, wanted to avoid the environment physically because they "couldn't put up" with the high pop music in the store. When the company FAO Schwarz in New York played the Star Wars music it likely affected many consumers emotional reactions. This, in turn, meant that they stayed longer at the particular department, which probably led to higher sales. The music may result in consumers either approaching each other in the studied marketplace or avoiding each other. Dubé et al., (1995) analyzed (in video experiments) if the emotional reactions of various classical pieces of music affected the likelihood that customers would approach bank staff. This proved to be the case. The result support the hypothesis that music can influence how consumers choose to interact with others in the marketplace. Donovan and Rossiter (1982) and Mehrabian and Russell, (1974) studies show that music can also lead to emotional reactions that affect how satisfied consumers are with the visit of the commercial marketplace, which in turn affect the desire to visit the marketplace again. It seems that music affects consumer emotions, which in turn affects how they feel and behave in commercial marketplaces.

40 Question 2 Why music affects the individual emotions? It is well-known that music says something about individual personalities and that it can affect their social relations (Crozier, 1997). Already more than 50 years ago, Catell and Saunders (1954) wrote an article in which they claimed that individual taste in music says something about personality. Later Payne (1980) presented results, which indicate that introverted people prefer music with more formal structures, while more extrovert people prefer music that conveys more emotion. Similar results have also been presented by Daoussis & McKelvie (1986). They found that extroverted people had stronger preference for rock than individuals with introverted personalities, and this was especially evident when it came to hard rock. This could indicate that the type of music played on a commercial marketplace will appeal to different types of personalities. This also means that companies can influence consumers perceptions of the marketplace and the brand with the music played. A problem in this context it is difficult to determine whether individuals are listening to a particular type of music because of their personality, or if they do it to fit into a social context. Rentfrow & Gosling (2003, 2006) confirm the results that individuals' personalities are correlated with the music they listen to. But they also show that individuals use music to present a picture of themselves and to create other individuals' perceptions. They also show that music is a central and important part of people's lives and that it is consumed in a variety of contexts.

41 Question 3 What does music say about our personality? (1) People seek out different styles of music only based on how appealing those styles sound. (2) People look for music that is different regarding agitation or arousal. For example, calm and introverted people prefer quieter genres to help them stay calm. (3) Individuals can use music to convey an image of themselves. Intellectual people may listen to complex music to convey an image of refinement and sophistication. Music preferences provide unique information about personality. Rentfrow & Gosling, Commercial marketplaces use music in many different ways: (1) As a method to influence consumers. This is usually done in such a subtle way that customers later cannot remember the music. Slow background music that customers don't remember, can still influence their behavior. (2) As a deliberate way to communicate what the company stands for and to create a stronger relationship with customers.

42 Chapter 06 Key facts let s get started.

43 Match. The music that businesses play should "match" the brand and the marketplace. Slow classical music in a fine-dining restaurant can make guests stay longer and increase sales. Since customers often associate classical music with exclusivity, that kind of music fits that particular environment. The music causes emotional reactions that make consumers more positive toward the marketplace. That, in turn, can lead to increased sales. At a bar with younger customers, however, classical music can be inappropriate and make consumers avoid the environment, hurting sales. Instead, the bar owner should play music with a faster pace because it, in this context, leads to increased sales.

44 Integrate. Many are unaware of how music integrates with factors such as scents, sounds, and the number of customers. Changing these factors can affect how effective it is to use a particular type of music in a commercial marketplace. In an exclusive shopping center with plenty of congestion and long waiting times, customers can become irritated over slow classical music because it does not match the situation. This could lead to lower sales. In this context, the music can also worsen the congestion since customers tend to move slower to slower paced music. The same type of music can, however, contribute to increased sales at a time when there are few customers present which several studies show leads to higher sales.

45 Connect. Let the music be an integral part of the marketplace and use it to strengthen the brand and create a stronger relationship with the customers.

46 Music is the strongest form of magic. Marilyn Manson.

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