Everything you wouldn’t know if it wasn’t for Dr Laurie Balbo from Montpellier Business School’s Marketing Department... Here is an example of loss framing

Having received the 2013 award for best written communication in marketing by a young researcher, Dr Laurie Balbo, who teaches at Montpellier Business School, has just seen his article published in Volume 30 - Issue 1 of January 2015 of “Research and Applications in Marketing”. This article, which targets an audience of researchers, tries to shed light on the optimal characteristics of adverts for innovative high-tech products. More specifically, it seeks to identify the optimal formulation of the message in terms of gains or losses, according to the time until which time the product will be available on the market (short term vs. long term).

What is loss framing? Dr Laurie Balbo unpacks the concept

“This research was inspired by the global launch of the Apple iPhone 4 in 2011. In fact, instead of emphasising consumer benefits (gains) in its advertising, Apple chose to focus on everything that users would miss out on if they failed to buy the latest iPhone 4. Put very simply... that’s loss framing.

This persuasive process is notably used and works particularly well in public health communication for prevention and screening. The idea of transposing this to high-tech products comes from framing the message in terms of loss, which works well for health where individuals perceive the presence of a degree of risk (risk of illness, poor health etc.). High-tech products are also often perceived as risky in terms of the benefits they can provide to consumers.

This is why my co-author, Florence Jeannot (INSEEC) and I decided to apply this theory to innovative products in the new technology sector, more specifically, to Google Glasses. We developed different adverts (for display) and tested them with panels that corresponded to the core target market (people aged 18 - 35 years). In addition to framing the message (gains vs. losses), we integrated the distance in time to the act of purchase (ability to buy the product immediately or in six months’ time, as in the case of a pre-launch announcement). The results obtained in three trials conducted on more than 600 consumers showed that it is not framing itself that is interesting, but the combination of framing/distance in time. The results from the three trials conducted with more than six hundred respondents indicate that a message about gains associated with a purchase envisaged for the long-term and a message about losses associated with a purchase envisaged in the short-term are, generally, the most effective combinations - in terms of purchase intention and willingness to pay - when promoting an innovative product (when compared to the “gains/short-term” and “losses/long-term” combinations).

Integrating behavioural economics and psychology with marketing is one of Dr Laurie Balbo’s passions. These elements will form the basis for some practical work on marketing for his students. All the businesses in innovative sectors in our region have been notified!