The New Consumer Psychology: Scanning buying behavior with MRI of the mind 9781138898929, 9781138898936, 9781315674001

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THE NEW CONSUMER PSYCHOLOGY

The term “consumption” is generally thought of as a process by which individuals purchase goods and services. The New Consumer Psychology attempts to explain consumption as a social behavior that satisfies individual values and desires. In modern society, individual needs are no longer determined solely by age or gender, but by the life values and desires that one pursues. This book uncovers people’s subjective experiences of consumption in a capitalist society with interesting inside stories ranging from politics to designer handbags. The book also provides valuable consumer insights into businesses and individuals by going beyond the limitations of population statistics and uses Q methodology to analyze consumers’ subjective responses.This book is an interesting take on how we should shift our focus from products to people and explains why the identification and interpretation of different consumer groups are important in smart targeting. Its content will definitely inspire marketing strategies and market effectiveness. Sang Min (Leo) Whang is a professor in the department of psychology at Yonsei University. He received his PhD in psychology from Harvard University. Dr Whang’s main interests are the effects of socio-cultural circumstances on human behaviors and thoughts. His research interests cover multiple issues, including popular culture, digital media, consumer behavior, cyber space, online games, advertisements, image, and myth. However, much of his research explores the beliefs and common notions people have in daily life and identifies patterns of behavior in everyday contexts.

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THE NEW CONSUMER PSYCHOLOGY Scanning buying behavior with MRI of the mind

Sang Min (Leo) Whang

First published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2016 Sang Min (Leo) Whang The right of Sang Min (Leo) Whang to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Whang, Sang-Min. The new consumer psychology : scanning buying behavior with MRI of the mind/(Leo) Sang Min Whang. pages cm 1. Consumer behavior –Korea (South). 2. Consumers –Korea (South) – Psychology. 3. Consumption (Economics) –Psychological aspects. I. Title. HF5415.33.K6.W44 2015 658.8’342095195–dc23 2015013745 ISBN: 978-1-138-89892-9 (hbk) ISBN: 978-1-138-89893-6 (pbk) ISBN: 978-1-315-67400-1 (ebk) Typeset in Bembo by Sunrise Setting Ltd, Paignton, UK

CONTENTS

List of figures List of tables Prologue: I shop, therefore I am

vii x xi

PART I

Psychology in the marketplace 1 The birth of consumer psychology

1 3

2 Steal my heart!

24

3 “Psychologist suggests a new paradigm for mind inquiry”

42

4 Your mind has just been scanned

57

PART II

Mission: case studies

79

5 Mission: capture the hearts of SK Wyverns fans

81

6 Reveal the mind on phone bills

94

vi

Contents

PART III

The president and Louis Vuitton

111

7 The digital geeks are coming

113

8 The twenty-first-century’s digital neo-anthropinae lifestyle

129

9 Marketing psychology in designer-goods consumption

150

Epilogue: I exist, therefore I am happy Index

182 201

FIGURES

P.1

Some Koreans replace new apartment interiors with more modern and luxurious interior design P.2 The food court at a Singapore apartment complex, a place where anyone can feel free to have a meal P.3 North Korea’s rice/bread factory P.4 Eating instant rice, represented best by the brand Haet Ban, is no longer an unfamiliar sight 1.1 French neurologist Jean-Martin Charcot treated his hysteria patients with hypnosis 1.2 Portrait of Sigmund Freud 1.3 Freud’s “analytical couch” 1.4 Wundt opened the first psychology-research laboratory at the University of Leipzig 1.5 Alfred Binet proved the usefulness of psychology with his intelligence test 1.6 Ditcher used individual desires and unconscious motives to study consumer psychology 1.7 An advertisement that includes a sexual code of celebrity. The brand name translates as “Enjoy,Yes!” 1.8 Cigarette and jeans commercials 1.9 I have wood and bricks … but I really need to know how to build a house! 1.10 Barbara Kruger, Untitled (I shop therefore I am), 1987 1.11 Don’t ask us why! Women’s no-pants look 2.1 The pioneer of public consumer products, Ford’s Model-T 2.2 The most popular cars in 1930s US were GM’s Pontiac (a) and Cadillac (b, c)

xvii xx xxi xxi 4 5 5 6 7 9 10 11 16 20 21 28 28

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2.3 2.4 2.5 3.1 3.2 3.3 3.4 3.5 3.6 4.1 4.2 4.3 4.4

4.5 5.1 5.2 5.3 5.4 5.5 5.6 6.1

6.2 6.3 7.1 7.2

7.3

Figures

Let’s be a mother, the campaign to encourage having a baby The lottery makes people dream about a life reversal The movie The Hudsucker Proxy could be called the bible of marketing The movie Big, in which boy-adult Josh reads the minds of consumers, with great implications for marketers The book Nintendo as Nike’s Competition—let’s buy shoes for kids instead of Nintendo Howard Moskowitz, who tackled the question “What’s the right level of sweetness in Diet Pepsi?” Expected results vs. actual results from market research People’s desire for spaghetti sauce has been shown through the success of Prego and Ragú “Do you eat Grey Poupon too?” Campaign to increase sales of mustard “We are the white,” a new style of ramen, created a sensation in 2011 A man looking for a wallet underneath a streetlight: “Huh? It’s supposed to be here …” Rabbit or duck? Brain activity of a normal woman (left) and a woman with bulimia nervosa showing her low brain activity for controlling food intake In Q methodology, participants sort clues (questions, pictures, sounds) in order of preference SK Wyverns’ main emblem drawn by a baseball fan Baseball fans chanting for SK Wyverns Our brother-in-law type visits a baseball stadium to have fun with the family Fan-fest created by the Off-field-coach type. They watch the game with the mind of a coach For the Lady-next-door type, baseball is a reminder of her youth Tenth players: big fans who live and die for baseball A civil organization poster showing the mind of It’s-unfair customers. Requesting a cut in cell phones bills, they propose a petition of 1 million people with the slogan “We will invade if you do not drop it” Smart-frugality customers participate in promotions Substance consumers prefer to switch to a lower fee carrier (in Korea, LG is known for its cost-cutting plans) Monet (bottom right) and his paintings Former presidents Roh, Moo-Hyun (left) and Lee, Myung-Bak represent opposite faces of social values and lifestyles, regardless of their personal backgrounds—and both may have fulfilled their desires George Soros, the man who broke the Bank of England

37 38 40 43 50 52 53 54 55 58 66 70

71 75 82 84 87 88 89 90

96 102 104 114

116 120

Figures

7.4 7.5 7.6 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10

9.11

E.1 E.2 E.3 E.4

EBS’s documentary MotherShock: Part 2 The typical image of a company man in Korea Former Nexon Holdings CEO Kim, Jung-Ju Movie Architecture 101 and an old CD player—reminders of old times BTV (top); KT OllehTV advertisement The buyer of the first new iPad, and people lining up to buy one KakaoStory, Twitter, and Facebook Nike + iPod kit Digital ludens value what is fun at the moment as most important Hong, Jun Pyo of the Saenuri party, wearing an Angry Bird costume Gmarket homepage (top) and Lotte Department Store online site Google (top) and Naver CBS TV program The Big Bang Theory Angry Birds and Henri Holm, ex CEO of Rovio Entertainment, creators of the globally successful game My Princess (top) and Princess Hours, royal family TV dramas from 2011 and 2006 respectively Members of the Samsung family, who are considered aristocrats The movie The Devil Wears Prada clearly displays the fever and the frivolous nature of luxury consumption Luxury magazine The Self-sufficient type, as in US TV show Sex in the City, thinks of prestige products as necessary accessories for social life Louis Vuitton’s Champs-Élysées store in Paris, France, where the Fantasy type’s dreams might come true The Noble type’s psychological code in their consumption of prestige products is elegance and dignity Hong, Ra-hee (left), Director of the Leeum Samsung Museum and wife of Samsung Group Chairman, Lee, Kun-hee A duty-free shopping mall—a favorite destination for the Unconditional type Not conspicuous, but humble. It is a description of First Lady Michele Obama’s fashion style. It is also a way that Selfrealization types manage prestige products for their own taste Poster for the movie Little Black Dress, based on the novel My Black Mini Dress—Dreams of Luxury Brand, but Outlets in Reality, reflecting the mind of the Avatar type 2012 POSCO TV-CM campaign on the theme of mutual understanding and communication Former President Roh, Moo-Hyun, who had the image of a nice and humble man next door Benjamin Franklin, who appears on the US$100 note The Picture of Dorian Gray by Oscar Wilde

ix

121 124 126 130 133 137 140 141 142 143 145 147 148 149 151 152 155 157 160 162 164 167 169

171

172 184 186 188 196

TABLES

3.1

3.2 5.1 5.2 5.3 5.4 6.1 6.2 8.1 8.2 8.3 9.1 9.2 9.3 9.4 E.1 E.2 E.3 E.4

Who will be the main target group for the new product to be released? The identification of consumer groups from a conventional marketing research “hair care products market report summary (2008)” Cluster analysis results Baseball maniac’s record card Incheon SK fan, Baseball maniac. Criteria of division: are they interested in SK Wyverns or in baseball itself? Our brother-in-law, Off-field coach. Criteria of division: what is the purpose of watching baseball? Entertainment vs. winning or losing Lady next door and the Tenth player. Criteria of division: baseball familiarity (none of my business vs. almost a family) Nicknames to represent the minds of six phone service customers and their key characteristics and desires People’s perception of phone service carriers and bills Four stages of product communication in purchasing (adopted from the Dagmar model of communication (1961)) The six distinctive minds of digital consumers in Korean society Everyday and Delinquent Psychology behind luxury-brand spending by period Psychological code of eight luxury-brand consumer types Different values by luxury-brand consumer types Different marketing strategies used for luxury-brand consumer types Benjamin Franklin’s 13 virtues List of values that help you to make critical decisions and that can be a guidance in your life Leader types Korean identities: Cool guy and Nobody

45 47 85 87 88 90 100 109 135 138 144 154 174 176 177 189 190 192 194

PROLOGUE I shop, therefore I am

My today is like your yesterday Seven o’clock in the morning. Wakes up and stretches in the scientifically designed bed actor “Lee, Sun Gyun” has chosen. Opens the “Dios” refrigerator door, as lovely actress “Kim Tae Hee” does, and takes out the “Seoul” milk that actor “Song Joong Ki” drinks. Puts cheese on “Tous les Jours” grain bread and eats it with movie star Mr Won Bin’s smile. “Bubble Bubble” heads out of the house wearing the shirt washed by actress Han Ga In’s “Tromm” washer. Stops by the gas station singer “IU” recommended and fills up the tank. Starts work by drinking “Maxim” coffee that hot shot actor “Hyo Jin Gong” makes for “Jung Woo Ha,” his coworker. This is somebody’s morning routine in twenty-first-century Seoul. It seems pretty cool and trendy for a fairly well-off single person. Now, let’s take out the names of the celebrities from the passage above and read it again. Seven o’clock in the morning. Wakes up and stretches in the scientifically designed bed. Opens the refrigerator door and takes out milk. Puts cheese on grain bread and eats it for breakfast.Wears the shirt cleaned by the washer and heads out. Stops by the gas station and puts gas in the car. Has a cup of coffee before starting work. When the names of famous celebrities and brands are taken out it becomes anyone’s daily routine. We can find it everywhere. It could be yours or mine. When celebrities use items in daily life, they become “something special” though they are “anything else.” Products linked with popular celebrities are special, but the product has no meaning by itself. When a product becomes something more special to us it

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involves knowing how much money it costs. Let’s say somebody has a Louis Vuitton purse. Does that person look a little different? Maybe not. But if you found out that it takes more than a month’s pay to buy that Louis Vuitton purse they become special. This is the experience that consuming products combined with money can create for people. As a psychologist who studies Korean people’s psyche, it is something I pay attention to. One of the most representative consumer experiences Koreans demonstrate is the desire to imitate celebrities’ consumption. What is the underlying psychology for the desire to imitate celebrities consuming designer goods in advertisements, the outfits of famous TV stars and their hairstyles, and even the desire to read the same books that they have held in their hands during a TV show? What on earth is it? Some might tilt their heads and ask “How does celebrity consumption reveal the Korean psyche?” For Koreans, a star’s or celebrity’s consumption represents money. The goods they consume become special precisely because it is what they—the people who make money, the people who have lots of money—consume. This is the Korean consumer psychology most marketers know very well. Briefly recall your day. Replay the video of “me, so-and-so’s day” living in Korean society. Except for a very few people, most of us live a similar pattern in our daily life. The only minor difference comes from using a group-purchased product because Ace beds are too expensive, drinking Maeil milk instead of Seoul milk, or boiling barley tea instead of using Coway’s water purifier. Although what we consume may differ, my act of consuming something is not much different from that of the celebrities in the advertisements. It may be impossible to explain my day without consumption. If so, do I look like a star celebrity? Let’s talk about how the psychology of the consumer works in the market. As a consumer in Korea, it’s not hard to figure it out.

A thousand minds! For people who think of consumption only as spending money, the phrase consumer psychology itself will sound foreign. Some might even think the word consumption is undesirable. Others misunderstand the definition of consumer psychology. They think, “Consumer psychology? Isn’t that what corporations study to entice people to buy more of their products?” What about media outlets like television and newspapers? Whenever there is a sign of an economic recession or slowdown they make a lot of noise, saying how consumer confidence has decreased. They make a great fuss about how decreased consumer spending exacerbates the fiscal crisis. Media continue to send out the same dull news without knowing the “real psyche of the consumer” hidden behind consumption. Let’s look at the following article. Consumers rarely open their wallets after consumer confidence has hit rock bottom due to continuously increasing high oil prices, reduction of household income and increasing burdens placed on the household budget by

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tuition and house leasing fees. Department stores that enjoyed a boom until the second quarter last year are having a hard time after sales reduced by half in the beginning of this year and the demand for high-end fashion items has reduced noticeably. … Because the nation’s consumer sentiment has plunged. A fashion retail employee at a city department store said, “Not only did the number of shoppers decrease, but I often see customers hesitate to purchase something even after they have found something they like.” … One industry official attributed this to “the disappearing middle class due to intensifying unequal distribution of wealth, and increasing uncertainty of all sorts, which has resulted in decreased demand” and pointed out “it seems like both the slowdown in the real economy and its psychological effect have worked together.”1 Is it the consumer’s fault the nation’s economy is faltering? Does the economy suffer if consumers go to small-scale retailers instead of big box retailers and buy only what they need instead of cramming their shopping carts to the fullest? Let’s read an article with a slightly different view. For overseas luxury brand retailers, Korea’s market is “paradise” where the laws of the market economy do not apply. The demand for products does not cease even when companies increase prices as much as they want. Normally when prices rise, demand falls, but in Korea’s luxury market an extraordinary situation occurs where sales increase with increasing prices. It goes as far as the anticipation of increasing prices leading to an advanced buying spree among consumers. … Luxury brands appear to have enjoyed a high, double-digit growth rate despite the Eurozone’s fiscal crisis and Korea’s sluggish consumption. According to the distribution industry as well as the nation’s financial supervisory service, Louis Vuitton Korea made 497.3 billion won in sales last year. That is a 16.4 percent increase compared to the sales made in the previous year (427.3 billion won). It seems certain that Louis Vuitton will surpass 500 billion won in sales for the first time as a luxury brand retailer in Korea’s market. Italian brands Ferragamo and Bulgari show steep growth as well. For a while Louis Vuitton and Gucci had the highest brand awareness in Korea’s luxury market, but as these Italian brands grow rapidly the market base for luxury spending appears to be expanding. … Luxury brands have increased product prices a couple of times in the past year, but industry officials say the demand for luxury goods will be unaffected. One department store official noted, “Although the luxury market is more or less affected by decreased consumer confidence, it maintains steady growth as there is new demand from the middle class to join luxury brand owners” and “the upper income class through clothes, jewelry or watches, the upper middle class through high quality purses, and the middle class through popular purse brands—they all contribute to luxury goods spending.”2

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The first article discusses a warning sign in department store sales due to decreased consumer confidence. However, the second article addresses increasing sales of luxury items even during a spending slump and regards the expanded market base for luxury goods as its reason. In a situation like this, saying “people do not spend money because consumer confidence has decreased” is due to ignorance. According to this logic, there should be articles like “the buying rate for luxury goods has dropped with a thud because of the economic slump. One by one, increasing numbers of luxury brand shops are closing down” all over media outlets. But the reality is different. Some spending decreases while other spending continues.This is because what moves people—the real motivation for opening wallets—is different. Discussing the real economy in spite of this fact is to miss what is really important. It is as if a doctor dismisses an anxious patient who tries to describe her various symptoms by saying, “It is just nerves. Take it easy, try not to stress out and exercise!” It is a dispiriting experience for the person asking for help. The human psyche is diverse. Even though people may be in similar situations and encounter similar phenomena, their reactions to those occurrences are different. Consumers behave likewise. Let’s say 200,000 people bought the same smartphone model. Did those people buy that model with the same thought or 200,000 different thoughts? Pause a minute and think about it. In the same vein, consider the aforementioned articles. There are some people who try to reduce even the most basic costs of living while others still “buy what I want.” People’s minds are revealed through different consumer behavior: individual acts of consumption together create diverse spending patterns. The reason for not being able to attribute a slowdown in sales in department stores and big box retailers solely to decreased consumer confidence lies here. A study in consumer psychology is a process of exploring the various spending habits in daily life and finding the thoughts concealed behind each person’s consumption.

LED TV and iPhone Rob Kim, in his late 30s, lives in Ilsan, Gyeonggi-do, Korea. He got himself in a bit of trouble last weekend. Although it is not enough to ruin him financially, he is expecting to struggle for at least six months because he has changed his refrigerator, kimchi fridge and television to the latest and finest models. He made the purchases on a whim. The refrigerator and TV he had at home had been purchased when he moved in.That was only three years ago. It goes without saying the appliances were in good condition. Then why did Rob spend a fortune to change all his household appliances? Did his wife press him to change them? Was he manipulated by celebrity marketing? Was he swayed by the half-price sale advertisements? Let’s follow his line of thought. It was two weeks ago. Rob went to a newlywed junior colleague’s housewarming party. His junior colleague’s home, in a new up-and-coming town, was every inch as charming and pretty as a newlywed’s place is expected to be. There Rob saw the new, two-door refrigerator model—the one that dispenses

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ice—that’s been rising in popularity, and the drawer type kimchi fridge, and the newest LED TV. Rob was very envious of his junior colleague’s refrigerator and TV. Suddenly he was reminded of his refrigerator that takes up more than half the kitchen floor, the kimchi refrigerator placed outside in the kitchen veranda and the flat screen TV on the living room drawers. Rob thinks, “Wow, this is great. Should I change my appliances?” However, he can hear his inner voice that says, “Look, how long has it been since you bought new appliances? Are you even able to afford it?” Two weeks later, on a weekend, Rob goes to a big box retailer with his wife and there he sees a half-price TV that has been gaining popularity. He also sees a refrigerator with a lower price tag than he expected. He says to his wife, “Should we replace our TV and fridge?” What happened next? That day Rob bought the TV, the refrigerator, and a new kimchi fridge. Did Rob buy impulsively? What is in Rob’s mind that leads him to change a TV and fridge that haven’t even broken? Did he just want something new? Was he being conscious of others? Was he comparing himself to other people? Perhaps we can think of words like “impulsive spending,” “competition,” “envious feeling,” or”excessive spending,” following Rob’s unpredictable behavior. We can guess what he might have thought. But guessing does not help us understand his sentiment at the moment he chose to buy them. Moreover, we cannot really know “his consumer psychology.” An episode I experienced is also interesting. I’ll introduce it briefly and move on. Not long ago I changed my laptop to a MacBook Air after using a Windows laptop for a long time. Since then, I have felt a change in the way people look at me every time I take out my laptop in a coffee shop. To be exact, I learned that the way people look at a Windows laptop is different from the way people look at a MacBook Air laptop. Although, perhaps what changed first is how I look at it! You may have had a similar experience. “The way people look at me changed when I started using a particular product. I can feel it. I swell up in pride for no particular reason and perk up.” Conversely, there are some who use something special but are careful not to be noticed. What is concealed beneath this cautious behavior? Would you not want people to acknowledge the product is special or would you want people to recognize the product eventually? When someone buys something special, regardless of whether one flaunts or quietly shows the item, one thing is certain: the thoughts and feelings I have through my purchase are completely different from yours, even though the product we consumed or our consumption behavior may be similar. Likewise, studying people’s various desires and motivations underlying the consumer behavior they exhibit is the study of consumer psychology. Around the same time, I met someone who uses a Galaxy smartphone from Samsung and someone else who uses an iPhone from Apple. At first, both left their cell phones on the table. As time passed, the Galaxy phone disappeared from the table. Only the iPhone remained. What does this mean? Why do people’s feelings about their cell phones differ even though both models are smartphones? After that day, there was another, similar meeting. This time everyone’s attention was focused on

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the person who had the new Galaxy Note phone. At a glance these events are not a big deal. They might even be petty occurrences. It might be natural to ask, “isn’t it natural that you become curious and drawn to your friend’s new item since it is a novelty?” But let’s think about that. Why do you become amazed and filled with envy when a friend buys a high-efficiency appliance or a brand new, high-end purse? What kind of desire is hidden underneath that envy? Learning consumer psychology is studying what mindsets these varied phenomena originate from, how consumers’ thoughts develop regarding a specific product or service, and how they change. Here the most important point is recognizing that similar-seeming consumer behaviors may have different motivations at different times. In truth, the reason that Rob bought the new TV and fridge and that I changed my laptop to the MacBook Air is not because the products we have been using malfunctioned. It was not a first-time purchase, either. As most people do, Rob and I changed products simply because we wanted to change them.Therefore, when we say we need to know “the consumer’s mind,” what we really need to know is how to find the exact reason the different consumer behavior that each person shows. In other words, we need to assume that there are various consumer groups and investigate with what mindset these people prefer to purchase a particular product or service.

In the name of trends There is a saying that “the truly fashionable leads the trend.”There is another saying “fashion goes round and round.” If you don’t know the trend, you’re a hick. Fashion does not apply just to what you wear. There is a trend to building a house, eating a meal and reading a book. There was a time when Japanese cartoons were sensationally popular and a time when addicts of American drama were produced in masses. As such, people flock to a particular product or service in the name of trends. A phenomenon limited to one or two people in the beginning gradually spreads over time then explodes. How do we explain it? In psychology, the mentality that makes different people behave similarly on a particular subject is called “crowd psychology.” It is a case in which one reveals something about oneself through a particular act while satisfying a desire. Of course, the social atmosphere is partly to blame for this behavior. The phenomenon where each and every one buys “luxury brand” items is a behavior of the masses who try to participate in this atmosphere. Following a star’s image and style of an era, and going further to imitate their behavior is the same. Advertisements that use popular celebrities fuel this type of social atmosphere. If TV show comedian Choi Hyo Jong, dubbed “judging man,” appears on commercials here and there, how do the crowd respond? They recognize his popularity by saying, “Wow he’s been in so many commercials, the judging man must be really popular!” At the same time, they might be thinking that they should try the goods, product, or service he’s promoting at least once. Then everyone takes action. Crowd mentality and trends are created in this way. They are two sides of the same coin.

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Consumer behavior related to trends is not limited to the purchase of a product. It also appears in forms like plastic surgery and overseas travel. If at a certain point some special consumer behavior suddenly increases or becomes popular, we should first look at the consumer psychology of the masses. People often think consumer psychology is dependent on the mind of the individual. However, this is a misjudgment. Consumer psychology speaks for the most general and representative mindset of the masses that live in “some specific time and space.” Therefore, it does not make sense to scold young people for wanting two-door refrigerators as a must, water purifiers that dispense ice, drum washing machines and nice cars, even if they do not have a house, by reminiscing about the days when the question “who has a fridge in your house?” was asked. This is because their consumer behavior represents what they feel and what they want of the people who live in twenty-firstcentury Korea. Go to a display apartment. New display apartments about to sell are “dreamfull-house” types that reflect mass dreams on key points. The interior design and the major appliances necessary for living are built-in perfectly. Satisfied people exclaim, “I am going to live in a place like this!” However, a new phenomenon has emerged: tenants have started to change the inner structure and interior design of the apartment according to their individual preferences. It is commonplace to rip out all the built-in electronics and refurnish (Figure P.1). At one time this consumer behavior was criticized as excessive spending and a waste. However, this type of educative argument does not work any more. A consumption phenomenon that concerns our bodies has spread like wildfire. Plastic surgery that used to be associated with a fear of “going under the knife” and the principle “not to go under the knife if possible,” and regarded as “a hush-hush” affair that “as long as you are going to do it, do it unbeknownst to others,” is now

FIGURE P.1 Some Koreans replace new apartment interiors with more modern and luxurious interior design

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undergone by anyone who can afford it. They get it done while saying, “If you endure a little pain you will be reborn as a gorgeous beauty. So why not?” Look at cable channel Story-On’s program Let Me In is a program that shows, in each episode, a woman with an inferiority complex about her appearance who then receives consultations from nine doctors and free cosmetic procedures over the course of three to four months. This is reality TV at its extreme. The following is the story of one housewife in her 30s who appeared on the show. She thought of her small, flat breasts as a problem. She thought she was less sexually appealing because of her breasts. She regarded this as the reason for her husband’s unfaithfulness. She sent her story to apply for the free cosmetic procedures and was proudly selected to be on the program. She received breast augmentation surgery, thigh and stomach liposuction, doubleeyelid surgery, forehead implants, cheekbone reduction, rhinoplasty, epicanthoplasty, and so on.The total cost, including cosmetic dental surgery, dermatology procedures and psychiatric treatment was US$60,000. The client who succeeded in receiving a total body makeover received enthusiastic applause from her family and the audience. This program made a lot of noise from when it was first aired. There was criticism that the show reflected the societal trend of obsession with appearance, and there was also controversy over human rights. However, the viewers’ reactions to the plastic surgery program itself were indifferent to this criticism. There were more people who took the stance that they envied the changed appearance or the brave choices the people on the program made. The viewer reviews on the program’s website reflected this feeling. “I also want to change after looking at the people who appeared on the show.” “What is the selection criterion?” “It would be great if men were eligible too.” “Is everything really free? ”3 Most of the content is positive. This trend has even changed the behavior of celebrities. In the past they used to want to hide the fact that they received plastic surgery and were embarrassed about it, but now they openly admit to having had plastic surgery done. Sometimes they use this as an aggressive promotional method. People’s thoughts towards plastic surgery have changed. It is a clearly different consumer behavior from the past. What is the reason for this? Why did people’s attitudes completely change? Above all, the biggest reason might be that we have begun to acknowledge different ways of living. We have come to know that people have different ways of satisfying the desires in their hearts, that things have changed drastically from the past, and that our own desires exist among varied desires. Consumption is an act that best reveals the human desire. Through consumption we better understand who we are and who those around us are.

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A country that buys concrete structures, a country that renovates College professor K visited Vladivostok in Russia for a seminar. He came to know a surprising fact after he went on a sightseeing tour following the scheduled seminar. Russia’s apartments and Korea’s apartments are bought in completely different conditions. The local who guided him pointed at a bare building and informed him that “This is the apartment. Here we buy a bare concrete structure.” How different from Korea where apartments are installed with perfect interior design to satisfy the consumers before occupants even move in? The guide continued, saying, “This is the difference between Korea and Russia. The builder only makes the building structure and the resident installs the interior facilities. It is a characteristic of socialist states.” When K heard what he said, questions arose, such as, “A socialist state? Then the Chinese apartment I saw a few years ago too... K visited China when invited by a certain college. Arriving in Shanghai, K was very surprised by the newly built high-rise apartments in the Pudong area. He was shocked by the prices, but above all he was shocked because of the different apartment-selling culture. They were selling each apartment as a bare concrete structure shell! They said the resident would install the interior facilities. There was no floor installed nor were there doors. Residents literally bought a concrete mass and decorated the interior themselves. K was very curious as to why this would happen. However, no one clearly explained the reason. So he moved on thinking, “I can only say it is what it is if they say that is how it works.” The apartment-selling culture and consumer behavior differ even though it is the same apartment people live in. While Koreans would rather completely redo what the apartment companies have already installed, the Chinese and Russians are happy purchasing something even if it is only a concrete box. Like this, the behavior pattern of members of society changes if the social system or culture differs. Consumption, which reflects a society’s lifestyle, is all the more affected. In any society if there is a change in a particular type of consumption it is possible to conjecture that the typical lifestyle in that society has changed. It is especially easy to detect a change in lifestyle in the way people lead their everyday life. Let’s think about eating breakfast. How many households in our society currently set the table and eat breakfast together as a family? However only 30 or 40 years ago this was a very familiar scene. Let’s look at the American case. In the 1940s and 1950s families gathered to have breakfast together. Now most families take care of breakfast by themselves. They eat something simple, like milk and cereal, or coffee and donuts. They take lunch at work, or the cafeteria at school, and have dinner on the way home. The only times the family members gather to have meals together is on weekends and holidays. Korea’s eating culture is not much different. It is not on the same level as America, where everyone takes care of themselves, but compared to the past it has changed significantly. I experienced something similar a long time ago in

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FIGURE P.2 The food court at a Singapore apartment complex, a place where anyone can feel free to have a meal

Singapore. I made an appointment to have weekend brunch with a professor who invited me to his house. Naturally, I thought I would have breakfast; however, he only served tea after he welcomed me. Then he guided me to the food court in front of his house (Figure P.2). It turned out that everyone there has all three meals at the food court. In the 1970s, the South Korean media ran an article saying, “the housewives in Hong Kong or Singapore do not cook. They buy everything from an eatery. They are in an enviable position compared to Korea’s housewives—” and they mentioned “North Korea’s rice factory ... in North Korea meals are not cooked in the home but are provided by the factory” (Figure P.3).They included the comment that it was inhumane. However, South Korean people now buy ready-made meals too. They often buy mass-produced lunch packages, or Haet Ban instant rice (Figure P.4), from the supermarket. Eating out, and a take-out culture, has become an everyday matter. This is a classic example of how consumer psychology changes depending on times and social practices.

Spend, then you’ll be happy “A table, a chair, a bowl of fruit and a violin; what else does a man need to be happy?” is a quote from Erich Fromm’s To have or to be (1976). Here Fromm distinguishes “having” from “being” and points out that “having is not important for people to be happy.” There is no law that says you become happier the more you

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FIGURE P.3

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North Korea’s rice/bread factory

FIGURE P.4 Eating instant rice, represented best by the brand Haet Ban, is no longer an unfamiliar sight

have. Everyone knows this. The annually published happiness index for countries shows this as well. However, we still want to have “something better and something more if possible.” Of course, there may be differences in what and how much they want to have just because every person has different desires. But it is hard to find a person that does not want anything and we, as humans, “try to possess (or buy) things or services we want.” It is a sentence that implies the very characteristic of a consumer society. Everyone has had the experience of searching the Internet all night long for something they want at a cheaper price. Most have also probably experienced buying something impulsively after pursing your lips and promising yourself to “not buy it.” There was probably an instance where you shot a glance of jealousy and envy at a friend who has something you wanted so

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much. However, spending does not always bring joy. There are many cases where you regret buying something you have longed for. Stephanie Jang lives in Paju, Kyeong Ki Do, near Seoul. She is in her fifth year of work in general hospital administration. She earns a relatively high salary compared to her friends because she got a job immediately after graduation from a junior college. Stephanie has been researching car prices for two months after getting a driver’s license three months ago. Not only would she have a meeting with the salesperson at the dealership after work, but she stayed awake many nights reading and considering-test-drive reviews online. Her family and friends recommended the purchase of a compact car. They think it would be ideal for her since she is a beginning driver, she is young and her insurance is new. However, Stephanie’s opinion is different. She thinks, “I want to buy something I want since it is my first car. I want to drive something nice. Shouldn’t I at least be able to buy a car that I want after working so hard for five years?” She eventually signed on a mid-sized sedan—a Hyundai Veloster Turbo—with a two-year payment plan. The price slightly exceeded her annual income. “Purchase and you will be happy.” We hear this message often in a modern society ruled by the desire to consume. It’s the voice of the so-called god of impulse buying. The convenient payment methods represented by a mouse click, credit cards, and 24-hour availability, prompt even the most frugal penny-pincher to spend. People mock themselves by referring to the “descent of the impulse buying god” or “Mr Salary logging in and logging out immediately,” but still satisfy their desire to possess anything anytime anyplace. They believe they become happy when they get what they want. In such a climate, the group of consumers primarily represented by those who are willing and able to buy designer products, the group that blindly follows the consumption habits of the upper class, and those looking for vicarious satisfaction emerge. Stephanie purchased a car that comes close to her annual salary. She is very happy at the moment. She feels ecstasy every morning when she opens the car door and sits in the driver’s seat. She is much more happy and excited on her way to work or on her way to meet a friend than before. Her happiness will continue for a while. That is, before the car payments, insurance payments, gas prices and other maintenance fees threaten her livelihood, and before the depressing situation where she has to give something else up because her salary does not increase! It is understandable that financially well-off people buy high-priced products many times over. But how do you explain people without money who are obsessed with buying luxury products? Or how can we explain the phenomenon of not being satisfied until buying something that is at least similar to luxury goods? Is it simply a matter of seeing and wanting something? Is it a common phenomenon that college students without financial means purchase designer goods? Some people blindly chase the trends of the upper class, other people want to earn recognition through expensive items, and still others seek self-satisfaction by possessing something unique. Why in the world do they do this? What was the real reason for picking a mid-sized sedan and going overboard, when buying

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a simple compact car could have been more practical? What is at the bottom of her heart that she thinks she could live as a “car poor” person but cannot drive a used or small car? In this way, these complicated thoughts show consumption is not just about buying things. It goes further to reveal hidden human desire. Especially, it is the desire to possess. People usually use their possessions as a means to satisfy their desires. However, it is impossible to fulfill your desire no matter how many things you own. This is because the moment a desire is met it gives birth to a bigger desire. There is no complete satisfaction when it comes to desire. The average Korean has greater abundance compared to a few decades ago. We no longer have people worrying about daily subsistence. There is only the mass that worries about “the need to possess something better.” Yet the majority of Koreans still think of themselves as unfortunate. They always feel like something is missing. They live as well as others and they have as much as others but they feel empty inside. The reason lies in consumer psychology. This is the irony of moving further away from happiness while striving towards it. The moment you think you have satisfied a new desire, you realize that desire has become old and there is no room for happiness. Thus, humans experience the reality of Zeno’s paradox, where desire always precedes satisfaction. Consumer psychology lies at the heart of that desire.

Consumer psychology within the cultural and social context Consumer psychology is a comprehensive term. It encompasses not only the simple act of consumption but also the psychological motivation that leads to the purchase and the emotional state after the purchase. In this context, psychology sees consumer psychology not as the act of consumption itself, but the understanding of how the human mind works in relation to consumption and how the mind is revealed through the act. Then how can we know the consumer psychology of both the masses and the individual? A genuine exploration of consumer psychology starts from questioning the consumer behavior we experience in daily life. No matter how minor the consumer behavior is, when we start to question it we can begin an earnest study of what consumer psychology is and which psychological mechanism applies to different types of consumer psychology. Consumer psychology can’t be explained by the simple logic that a consumer buys something because they fancy it. It is a complex matter that involves the popular belief that can only be understood in the context of each unique culture, comprising various beliefs and conventions. Consumption is not limited to being an individual problem.The pattern changes depending on what kind of social system the consumer lives in, what his/her values are, and what kind of cultural and traditional background he/she comes from (think of the aforementioned example of buying apartments in China and Russia). However, what is important above all else is the individual’s desire. The reason the way we purchase something or use a service changes according to society and culture is because there is a difference in how we satisfy our desires. Do all of the people in the same country demonstrate similar consumer behavior? Of course, that is not

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the case. Even if people live together in a society, they each have different thoughts. There isn’t any reason for their consumer psychology to be the same when they have different minds. On March 11, 2011 there was an earthquake in Japan. At the time we witnessed a very peculiar behavior from the Japanese. Even though there weren’t enough supplies, the Japanese people waited quietly. There was no buying spree. They just waited, even though there were no rations after two days had passed. Did a rich country like Japan not distribute aid because they lacked supplies? No. They could not transport the supplies. While the Japanese waited for the relief truck to bring much needed water and food, the truck was stranded because there was a roadblock. The Korean and other foreign press spoke highly of the Japanese sense of public order and made a big deal of how they were “an exemplary model of civilized society.” They emphasized how calm everyone remained in the face of a terrible natural disaster, and the absence of looting or arson. However, a week later their view of Japan changed. It appeared that the Japanese are a society that follows order very well, but that this society is built on a “sophisticated manual. And in a society that operates by the manual there is no flexible way to manage a crisis. Let’s consider a few hypothetical situations. What if there was a crack in the highway? According to the manual, the situation has to be controlled immediately. It is necessary to restrict entry to the highway. Then they have to investigate the severity of the crack and start thorough repair work.The conclusion? Everyone has to wait. It is highly likely that people in danger will starve to death while the crisis is managed according to the manual. The Korean media that saw the Japanese behavior as only positive slowly started to mention the Japanese behavior that showed no emotion, even in an outrageous crisis, and how they almost seemed lifeless at times. And they started to ask, “What kind of people are the Japanese? What are their true feelings?” Let’s look at Korean actions in the same situation. There is a crack in the highway. Most Koreans would not hesitate to carry on driving instead of blocking the road. They act first with the thought that, as long as they don’t fall in a hole, they will be okay. When an accident happens, they distribute rations to people who need them the most. They respond immediately and flexibly instead of following a manual. The shelling by North Korea of Yeonpyeong island off South Korea is a good example. When the event occurred, the island residents decided to flee and evacuated to Incheon, a nearby city. There they chose to stay at a spa when there wasn’t a proper place to stay and the spa owners gladly provided the space. They thought this should be handled first and that they could bill the city of Incheon later. Although the crisis may be the same, crisis management differs by country and by culture. Yet American consumer behavior theory and consumer psychology is taught in Korean colleges as if it is universal. My reason for writing this book originates from this environment. It was not possible for me to teach my students or conduct research while naïvely thinking that Koreans consume the same way

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Americans do. We can only know what consumer psychology truly means when we see with our own eyes consumer behavior in a particular society. Translating American texts and simply applying them is far from studying the consumer psychology that occurs in different societies.

A master or a slave of consumption? Some might argue that since we are the people directly involved in consumption, we are the masters of consumption. Of course we are. Humans are masters of consumption. However, we can also become slaves of consumption. If we are clear about our identity and using our initiative regarding consumption, then we will become a master of consumption. But if we lose our identity or don’t use our initiative we will become slaves. I’m not arguing that we should not consume while we live in an age of consumption. We cannot live like Henry David Thoreau who built a small house by Walden Pond and lived in near isolation. I am trying to make the point that we can become masters or slaves of consumption depending on how we act. Just like different thoughts lead to different consumer behaviors, one can become a master or slave of consumption depending on which innermost thoughts form the basis of consumer psychology. The people living in twenty-first-century Korea are both consumers and marketers. They are consumers in the sense that they utilize the goods or services produced by others. However, they are marketers in the sense that they need to provide for their livelihood and have the value of their service acknowledged by others. This is because we have to sell our skills or labor to others whatever they may be (we express this in grand terms such as “reaching your potential”). Therefore, the way we make our living in modern society could itself be a type of consumption. Everyone engages in a broader form of consumption, of building one’s life instead of just buying a product. Consumer psychology is “something I need to live a happy, enjoyable life, knowing the consumer that I am and effectively promoting myself to others.” Therefore, we who live in a capitalist society should choose the analysis of consumer psychology as a major priority. This is because marketing has become a core activity of one’s life regardless of what field of work one is in. This book informs the reader of various psychological and marketing phenomena that can happen to us, both as consumers and marketers of our lives. This book is divided into three parts. The first, “Psychology in the marketplace” (Chapters 1–4), deals with the background of how psychology and marketing came together, the process of how consumer psychology came along, what are the most important things when researching the mind of the consumer, why it is important to read their minds, and how existing psychological research has been conducted. It also discusses how to use an MRI scan of the mind as a tool to understand the consumer’s real innermost thoughts, which other psychology research tools cannot do. This is a research method that shows how consumers’ minds each react under

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the premise that “consumers’ minds differ from individual to individual.” I believe this method is the most useful tool for discovering the consumer psychology of Koreans living in Korean society. The second part, “Mission: case studies” (Chapters 5–6), introduces examples of the MRI scans of “mind,” which I study with emphasis among the different theories discussed in Part I, applied to real cases. The “special missions” received from corporations have been made the theme of actual research. Sports activities and cell phone consumption that mirror diverse Korean lives are the subjects of the research. It deals with the consumer’s much-troubled and much-talked about cryptic mind, a mind that consumers themselves do not seem to know. The third part, “The president and Louis Vuitton” (Chapters 7–9), handles digital consumption culture and luxury item consumption as the ideal tools to explain Korean consumer psychology. Digital consumption culture is the area where the consciousness and behavior patterns of Koreans living in the twenty-first century are clearly visible, while luxury goods consumption is a typical consumer phenomenon where Korean hidden consumer psychology is best revealed. Luxury consumption is not just an act of buying an expensive item, but is a way of realizing an individual’s way of life or desire. From a consumer psychology perspective, it is a hot topic with plenty of room for discussion. I meticulously address the hidden desires behind consumer consumption styles and mentalities through digital culture and luxury consumption, as if scanning with an MRI machine. Ultimately, I was curious as to what Korean inner thoughts were. As a result, I was able to find what the Korean lifestyle looks like when lived in a digital society and what type of consumer each of us is. The epilogue is the conclusion I reached from researching consumer psychology and marketing psychology for the past ten years. In a capitalist society, everyone lives simultaneously as master and slave of consumption. However, humans are unique in that they can lead satisfying and happy lives. In order to accomplish this, one has to know one’s exact innermost thoughts, establish one’s values, know the features and culture of the society one is in, and act boldly and independently. Only then we will be able to escape being a slave of consumption. *** Before continuing, it might be a good idea to ask yourself why you are reading this book. Do you want to know how you will be able to come up with an ideal product to satisfy everybody? Then maybe the time has not yet come for you to read on. Or do you want to unearth the hidden wishes and wants nobody knew existed? Then I have the feeling that this book might become a good companion of yours. How do you define consumption? Is it limited to over-the-counter transactions between money and products? Is true love consumption? Can voting for a

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candidate in a presidential election be consumption? What about your life or identity – are they products? How do you acquire them? It might be interesting to keep an eye out for ambivalence and dissonance as you read. For example, why do some people criticize luxury but save money to buy a designer wallet? Why do others praise a product but cannot answer why? Why do some people work hard to win recognition but get angry when somebody else says “you work very hard”? These rifts between people’s behavior and thoughts are the untrodden trail to exploring the veiled consciousness. One way would be to compare my concept of “consumption” with that of Erich Fromm. Fromm dichotomized human behavior into “having” and “being,” but he did not tell us how the two can be united and experienced in the life of each person. For Fromm, having is shutting oneself and others away from growth, similar to death. In comparison, being is realizing one’s unique potential. However, in this book, “the act of consumption” itself is viewed as a way of actively living one’s own life by uniting having and being. It is also viewed as a way of distinguishing oneself from others. Having and being are united in Korean people’s minds in a unique way. One side of Korean consumers’ psychology is the desire to own or cover oneself with an image that one wants to present to others. The less one knows about oneself, the more this happens. The product one really wants or the life one really wants to live become less important, and presenting oneself to others becomes dominant. The other side of Korean consumers’ psychology is the perception of life as a sort of unfixed meaning and the process of expressing oneself, rather than a result of selfexpression. People with such a mindset might think that they are building a new house on bare ground; they might think that they are not consuming to own but rather consuming to produce their lives. If you can comprehend the multiple meanings of “consumption,” which cannot be reduced to products or money, you will be able to see how having and being interact. An act of consumption by a person, whoever he or she is, represents countless minds rather than one. It represents the unique meaning and value each of us is trying to make. It seems such ambivalence is present in all cultures, not only in Korea. I suggest that you also explore by yourself how different minds can be revealed through the specific acts of consumption of the people right next to you!

Notes 1 2 3

Status of consumers’ psychology: Cloudy, No shoppers even in department store, No-cut News, April 1 2012, http://www.nocutnews.co.kr/news/926620. ‘Luxury brand-holic’ Korea, Seoul Economy, April 4, 2012, http://economy.hankooki. com/lpage/industry/201204/e20120404175746120180.htm. Over-30s female got 60,000 dollars plastic surgery for free, then..., Korea Joong-ang Daily, Feb 2, 2012.

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PART I

Psychology in the marketplace

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1 THE BIRTH OF CONSUMER PSYCHOLOGY

When science meets the human mind In the late nineteenth and early twentieth centuries, four pioneering scientists attempted to study the human mind: Jean-Martin Charcot, Wilhelm Wundt, Sigmund Freud, and Alfred Binet. Their investigations varied slightly, but they agreed on one idea that the human mind can be studied just like the human body can be studied by a doctor. The public response went two ways: fear and curiosity. The public was horrified at the possibility that scientists could use the human mind as an experimental object to be studied.The mind should not be such a thing at a time when it was believed that God created the mind and soul. How can a human study a human’s mind? But the public also showed great curiosity towards the idea that the study of the mind could change how humans were perceived. There was fear of stepping into an area that God had hidden, but there was hope as well. The hope to understand the human mind, which was thought of as a private and subjective area, through reason, was a reflection of the spirit of the times. People really began to believe in the power of science in the late nineteenth century. Now science turned the mind from something mysterious into something objective; or it began to anticipate being able to do that. People watched the process of psychology research under the name of memory research, or mental physics, with this mixed feeling of fear and curiosity. At the end of the nineteenth century, when the public showed amazement and curiosity about mind study, there was one person who daringly tried to treat diseases of the mind much like treating bodily diseases. He was the French neurologist Jean-Martin Charcot (Figure 1.1). At the time he showed that it was possible to treat mind disease through hypnosis, which was the latest technique. In this context, he ran a neurology clinic in Paris and applied the hypnosis technique to

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FIGURE 1.1 French neurologist Jean-Martin Charcot treated his hysteria patients with hypnosis

patients that showed symptoms of hysteria, paralysis, visual impairment, fainting, and amnesia, and treated them after thoroughly studying and classifying their conditions. There was a neurologist who was fascinated by watching Charcot treat his patients. He was the young Sigmund Freud from Vienna, Austria, who had just finished his residency (Figure 1.2). At that time, he came to France to get advanced medical training after his doctoral program. Freud was impressed by Charcot’s hypnosis treatment and he opened a clinic in Vienna that studied the human mind. At the time Freud was aware that abnormal behavior, or mental disease, was caused by the mind. Therefore he saw mental illness as a disease of the mind. His understanding was very controversial from the perspective of the day because back then when someone was hysteric, manic-depressive, or did something abnormal people believed it was a curse or the devil’s work. Freud thought these types of abnormal behavior were caused by a mental disorder; and he believed that a disease of the mind could be treated just like a doctor treated a diseased body. This is generally accepted as the beginning of what is now known as psychotherapy. Freud claimed that psychotherapy could be carried out through dialogue therapy—the “talking cure”— or psychoanalysis, a clinical method for treating mental illness through a dialogue between a patient and a psychoanalyst.

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Was it the scientists one following on the heels of another, who caused the sensation with their new study? Interest in psychology—the study of the mind— grew by leaps and bounds. However, there was a problem. Although it was intriguing and amazing to explore the mind, it was necessary to find out how useful this study could be in daily life. In order for psychology to be established as science, there had to be something tangible beyond just being interesting, and it had to offer specific assistance to people’s lives, or at least suggest a solution to a certain problem.

FIGURE 1.2

Portrait of Sigmund Freud

FIGURE 1.3

Freud’s "analytical couch"

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FIGURE 1.4 Wundt opened the first psychology-research laboratory at the University of Leipzig

Psychology remains controversial over a hundred years after it emerged as a new science between the end of the nineteenth century and the beginning of the early twentieth century. The idea that the mind becomes diseased and can be treated was strange enough, but the claim that it could be done through dialogue seemed to have gone too far. People whispered among themselves. Still, Freud was quite sure. He established his theory by studying the suppressed subconscious and how people would defend it. This led him to devise his clinical treatment that deals with mental illnesses through a dialogue between psychoanalyst and patient. Since then he has also become known for free association, emotional transference, and the psychotherapy technique that observes subconscious desires through dreams. Unlike Freud, who explored the mind as he treated mental disorders, Wilhelm Wundt tried to investigate the human mind, hidden in normal behavior, scientifically. In 1879, he opened a psychology-research laboratory at the University of Leipzig and studied the human mind. At the time, his laboratory received great attention for introducing the experimental methodology of physics and physiology, which were praised as the hottest sciences. Many scholars came from Europe and the US to observe his research. They came thinking that studying normal people’s minds was on a different level to treating mental illnesses or abnormal behaviors, and they expected useful results from his research. However, it was not easy to find out what that result was. Dealing with the mind was very different from treating the body’s diseases. It was not like physics or chemistry, where a new law was discovered.The most difficult aspect was that it was hard to give any specific assistance to a particular mental domain despite knowing the condition of the mind. Thus, it was very difficult to pinpoint what people wanted to address in their life, what was really a problem, and what could be specifically gained from resolving that problem. Experimental psychology seemed to fail to establish itself as a science.

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Psychology? What is that for? Psychology started from the tradition of the natural sciences, with its usefulness as a practical science, and had an identity as a humanities and social science subject. The person who made psychology an emerging science clearly known to the general public was French psychologist Alfred Binet (Figure 1.5). It was thanks to the intelligence test he developed that psychology was recognized as having practical value. Binet made remarkable achievements in experimental psychology, abnormal psychology and child psychology. He developed the intelligence test in the early 1900s, with his colleague Theodore Simon, and it turned out to be helpful in everyday life and thus psychology came to a turning point. Public interest does not last very long. Regardless of how engaging something is when introduced, it soon becomes old, and the public loses interest and enthusiasm very quickly. The theme of disease of the mind, introduced at the end of the nineteenth century, was definitely novel. Investigating how the normal mind, not just the diseased one, would react in everyday life was even more so. It was intriguing and new. However, unlike discovering new materials or treating a disease through scientific investigation, it was unclear how and where the investigation of the human mind could be used. In other words, it was difficult to show how the research results could be used in reality. Naturally, public interest dwindled. Alfred Binet showed how psychological research could resolve real problems. At the time he was developing his intelligence test, France changed from a monarchy to a republic, and the city of Paris introduced a new public educational system in which everyone would receive an education. In the past, only males of a specific class, including aristocrats, could receive an education. Schools opened their doors to the general public. But there was a problem. People of diverse backgrounds and ages had to be taught together. There was even a situation as absurd as a nineyear-old child and a twenty-year-old adult sitting in the same classroom. Teaching materials were also inadequate for the mix of students.

FIGURE 1.5 Alfred Binet proved the usefulness of psychology with his intelligence test

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What to teach to whom was a very serious consideration. Accordingly, Paris City Hall requested that Dr Binet resolve this problem as a psychologist and, as a result, the Binet-Simon test was born. Binet tried to assess each individual’s ability with a standardized test of intelligence. This example shows how useful it is to measure and distinguish each person’s mind. Intelligence research became a main field in psychology. Binet’s intelligence test is noteworthy as a special incident in early psychology because it is an example of directing curiosity in a purposeful way. At the time, scientifically studying the human mind came from nothing more than being someone with a new academic desire or unusual curiosity. At the news of a psychology laboratory that studied the mind being set up, many researchers from all over the world, especially the United States, visited Wundt’s laboratory, researchers who returned to America to teach psychology in universities. Since then, an interesting phenomenon has happened in America. The psychological research that started at the level of curiosity, or scientific expectation, became an important activity that changed lives. The United States accepted psychology within the laboratory as an important scientific research method. American society’s tradition of pragmatism actively utilized psychology, a new area of study that explored the human mind, to solve practical problems. It applied psychological research results and methodologies to education, as well as the army, social programs and the resolution of various other problems, including economic activities. New psychological domains, such as educational psychology, developmental psychology, and industrial psychology all emerged around this time. Research into consumer behavior or consumer psychology was applied in the same way. These days everyone is familiar with phrases like consumer psychology and marketing psychology. There are few who think there isn’t anything to it—if there is something to buy and one has money then one buys it. However, even just a half century ago matters were different. That was a time when the word ‘purchase’ was more fitting than the word ‘consume’—a time when it wasn’t a choice but a necessity to buy something. At that time, there was somebody who claimed that people’s (consumer) behavior, motive, and desire always applies. This was Dr Ernest Dichter, who actively applied psychological research to American daily life (Figure 1.6). An American psychologist, born in Austria, he was the first to give prominence to consumer behavior. Known as the “father of motivational research,” he was a marketing professional. Dichter was the first psychologist to apply Freud’s psychoanalysis ideas and techniques to researching consumer behavior in the marketplace. He suggested the idea that an intrinsic, unconscious motive awakens individuals’ desires and this was widely applied to the advertising industry. In 1998 The New York Times described him as a figure who not only used the phrase “focus group” for the first time, but also made it well known how important image and persuasion is in advertising to the public. Psychological research on consumer behavior began after World War II, when America’s market economy was at its peak. The enormous factories that had produced war supplies began to make various new products. The tremendous

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FIGURE 1.6 Ditcher used individual desires and unconscious motives to study consumer psychology

production capacity became directly related to the question, how can we sell more of these products that are pouring in? So experts began to find various ways to stimulate the public’s eyes and ears to get them to recognize new products and use them immediately. That is, they began to study ways to awaken the consumer’s purchase-desire, consumption-desire. Aggressive attempts to connect consumer behavior and the human mind started from here.

I am the sum of everything I own In 1890, one book took the world by surprise by suggesting a new standard that people did not dare to think of. It was not the traditional yardstick of morality, rules, customs, or propositions. It was the self. The title of the book with this astonishing content is The Principles of Psychology (1890) and the author is William James, who is referred to as the father of American psychology. He claimed that individuals set a clear standard when determining ways of satisfying their desires, and that standard is the self. This is a very American standard that differs wildly from Europe’s traditional psychology. It was a perspective that was possible because America started as a nation of individuals, unlike Europe where democracy took place after revolution from tyranny. He saw the self, the foundation of an individual, as the measure above all. In The Principles of Psychology, he expressed the concept of self as: In its widest possible sense, however, a man’s Self is the sum total of all that he CAN call his, not only his body and his psychic powers, but his clothes and his house, his lands and horses … One man’s “self ” is the sum of everything he can call “mine”. In what is “mine” various things are included starting with the body, clothes, house and land.1 It is a surprising and refreshing analysis. What an honest description of ordinary human life by someone who lived in the same era! If now, in the twenty-first

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century, someone living in Korean society was defined as such, he would undoubtedly be offended, thinking, “Do I look so materialistic? Who does he think I am to say such things?” Most people want to see themselves as someone who is much better than their actual selves (they want to think of themselves as more lofty beings than as animals that act on instinct). Regardless of whether this is agreeable or not, the self that James discusses is “the sum of everything I have.” If everything we own shows who we are then shouldn’t we know what we possess and what we want to possess to know ourselves as we are? Shouldn’t we look at it from a different perspective to before? Dichter saw the mentality of wanting to have something as drive or desire. He expanded what Freud called the libido and life drive as the drive to consume. To him, psychological research was investigating how the desire of something arises, how people recognize this desire and how they fulfill it. Dichter conceptualized the public consumption of a particular product or acceptance of a product as sexual—as the vicarious satisfaction of the unconscious desire. Think of liquor, cigarette, or jeans commercials. The advertisements for these types of product usually employ sexy celebrities or models. Is there an image that comes to mind right now? Do the soju (the most popular Korean liquor) commercial that says, “It’s delicious because it’s soft” and the jeans commercials that show off the slim figures of beautiful men (Figure 1.8) and women come to mind (Figure 1.7)? Right, that is exactly it. These are commercials that usually also sell

FIGURE 1.7 An advertisement that includes a sexual code of celebrity. The brand name translates as "Enjoy,Yes!"

The birth of consumer psychology

FIGURE 1.8

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Cigarette and jeans commercials

audiovisual fantasies. It is possible that the public is consuming a model’s image of innocence instead of a shot of soju, or is appreciating the ruggedness of a cowboy instead of a cigarette. They might be buying the singer Rain’s buff sexiness instead of just buying an okay pair of jeans. Subtly, the products with sexual codes are being consumed. Of course, there are many commercials that trigger the function of vicarious satisfaction. Consumers watching famous figures or popular celebrities use particular products and delude themselves into thinking, “Maybe I could look like the celebrity if I use that product.” It is in this vein of thought that expensive cosmetics sell out in a moment. All these commercials have made great use of Dichter’s consumer sentiment. At the heart of various consumer behaviors that are easily identifiable in everyday life is the human desire of wanting to have or wanting to buy, at the end of which is possession. The word desire itself shows the consolidation of reason and emotion. For example, when we say sexual desire it feels frank, but the physical aspect seems overemphasized. However, when the word love is used to convey the same meaning it feels very different. It is as if the same experience could be used to satisfy different desires depending on where the focus lies. The material value expressed by money could be embraced as similar for everyone, but it is absolutely not so when it comes to psychological value. That is different for everyone. Therefore, the consumer behavior that follows consumer sentiment is the very thing that best reflects each individual’s values. And people’s various desires lie hidden in those values. For these reasons, consumption is a specific act that is the projection of each individual desire as well as a behavioral expression

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that best demonstrates the difference between individuals. Knowing the human mind through consumption is a process that confirms how each different individual’s specific desire is satisfied in a completely different way.

The consumption, consumer behavior, and consumer sentiment of business management Aspen Kim majors in psychology at Yonsei University. He wants to work at the event planning company Fantasia+ after graduation. Fantasia+ prepares and organizes launch events for global automobile companies, like Audi or Volvo, and medical device conventions.The company also has a high rating in its industry. As he worked as an intern for six months, he understood that the key to every event was, the accurate reading of people’s minds.The scale of an event did not matter. Regardless of how good the event was, it was all over if people did not listen. Back at school, Aspen decided to study marketing integrated with psychology in the remaining two semesters. After some consideration, he chose Consumer Behavioral Theory and Consumer Psychology. He thought it was important to know the consuming public’s mind first, in order to know how to stimulate people’s interest and make them move. However, it was surprising that there were more subjects that touched upon consumer psychology and behavior in business management than in the psychology department. Let’s look into consumer behavioral theory offered by the business management department. As defined here by Jacob Jacoby, “consumer behavior is decision-making units.”2 If you read it once more you’ll find that it is, logically, a tautology. Saying that consumer behavior = the totality of consumer’s decision-making is no different than saying steamed rice = the combination of rice and water, except it adds the discussion of goods, service, activity, and the acquisition, consumption, and disposition of ideas to emphasize that consumer behavior is a business action. Currently, the American Marketing Association (AMA) defines consumer behavior as “the dynamic interaction of affect and cognition, behavior, and the environment by which human beings conduct the exchange aspects of their lives.”3 Affect, cognition, and behavior represent the human mind and environment means living conditions. At a glimpse it looks as if it considers the various psychological characteristics that the consumer exhibits in a transaction, but it is difficult to know what this refers to.

Business management does not know the consumer’s mind The American Marketing Association left something out when defining consumer behavior: they did not distinguish between the consumer and the corporation—subjects that have to act differently when it comes to the situation of consumption. They seemed to consider the individual consumer because of the attributes that comprise the field of business management, but they only saw the

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consumer from the perspective of the corporation that has to provide goods and services. In order to show a clearer picture of consumer behavior, it should be defined as the following: Business continues to exist by arousing and maintaining the interest of the consumer. From a corporate perspective, consumer behavior is for marketing strategy (market segmentation, targeting, marketing mix). And if it is about satisfying the needs and wants of the customer—all of it regardless of what it is—all knowledge regarding consumer behavior is helpful for all areas.4 Consumer behavior and consumer psychology is different from the observation of ordinary human behavior and psychology. This is because consumption is an activity that satisfies desire. Who tries to satisfy one’s desire? It is easy to think it is the individual consumer. However, in the process of satisfying desire related to consumption there is a producer that provides the goods or services and a supplier. In business activity, there are individual consumers, and corporations that function as providers or suppliers. They could be distinct groups but actually they are all consumers with different desires. However, consumer behavior and consumer psychology is each defined differently depending on which perspective it is viewed from. Looking at consumption as an act of making a monetary payment for goods or services is the corporate perspective. It focuses on the aspect of the business that has been fulfilled by someone instead of the the human consumer himself. When researching consumer behavior from this perspective, the topic usually becomes market segmentation, targeting, and marketing mix. The subject of action becomes the corporation and the object is always the consumer. On the other hand, looking at consumer behavior and psychology from an individual instead of a corporate perspective, it is an individual trying to know the psychology and behavior of satisfying one’s desire. The consumer’s behavior is influenced by internal factors, external factors, and the process of decision-making. Internal factors include motive, perception, cognition, learning, self-image, lifestyle, and so on; external factors include both cultural and societal ones. External factors usually borrow the conceptual framework of sociology or cultural anthropology and researches social class, race, family, culture, and so on. Finally, the process of decision-making is comprised of the actual process of consumers consuming. The subjects are problem recognition, information search, alternative assessment, and choices. Consumer psychology seems to be more concerned with internal factors affecting the decision-making process.

The investigation of consumer behavior in consumer psychology Corporations and the individual are different subjects in consumer psychology. Accordingly, their desires and goals are different. Therefore, what we need to investigate is how to link the interests of different players in these different domains. We need to figure out the intersection between corporate and individual interest.

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Business seeks consumer behavior and psychology to properly identify their market, target them and utilize the marketing mix. However, consumers are not interested in the likes of corporate marketing strategy.What is important to them is,“How can I satisfy my desires in the most rational way and what is the best quality of service I can receive?” Thus, if a corporation wants to command a decent marketing strategy, it needs to understand its individual consumers’ diverse desires above all else. It means that corporations need to know exactly how their desire develops and how they want to satisfy their desires. Consumer behavior theory, as it is introduced to us, looks as if it is a practical subject that is dealt with in business management. This is because it integrates economics, psychology, sociology, and cultural anthropology in order to explain the consumer behavior that corporations are interested in. Particularly, it only contains the consumer behavior and psychology that circulate in American society, so it is difficult to relate it to consumer behavior in Korean society. There is almost no content on Korean consumer sentiment, on Korean behavior and psychology. This commonly occurs in a country like Korea that imports its academics. No wonder it is unclear what the problem of consumer practice and the core of the matter is. It appears to combine all of the results from different research areas under one theme, but it fails to clearly resolve the actual problem and the research objective. It is in this vein I argue for considering the consumer’s behavior and psychology first. There will only be more unnecessary knots if we cannot find the intersection between the corporation and the individual, and desire and satisfaction. But there is a way. First of all, we need to look carefully for the phenomenon that best shows the characteristics of consumer psychology, or consumer behavior, and then treat each consumer’s mind individually. Then we need to understand how the market segmentation, targeting, and marketing mix that companies want to develop is based on the analysis of the research results.

The fish that saved the farmer Aspen wrestled with consumer behavior theory for a semester. He became worried when the professor gave him the final paper assignment “to select an item and analyze the consumer’s behavior based on what has been taught during the semester.” He could write something simple like his other friends who selected smartphones or cars as their subjects, but he did not want to. As long as he decided to pursue the path of a professional event coordinator, he wanted to become a marketer who could promote a product while simultaneously capturing people’s minds. It was important to convert the public’s event participation into a purchase, by whatever means. Only then would companies request them for their next event, and he would improve his performance as well. It was obvious. After much thought, Aspen came up with the marketing idea of connecting the vibrant regional festivals with the specialty products from the area. He decided to write a paper with the title “The Fish that saved the Farmer—Pa Ro Lake Trout Festival and Vitalization of Hwachun, Agricultural Products Sales Up.” Aspen scanned his

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lecture notes again before gathering research data. He thought of replacing “corporate objective and consumer behavior” with “Pa Ro Lake Festival’s Tourist Inducement and Tourists’ Behavior Pattern and Outcome.” However, it wasn’t clear what to do. The consumer psychology lecture that business management teaches deals mainly with the individual consumer’s internal factors and decision-making, and the individual’s external factors. The themes also include things like motive, perception, cognition, learning, self-image, lifestyle, problem recognition, information search, alternative assessment, choice, and so on. What is surprising is that Introduction to Psychology deals with the same themes. The content of books titled Consumer Psychology or Consumer Behavior Theory appeared to dress the contents of Introduction to Psychology with the wrappings of consumption. Books published under the titles of Consumer Psychology or Consumer Behavior Theory show this situation very well. These books claim to treat the consumer’s psychology and focus especially on the market segmentation, targeting, and marketing mix that companies want, but the actual content is more at the level of explaining the various concepts introduced in Psychology 101. It is hard to find material that discusses what kind of people and what kind of psychology and behavior causes the consumption phenomena we experience in everyday life. They simply add a few examples relating to marketing, introduce products and services and add a few sociological and cultural anthropological materials to the various concepts introduced in the Psychology 101 textbook. There is no material on consumer behavior and psychology in a specific cultural context. It is just as foreign as an imported product. It was necessary to investigate the consumer psychology and consumer behavior of people’s lives in actual society.

Building a real house with wood and bricks Does knowing jargon and scholars related to psychology make it possible to solve problems related to the human mind? Of course not. It is like seeking hot water under cold ice. It is like handing wood and bricks to a person trying to build a house (Figure 1.9). What is actually needed in building a house is the skill to build a house. The knowledge gained from psychology is mere wood and bricks. The fragmentary knowledge gained from school lectures or books is not only impractical for use, but also it is not helpful in culturing some skill or ability to solve the problems of everyday life. It does not solve the problems of friends and family, either. All it is good for is getting a good grade on a test. The application of psychological knowledge to various problems related to consumption and marketing is a similar situation. Learning elementary knowledge from Introduction to Psychology and utilizing this knowledge to investigate issues related to consumption is an entirely different matter. However, the consumer and consumer psychology taught in universities convey knowledge at the wood and brick level. It is as if students only learn to distinguish wood from brick; as if anyone can build a house if they’re given the material; as if knowing some psychological vocabulary,

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Psychology in the marketplace

FIGURE 1.9

I have wood and bricks … but I really need to know how to build a house!

theory, or concepts will enable one to know the consumer’s behavior and mind. But it does not solve the various questions that occur in the field of marketing. Consumer behavior is not a subject that wraps up psychological theory with marketing concepts. What is really needed is to understand the consumer behavior that occurs in a social context and its related issues. The difference is like that between the knowledge and skill required to build a house. It’s necessary to master those concepts in consumer psychology, but those concepts have to be applied to solve the problems in context. The consumer-behavior knowledge founded on psychology is not sufficient to apply to market segmentation, targeting, and marketing mix. Although wood and bricks are important materials, they cannot be a house. It is necessary to secure the skills to build a great house using wood and bricks. Learning psychological vocabulary with a consumer connotation does not solve the problems of consumer marketing.

Is psychology needed for good marketing? Aspen also acknowledged the feasibility of the statement that psychology is needed to do marketing well. However, he realized that in both business management and psychology the only thing taught is the building blocks of wood and brick and not the actual way to build a house using those blocks. It’s simply an illusion in which we are confused by knowing a few examples of consumer behavior as equal to consumer psychology. Just as every company has different objectives

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and expectations, the consumer’s desires and feedback differs. In order to succeed in marketing, receive good feedback from the customer and for the brand to become a love mark, companies need to be certain of the intersection between what the company wants and what the consumer wants. This way a company can gradually expand the intersecting area. Aspen paid attention to this part while writing a paper on consumer behavior theory. The Hwachun area—the company—failed to read the mind of the consumers—the tourists thinking of going to Pa Ro Lake at dawn—by only focusing on the product—trout—that they have put out in the market. So they lost tourists to the neighboring city of Choonchun—devastating for the county residents. However, there is a solution.The intersection between the tourists’ desire to come to Hwachun county and the desire to come to the Pa Ro Lake festival just needs to be expanded. It is the place where Hwachun’s slow, environment-friendly agricultural products and the urbanite’s desire for nature meets. He’s now busy finishing his paper.

Case studies: new insights for consumer psychology research Each individual in specific living conditions exhibits different consumer behavior in order to solve consumption-related problems. Companies utilize data related to consumer psychology and consumer behavior for market segmentation, targeting, and marketing mix. However, understanding the various concepts related to the human mind and behavior does not help. What is important is knowing who the person doing the specific act of consumption is. Case studies are a learning method that originates from the awareness that although organization management occurs in each segmented and specialized area in a group, the organization’s problem cannot be grasped just by using the sum total of each area’s result data. Using case studies caused a sensation in America after the 1970s. Experts tried to find what kind of problems organizations confronted through specific examples of corporate management and how to resolve those issues. The reason business management introduced case studies is simple.The various materials taught and learned at business schools did not have any practical merit in corporate management. The case study method approaches the core of what happens in corporate management. It provides new insights into consumer psychology research. Explanation of consumer behavior or psychology should revolve around specific consumer behavior instead of psychological process or factors. It means consumer behavior should be understood by case studies of each individual that exhibits diverse consumer behavior. Learning psychological knowledge and knowing each individual person are entirely different matters. However, in the Republic of Korea, these two matters are sometimes confused, which is one of the main tasks that needs to be solved in psychology today. It is hard to know each different person that I encounter even if I know various concepts related to the human mind. A psychological study that claims to teach how to build a house, but in actuality only makes one collect wood and bricks does not help in solving the problems people encounter. A house comes into shape and becomes complete only after polishing the wood and

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stacking the bricks one by one. In order to understand consumer behavior and psychology, there needs to be case studies directly involved in that problem.

Who am I? Consumer psychology reasoning (induction, deduction, abduction) What can we know or assume from the following behavior? What kind of person is this?

Case 1 Wake up on hearing the alarm of the smartphone. Exercise briefly wearing a sweatsuit. Shower with soap and wash hair with shampoo. Dry off using a towel. Clean teeth with brush and toothpaste. Finish washing up with an aftershave or skin lotion. Drink a cup of coffee. Put on underwear, jeans, and a shirt. Open a word-processing program to finish a report and print using a printer. Put notebook in a backpack, put on a jacket, and head out. These are ordinary activities everyone does. The order could be different, but it is typically the same. However, it is not easy to predict who he is or what kind of person he is just from this activity. From knowing he uses a notebook and backpack, we can suppose that it is someone young. We can think it is someone who is relatively meticulous and prepared since he checks his report again in the morning and then prints it out. It is someone who has to be on time since he wakes up hearing the alarm. It is also someone who is mindful of his health since he works out in the morning.

Case 2 Wake up on hearing the iPhone alarm. Wear an Adidas sweatsuit and work out briefly on a NordicTrack running machine. Shower using Lush soap and wash hair using Aveda shampoo. Dry off using a Chanel towel. Brush teeth using Propolis toothpaste and an Oral B toothbrush. After washing apply Polo aftershave or toner. Put on Calvin Klein underwear, Polo shirt, and Diesel jeans. Grind Starbucks coffee beans and make a cup of hand-drip coffee. Run PowerPoint program to finish a report and print using Samsung printer. Put a Moleskine notebook in the backpack, find the Moncler padded jacket, and head out.

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It is possible to deduce clearly in Case 1 that he is relatively young, meticulous, and diligent from his various actions, such as waking up with the alarm, working out briefly, drinking coffee, and finishing the report. However, in Case 2, those characteristics do not stand out. A logical deduction about that person is hard to make. What is the reason that we cannot see him as he is? Precisely because everything is product information: iPhone, Adidas sweatsuit, NordicTrack running machine, Lush soap, Aveda shampoo, Chanel towel, Propolis toothpaste, Oral B toothbrush, Polo aftershave, Calvin Klein underwear, Polo shirt, Diesel jeans, Starbucks coffee beans, Moleskine notebook, Moncler jacket—they all seem to be as powerful as the personality. Looking at the brands, the subject of Case 2 seems financially well off. It is possible to not only judge his living standard but also his position in human relationships. It may be that in his society economic prosperity is thought to show a person’s social level. However, the brand information distracts from understanding what kind of person this person is. Deduction is not easy. A picture of what type of person he is can be glimpsed, but it is hard to confirm his real self. If the person in Case 1 feels different from the person in Case 2, you are close to the first level of consumer psychology. In order to advance another level, you need to grasp the person’s mind. Let’s think. Which person stands out more? Most people will choose Case 2 over Case 1. If you want to focus on consumer psychology to grasp who he is instead of focusing on the product, it is necessary to pay attention to the consumer behavior of how he is consuming the product (brand).

Sherlock Holmes’ deduction: figuring out the mind in consumer psychology The following is my reconstruction of a scene from Conan Doyle’s novel, The Sign of Four, where Watson is testing Holmes’ powers of deduction. This is a case where a logical inference is applied. It is not much different from the deduction we have just made. WATSON: There

is a watch here that somehow got into my hands. Can you explain what person had this watch until now?

HOLMES: It

was someone who had a messy habit. He was untidy, careless … he received a sizable sum of inheritance, but he lost it all and lived poor for a long time. At times large sums of money came in, but he couldn’t escape poverty and lived drenched in alcohol.

WATSON: How

remarkable. Everything you said was correct without a single error. How did you know?

HOLMES: Really?

It was good luck. Actually, I didn’t think of getting it exactly right from the beginning. I just said what was most likely.

WATSON:You

didn’t just guess, did you?

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Psychology in the marketplace HOLMES: Of

course, it is not a guess. A guess is the most fatal component in logical thinking. Although it may seem strange to you, that is because you cannot follow my logical train of thought, or you cannot see the small facts that support my deduction. Look closely at the bottom of the watch’s case. Then, you’ll see two dents that have sunken in. And you’ll also see the scratches all over the watch’s case.These scratches mean that something hard, like coins or keys, had been carried in the same pocket as the watch. If this fact can be confirmed, then it is not that hard to deduce that the man who didn’t take good care of an expensive, 50-guinea watch is someone who is careless. And if he were able to receive this watch as part of his inheritance, then he would have received other inheritance as well.5

I shop, therefore I am I shop therefore I am is the 1987 artwork of Barbara Kruger, a female artist whose work represents America’s postmodernism (Figure 1.10). The phrase printed in red against the black and white background borrows the philosopher Descartes’ famous proposition “Cogito ergo sum,” I think, therefore I am. It well reflects modern society’s image of showing oneself through consumption. Descartes’ proposition made it possible for Westerners to equate their existence with their mind. In the past, even the mind was God’s domain, but human intellect was separated from God by Descartes.This is the greatest insight into human nature. “I shop, therefore I am” is the recognition of another human nature that appears in a consumer society. “I shop, therefore I am” means people can show themselves as individual human beings through shopping. Shopping behavior can finally reveal the individual, rather than a universal, normal, or average person. In this way, we can know the person through how they shop in a consumer society.

FIGURE 1.10

Barbara Kruger, Untitled (I shop therefore I am), 1987

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Consumers’ behavior occurs as a combination of human desire, emotion, thinking, and action.What we commonly know as the area that most typically shows the combination of emotion and reason is consumer behavior. Let’s consider the current no-pants fashion trend (Figure 1.11). What kind of psychology is hidden behind the action of people who participate in this trend? People put forth various interpretations of women’s no-pants fashion, such as to show their sex appeal, to entice the opposite sex, or to show off their bodies. However, if you ask women who are walking around in no-pants fashion why they wear this kind of clothes, some of their answers are different from people’s predictions. As well as saying, “It shows my slim body,” they say, “just because I want to,”or “because it is the trend.” Maybe there is no special reason at all. It means that from a third-person perspective it is possible to ascribe a relatively plausible reason, but for the person who is doing the action it could be a behavior they show from time to time according to the particular circumstance. Let’s say we are talking about cars. For some, Morning, Hyundai’s compact car, is the most ideal and typical car in Korea. However, for others, only a Mercedes-Benz or BMW can be considered a “real” car. For them, the Morning looks like a cute and funny car.The investigation into consumer psychology looks at how these differing opinions appear among different people and why each person views an identical object differently.

FIGURE 1.11

Don’t ask us why! Women’s no-pants look

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Consumer behavioral attributes are different from average human behavior. The characteristic one person shows isn’t shown by another. There are as many minds as there are behaviors. However, in one person’s actions that person’s inherent/distinct psychology is hidden. For example, there is someone who normally saves money but spends money unsparingly when there is something she wants to buy. She is someone who tries to save on bus or subway fares, but when buying an audio set or new computer she likes, there is no hesitation. She grabs a bite to eat for lunch—a bagel or a line of Kimbap (rice roll)—but she pays double the price of her lunch for the coffee she drinks after her meal. She doesn’t buy clothes that often, but she often buys unique bags that satisfy her taste. Whatever others say, she gladly buys expensive handmade figures, boxes, and unique notebooks and stationery. She decides on a purchase based on whether it attracts her and whether it reflects her taste well, instead of on price or practicality. There are many who buy their favorite author’s book whether they read it or not, buy luxury brand items like Louis Vuitton or Gucci after saving up several monthly paychecks, who save frugally to go to New York and tour the hotels and restaurants in Sex and the City and watch Broadway musicals at night. Of course, one person probably doesn’t do everything listed above.The majority of people do not behave like this. However, some people do this at least once. An exploration of consumer psychology is interested in how each different person satisfies their desire from a personal perspective, using their own method. It is investigating consumer psychology from a human-centered perspective, which is on an entirely different level than simply asking how to interpret people’s actions and psychology in order to sell a particular product well. We can feel as if we know this person well through a list of possessions midsized apartment in downtown Seoul, imported car, a job in a research laboratory, Burberry coat, Apple MacBook, iPhone, espresso machine, running machine, two-door fridge, water purifier, bicycle, a collection of approximately 10,000 books …. I hope you won’t mistake the owner of this list as the writer. I have neither water filter nor bicycle. The books I have are far fewer than 10,000. Then who is it? Actually, I don’t know. It’s only possible to know that this person lives a relatively well-off life in Seoul and that this person will be seen as intelligent, sophisticated, and active. It could be a real person or the ideal future self many college students dream of being. It is possible that this list includes what somebody wants to possess as well as what they already have. From reality to ideal, everything I have (or want) shows who I am. You can see it as an expansion of the self. As such, consumption reflects one’s current existence as well as one’s ideal self. Ultimately, consumption is an important means of showing myself to others and revealing what kind of person I am. When I look around as I pass along the street, I sometimes see college students with designer purses. Korean people’s love of designer goods is so peculiar that there is a popular phrase, “brand-name ache.” One expert points to the national character to explain Korea’s brand-name-consumption phenomenon. However, it is not possible for the national character to intervene when it comes to purchasing

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a product. There is only the psychological issue of how individuals show themselves through consumption, or individuals’ expectations of how other people will view them. Calling luxury goods masterpieces and ascribing great meaning to them is a clear example of how much value Korean society places on money. Of course, consumption is linked with money. This is why consumer psychology is linked to what people consider important and how they live. How one uses limited capital and with what kind of priority, shows what the self values and considers important. This is a consumer psychology different from the consumer psychology dealt with in business management. That is, it is a psychological consumer sentiment that focuses on the person who is consuming.

Notes 1 2 3 4 5

William James, The Principles of Psychology, Vol. 1, Chapter 10 http://psychclassics. yorku.ca/James/Principles/prin10.htm http://www.academia.edu/6078770/CONSUMER_BEHAVIOR_and_MARKETING_ STRATEGY_CONSUMER_BEHAVIOR_and_MARKETING_STRATEGY ibid. ibid. Prifiling, Innes Brian, Human&Books, 2005.

2 STEAL MY HEART!

The Princess and the Moon A princess caught a serious illness.All medicine proved useless. Great doctors, experts, and even the greatest shamans came running to examine her illness, but no one knew what it was or how to treat it. The king’s concern deepened day by day. One day the court jester asked the king what he thought of asking the princess if she had a last wish, since she was in a critical condition and no one seemed to be able to treat her illness. He asked to meet her just once since she may at least feel a little better if he told her a funny story.Wouldn’t it be a good thing if the jester could give joy to the princess who was lying still and waiting to die? The king expressed his approval, “I will accept your request so try wholeheartedly to comfort the princess.” The jester met the princess and asked her why she was hurting and how serious it was. The princess replied, “I got sick because I wanted the moon but I couldn’t have it.That desire was something that couldn’t be fulfilled. Now I just have to wait to die. It is better to die if I can’t have the moon.”The jester asked the princess, “Do you think you’ll get better if someone could get the moon for you?” The princess said, “Since it is an illness that I got from not having the moon, I believe I’ll only get better if I can have the moon!” Her eyes brimming with tears, she added,“Many people came to examine my sickness and asked this and that, but no one asked me why I got sick. But you specifically asked that, so I’m grateful. I tried telling the Court’s main doctor that I feel like I could get better if I could only have the moon, but it was no use. He acted like he didn’t hear it.” The jester went straight to the king and told him all the details.The king wanted to grant his beloved daughter’s wish so he issued an order to all the courtiers, “Bring me the moon!” But everyone shook their heads. They bowed, saying unanimously that they could not bring the moon. Scientists explained one by one how far away the moon was, how heavy the moon was, and how many million times

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bigger the moon was compared to the kingdom.Various reasons were given, but the conclusion was consistent: it was impossible to bring the moon to the kingdom. The king’s concern worsened. The princess’ illness could be improved if the moon could be brought, but no one could bring the moon! Then the jester came forward again. “Dear king, when no one knew what the princess’ sickness was the princess herself explained calmly and clearly what her disease is and why it happened. If bringing the moon was an impossible task, the princess might not have wanted it from the beginning. However, the princess truly wants the moon. Then, how about asking the princess how to bring the moon?” The king thought the jester’s words made sense. If it was an impossible task, then she might not have wanted it so earnestly. The princess really seemed to believe it was possible to have the moon. The king asked the jester to meet the princess once more. The jester ran to the princess and asked her, “What kind of moon do you want, princess?” The princess answered that she wanted the moon in the sky, the moon in the lake. She wanted it so much that she went up on the roof of the royal palace, but she could not get the moon. She longed for it so much that she went directly into the lake, but it was also useless. And she longed for the moon, looking at it every night until she gave up everything and was slowly dying. The jester heard her desperate desire to have the moon and asked the princess again, “Princess, it must be really hard. Now I will bring the moon that you want. But princess, how big is the moon you want?” The princess laughed for the first time in a while on hearing the jester’s question. “How ignorant you are! Try covering the moon high up in the sky with your finger. The moon I saw could be covered by my thumb. The moon in the sky and the lake!” The jester, looking at the princess’ smiling face, asked again, “What is the moon you want made of?” The princess looked at the jester as if he were pathetic and replied, “Jester, you really do not have any interest in the pretty moon, do you? The moon is yellow and it glitters.You don’t know what it is made of even after looking at it? Oh dear! What else could it be other than gold?” The jester replied, “Oh, so it is! The moon that you want is made of gold the size of a thumbnail!” The jester could paint a picture in his head immediately. The moon the princess wanted was a round thumbnail-sized item made of gold. The jester asked the princess for the last time, “Princess, where would you use that glittering moon?”The princess stared blankly at the jester with a sullen face that said she really couldn’t understand him. Then she replied, “I’m going to wear it on my neck. Wouldn’t it look so pretty?” After a few days, the princess was given a gold necklace the size of a thumbnail to wear around her neck. The princess stood up in joy when she got what she wanted and she recovered fully.

Princess’ moon, courtiers’ moon The story of The Princess and the Moon is an appropriate example of different agents with different thoughts. Here the important thing is each of the different thoughts of the princess and the courtiers. Let’s follow their thoughts. The first

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different thought—the beginning of the affair—was the princess wanting the moon. The moon that lights up the night sky, the moon that shines brilliantly. It is beautiful enough for the princess to covet. For her, the desire is to possess the moon. However, the doctors and scientists who hear the princess’ wish shake their head from side to side because for them the moon is fact and science. So the courtiers shake their head first under the premise that the moon is something that cannot be had. Far from trying to solve the problem, they emphasize the idea that the moon cannot be had. They have a different starting point from the princess who thinks the moon can be had. If she thought it could not be had then she wouldn’t have coveted the moon so much. The second different thought. The princess’ mind first becomes focused on the moon that she wants, then she gradually becomes absorbed by her desire to have the moon. On the other hand, the kingdom’s doctor and scientists still focus on the moon up in the sky instead of the princess’ mind that wants the moon.They ignore her desire. They are too busy scientifically analyzing what the moon is, what the cause of the illness is, and how to treat it. They are so busy focusing on these thoughts that they cannot think of trying to find out who the person with the illness is and what kind of moon the person wanting the moon is. Even though it isn’t a problem of who’s right or wrong, but a problem of who wants what, who tries to satisfy what kind of desire, and how they solve that after they know what it is! The princess’ and the courtiers’ thoughts that differed from the start continued to run parallel to each other, which could only end in different results. The Princess and the Moon fairy tale informs us what the consumer truly desires. It also tells us the truth that companies need the wisdom to look from the consumer’s perspective if they want to find out what the consumer really wants. Consumers usually pay money according to the amount of their desire. Companies call this the consumer’s willingness to pay. From a consumer perspective, if an item is too expensive it means the amount needed to pay for the item is greater than one’s desire. So at times the consumer feels it is unfair to pay X for something when they already expect it to cost approximately X according to the satisfaction it is expected to give. From an objective perspective it may be an X amount of desire, but in that person’s mind they still think of it as X-. On the other hand, another consumer thought they would have to pay X+ to get it, but find out it will cost only X so they think of it as a windfall. It is a subjective and relative reaction. Likewise, people’s intensity of desire for something can differ even when the item is identical. It is a moment of realization that consumer psychology exists; that it does not simply speak of buying products with money. Knowing consumer psychology is knowing how each individual expresses their desire and satisfies it, and how each person is different. In The Princess and the Moon, it could be said that the story is a case of an extreme representation of consumer psychology since the princess longs so badly for the moon that she falls ill. Consumption is an act that satisfies the self ’s desire. Corporations develop new products and services exactly to stimulate this kind of individual desire. They do business through the consumer’s desire to possess and the consumption that satisfies

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that desire. This is the reason consumer psychology is evaluated differently from normal psychology. Consumer psychology is about studying how two different agents, the individual and the corporation, satisfy their desires. That is, it is an area that deals with the consumer who consumes and the companies that expect consumption. If, from a consumer perspective, it is a process of satisfying one’s desire, then from a company’s perspective it is the task of finding out how to satisfy the individual consumer’s desire. The products and services companies offer are one of the various ways of satisfying these desires. Accordingly, in the flood of mass produced goods and various services, stimulating the consumer’s consumer psychology and taking a hold of the consumer’s heart is the critical factor in the survival of businesses. From an individual consumer perspective it is a matter of showing one’s desire, and from the company’s perspective it is a matter of producing products and services. Consumer psychology helps accomplish this type of work. It is also the positive result that the jester achieved when he studied the moon that the princess wanted.

Please, sell me a lot! World War I changed the mindset and values of the time. The mind research that Freud introduced, the idea to treat sickness of the mind, was accepted by many as another way to understand humans affected by the war. In addition, people’s lifestyles changed rapidly. People’s change of heart and behavior was clearly observed in their consumption. With postwar America at the center, new industries revived and the production rate rapidly increased. It was important to sell what had been made rather than producing more goods. A new era dawned. The phrase marketing was first introduced and the phrase consumer psychology also appeared. From the company’s perspective, the need to know what the consumer really wanted and desired increased. In the middle of this phenomenon was the automobile. At the beginning of the 1900s, the global automobile industry was led by two prominent companies, Ford and General Motors (GM). Henry Ford, the creator of Ford Motors, invented the Model-T, which was revolutionary at the time (Figure 2.1), under the resolve that he wanted to make a world where more people drove an automobile. He became remembered as the person who first spread the concept that the public consumes products. Assembly-line production using the conveyor belt was a revolution. The price of automobiles dropped and they were no longer considered to be luxury goods but rather a necessity of everyday life. It was thanks to the arrival of the age of mass production. In 1908, the price of a car was US$850, which at that time was half a year’s pay for the average worker. However, people were able to buy a car without paying such a significant amount after Ford improved the factory to a mass production system. From then on, the automobile transformed into a product that the public could readily consume and not remain the exclusive property of the minority. Entering the 1930s, people’s income increased and automobile prices dropped even more (Figure 2.2). Thanks to that more people could buy cars. People’s appetite for

FIGURE 2.1

The pioneer of public consumer products, Ford’s Model-T (a)

(b)

(c)

FIGURE 2.2 The most popular cars in 1930s US were GM’s Pontiac (a) and Cadillac (b, c)

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cars also became more diverse. GM released different brands in each price category based on the consumer’s diverse appetite. The familiar brands Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac, and so on were born at that time. GM satisfied the needs of the consumers by market segmentation by price. The popularization of automobiles had started. It was not just cars. The public wanted more and more and they started to select what they wanted and consumed it. As people were able to fund their desires, companies began to provide diverse products and services to satisfy those desires. Companies carefully considered not only the issue of how to win the consumer’s mind, but which marketing method to use to convey the products and services that would win the individual consumers’ heart. As a result the domain of consumer psychology rapidly evolved. It went beyond trying to know the consumer’s desire and paid attention to what the company, as principal agent, also wanted. Therefore, companies had to consider not only the development of new products and services to win the minds of consumers, but also how to sell these items more effectively. They needed a “marketing strategy.” A product wasn’t something simply to be produced, it was something that needed to be sold.

We buy real experiences There was a time when marketing was unnecessary, when goods were rare. At that time people could satisfy their desire by having what was available because having something was enough. Stories of having nothing to sell and of “hunger being the best sauce” speak to that. It was not a situation where one could pick and choose this or that. So people lined up as goods became available. Once products were produced they sold well no matter what. We call a period like this the era of “product concept.” However, people gradually began to contemplate which product to buy of the many products available instead of worrying over the lack of products. This was because of the outpouring of diverse products and competition between similar brands due to the increased production capacity and active trade. The public began to think more about the price and what was affordable before buying. Companies were forced to take on the task of how to sell more product. We call the price-centered period, when more people look for more affordable items, the age of the “selling concept.” This means that in this era a good product is something more affordable if it is a similar item. Let’s use that it item, the smartphone that everyone wants, as an example. The iPhone that you use is designed in California, United States, produced in China and imported and sold by different countries. Another major trend, the Galaxy series, is produced in Korea by Samsung Electronics. Workers from at least two or three countries have to provide their labor. It is a good example of the wave of globalization, global cooperation, the abolition of tariff barriers, and the activation of international trade. This kind of phenomenon shows us that satisfying our desires through purchases in our daily life is not limited to a particular area or country. Let’s say we bought a cell phone: whether an iPhone or a Galaxy, the agony of choice

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continues. Whichever smartphone is chosen there are at least two or three carriers that offer you their service.There is no big difference in the service, the product, or the price. In this case, what should we do? The public carefully considers even a little difference in price. They also closely scrutinize the service contract of each carrier before making their choice. There may be cases where they choose their previous carrier because they have used it before and they liked that carrier’s service, or because it is too bothersome to change to a new carrier even though they know it may be a little more expensive. Or there will be some consumers who think,“let’s change it this time since it wasn’t that great up to now.” The consumer’s preference differs like this. Of course, reaction and choice differ as well. No, it would be better to say that the consumer’s options became more diverse. Now consumers follow their hearts. If the quality of the service is the same, they do not react so sensitively to the price. It is not possible to capture the consumer’s heart just by advertising that the product is good and the price cheap. The market has changed from a product concept era to a “marketing concept” era with consumption at its center. In an era of marketing concept the most distinctly highlighted words are that companies need to agonize over what the consumer truly wants. It is an informative comment that shows it is the age of marketing. Apple, whose consumers line up in front of its stores every time a new model is released, is such a case. Apple’s new products show well how the age of marketing has materialized in our daily lives. How does the consumer feel about the purchase of a new iPhone or a justreleased iPad? They do not think, “All I did was change my cell phone!” They did not buy a new product, they bought a new experience. Perhaps it is like meeting someone new. They are able to have something special that stole their hearts instead of something just produced from a factory.

I have the right to consume/purchase for me Kyle Jang is the manager of a leading telecommunication company’s advertisement marketing management team. Recently, he has been getting a splitting headache. He has to come up with a new advertisement for TV, but he is unsure about what concept to choose. At least until the beginning of early 2000s, the target for most products was clear. In the days when it was a playground of products and services of the same sort, simply adding a little class and suggestion of uniqueness to a product made it more attractive and fairly easy to sell. Advertisers all used a similar approach. However, things are different now, it is not possible to release something without being classy and unique. It is a challenge to keep pace with the consumer’s heart that changes at the speed of light. And there is much diversity in consumer classes. It is necessary to know exactly who your customer is in order to make a bid for victory! It is not good enough to think that the consumer is just general people who often use our company’s products and services, without a specific aim. Kyle eventually decided to research who “fits” his company’s products and services. Who is the consumer that wants it more? What kind of

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consumers are willing to pay for their products and services? It is only possible to engage in successful sales activity, marketing strategy, and advertising by knowing each consumer group’s desire. The essential content that Kyle is agonizing over is called market segmentation. Although it is expressed as market segmentation, the real target of investigation is the consumer’s mind. Therefore, it should be called consumer segmentation. We distinguish each consumer who selects a different product by the consumer’s characteristics. The average consumer segmentation follows the characteristics of population distribution. It divides individual consumers by social features, such as age, sex, and residence. However, this kind of classification is only sociodemographic segmentation. There is a problem because this is not consumer segmentation that investigates each consumer’s mind, an individual’s characteristics are ignored. Let’s say manager Kyle establishes an advertising strategy for a product based on the common principle of market segmentation. He will develop a different market advertising method according to age, sex, and area and come up with a strategy for each category. However, one question he couldn’t solve bothers him. He has sometimes witnessed the differentiation by sex, age, and area as insignificant. His senior who works in a foreign company office is a case in point. The senior is in what is known as the golden middle age, wears trendy clothes, and is an early adopter. The senior has two children and that senior is a woman. Her residence is in Kyeong-Ki-Do, Paju not Seoul. She is a career woman who commutes back and forth from home to work for two and a half hours a day. She could not be a target according to the categories of age, sex, or business area because her way of thinking, behavior and lifestyle is far ahead of people in their twenties and thirties. How should people like this be categorized? Which target area could they be in?

Targeting: for what, by whom? Targeting means developing and providing products or services for a particular group of consumers. From a company perspective it means taking consumers as objects for business. In order to target consumers effectively, it is necessary to know how each individual consumer tries to satisfy his or her desires. It is also necessary to grasp what an individual prioritizes when trying to satisfy these desires. Of course, it is essential to know how much can be paid for this desire as well. It is necessary to know whether there is a willingness to pay. From the company’s perspective, all of these activities are looking at the consumer. From the consumer’s perspective, these activities are called target marketing or positioning. Of course, general consumers do not think much about this, nor do they worry over it. Let’s think about it again from the individual consumer’s perspective. It is not trivial to think about how important a particular product or service is in one’s life and how one prioritizes one’s values in life. How much one is willing to pay in order to satisfy a desire is something that is an expression of self above all else. The consumer and marketing research done from a company’s perspective comprehend

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the individual consumer’s thoughts by establishing an interconnection with the company’s needs. It seems like the same work, but the content differs depending on whether it reflects the company’s perspective or the perspective of the individual who consumes. The targeting discussed in consumer psychology and consumer behavior is the problem in the tale of The Princess and the Moon, where the moon changed depending on who saw it.

What is the marketing mix? If targeting is conforming the company’s products or services to each different consumer group’s needs, then the marketing mix is a marketing strategy that the company utilizes to best advertise its products or services to the customers. Key factors are the 4Ps of marketing: price, product, place, and promotion. Normally, it is said that how well the marketing is done is dependent upon how these four factors are combined. It is argued that marketing success is dependent on what products or services are sold at which price, where they are sold and how they are promoted. Samsung Electronics, in order to compete with the iPad, released the lighter Galaxy Tab as its tablet PC. They priced it competitively, and they executed promotions in the best shopping places, in cutting-edge areas that included not only Seoul, but also New York and London, and used various advertising media. As such, could it be said that the Galaxy Tab marketing was well executed? We do not know the result. We can only say that if this kind of marketing mix strategy was employed, it was a typical marketing activity that ignores who the consumer is. Marketing strategies and marketing mixes that discuss the 4Ps without an aim have no relation with the person who consumes. They only talk about what seem like the best conditions. The following is an article reported in the Korean media relating to the Galaxy Tab. Let’s think about what kind of situation this marketing activity is from the 4P perspective. Use of the 4Ps could be an important factor related to marketing from a company perspective, but there are many cases where there is no way to check if it is an important factor related to the consumer’s mind or behavior. This article is an example: Samsung Electronics are extremely anxious over a tablet PC Galaxy Tab commercial an Israeli advertising agency self-produced. On the 3rd, the Israeli media reported that its homeland’s cable TV company HOT released a clip of Iran’s nuclear facility being bombed while managing a Galaxy Tab promotion.1 The main content of the advertisement begins with four men, who have disguised themselves as women, meeting someone from Israel’s intelligence agency, Mossad, near the Iranian nuclear facility. The Mossad agent, who is watching TV using the Galaxy Tab, teaches them its various features. Then one of them accidentally touches the Galaxy Tab and the nuclear facility behind them explodes.

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Immediately after the explosion he says, “What is this? Iran’s new mystery explosion?” alluding to an explosion that had occurred the previous November in Iran. Of course, a reasonable amount of the product can be sold if the price is very cheap or the advertisement is fancy. However, what is crucial is that marketing’s 4Ps are good for nothing if a product doesn’t appeal to people.Therefore, there is a need to understand an additional P that stands for people, that is, the need to understand people. This is because consumer psychology does not consider the principal agent to be the company but rather the individual consumer. If consumer segmentation is done right, then it is possible to understand clearly the market and the consumer and to accurately position the product. Let’s remind ourselves of the moment the iPad came on the market. Marketers worried where to position this product. It was not enough to target students and launch it for academic use. But then advertising it for children for games sparked concerns of incompatibility. It seemed to limit the potential for market expansion, and it was obvious that each age category would have different uses and preferred functions for the product. The middle-aged would use the iPad for online transactions, to read books, or watch movies. College students would bring it into the classroom and use it to take notes. Younger students would use the iPad as a changeable, allpurpose toy. Ultimately, the iPad that came to Korea attempted something contrarian and decided to rely on an abstract propensity instead of considering the specific minority. So they said, “the moment you use the iPad a new world opens up!” Likewise, the use of an identical product changes according to the consumer and the values they prioritize. This is the reason marketers need to segment consumers based on their characteristics.

Capture diverse hearts, different minds When MP3 players and smartphones became necessities, something quietly disappeared. This was the audio recorder. Only a while back, when I was studying in the US, audio recorders were so-called must haves, a student’s necessity to replay lectures that were hard to comprehend. However, it has now been forgotten. The audio recorder we know first came out from Japan’s Sony after World War II. A hundred years ago it was discovered that sound could be recorded through Edison’s phonograph, but the recorder that could record sound on the spot was incredible in itself. However, sales of the Sony recorder were slow for a whole year after it was released on the market. It was a very wonderful and marvelous item for being able to record people’s voices, but being able to enjoy recording voices wasn’t enough to elicit purchases. Everyone wondered where it could be used, as is often the case when something new is introduced to the world. The situation was reversed not long after. It became known that the Sony recorder was a groundbreaking item for learning a new language or replaying music; that it helped not only with recording voices, but also learning and leisure. The effect was amazing.The machinery started selling like hot cakes once there was an understanding of diverse consumer behavior. The product’s function or special

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technique was not enough to capture the heart of the public. The market itself changed once it discovered how the product could be used. The successful sale of the Sony recorder is a good example that proves that an innovative function can stimulate and satisfy people’s hidden desires. Let’s look at the iPad that was released by Apple. Samsung Electronics came out with the Galaxy Tab as a competing product. What is the difference between these two? It is hard to find differences other than technical specifications.They are actually both electronic products that perform the same function with only a difference in brands. However, people’s use patterns are different. If we compare by country, then Koreans use the iPad mostly to search the Internet and take notes. However, Americans use it more for books and magazines. Similarly, the Taiwanese love reading magazines, so much so that there are stores specializing in magazines. Magazine purchases are also included in ordinary purchases. America is not much different. However, Koreans keep their distance from magazines or books.Therefore, even with the same electronic product, they show an entirely different consumer behavior from America or Taiwan. It shows that consumer minds differ even with the same product.Then how did the product developers know this mind? How did they think of various functions to satisfy the individual hearts of many?

War of stars: psychography and lifestyles Capturing the hearts of consumers is very difficult. It is more difficult than gaining the heart of the king. The king is one, but the consumer is many. It is not a big deal if one cannot gain the king’s heart, but it is a bad situation if one cannot gain the consumer’s heart.This is because consumers have a natural tendency to scream, “the king’s ear is an ass’ ear” by spreading the word around. This characteristic is why companies research consumer psychology with sparks in their eyes. One day consumers put up five-star reviews saying the product they purchased was perfect and the next day, if something goes awry, they line up to say they were deceived and that others should not purchase it. It is daring to expect stars at all. Most consumers are like that. It is not because they are malicious or ill-natured. This is because people’s desires are originally cunning and crafty. Without a doubt, consumer hearts are subjects for study. Consumer psychology research is different from conventional marketing method theory or consumer research. Most consumer research usually involves reviews made after product purchase. Marketing experts think cognitive, perceptual, and decision-making processes will influence this.They think they know the way people’s minds work and they assume they can predict the consumer’s mind. However, their investigative research stops short of confirming consumer reaction to a brand or product. Then what other ways are there? The easiest method is consumer differentiation. If consumers are separated out then the consumer mind is easily understood and it is possible to know how each group is different and similar. Even if users are college students using the same iPad, their motive, objective, and psychology differ. There are students who use the iPad as a notebook and others use it to read

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electronic books. Some may even carry it around to show off. Consumer behavior differs even if it is the same college group using the same product. If we look at the consumer behavior, these people belong in different groups. If demography categorizes groups from a demographic aspect, then psychography categorizes people based on their psychological characteristics. Psychography discusses the grounds or motives for why a certain person shows a certain behavior. That is, psychography shows the value and characteristics that emerge from one’s life, which are different from the external appearance of sex or age. Consumer psychology is not about the absolute human, but about the integrated human who changes according to a given situation. Therefore, knowing the consumer is understanding the consumer’s personality or psychology. Categorizing consumers using this standard is known as using the psychography method, as is best utilized at a crime scene. Recall the profiling technique that is applied to criminal investigations such as the FBI behavior analysis unit. What is the most well-known type of profiling in daily life? The most general example is an exploration of lifestyles.This is the work of integrating an individual’s psychography and demography to make a profile of an individual’s way of everyday life.Yet, even here there is a problem. It is easy to say that a woman’s style is avantgarde when speaking of various lifestyles, but it stops at the level of naming something appropriate for someone instead of discussing specifics. This is typical of Korean society. Strictly speaking, society does not have a defining style. There are only trends that someone follows. Even if there was a specific style, if it can’t attract someone’s attention it is likely to be buried as being frumpy. Usually, the representative lifestyles of women in their twenties are described as classic, casual, or avant-garde. Using these words is understood as knowing the lifestyles they describe. However, knowing and using a word is not equivalent to understanding the content the word describes. In order to properly understand an individual’s lifestyle, it is necessary to know that individual’s specific consumer behavior. This may be observed in specific places in Seoul, like Dong Dae Moon market, a folksy place for locals and tourists, or Myeong Dong, a downtown shopping district that leads Korean fashion.

VALS: expressing American desires A representative case of classifying consumers by psychographic criteria, that is, consumer psychological traits, and not through sex, age, or area is VALS (Values, Attitudes and Lifestyles) developed and introduced by the Stanford Research Institute.2 What Americans consider most important is not whether something is liberal or conservative but on how innovative their lives are, or how much their lives are progressing in survivor mode. Innovators are people who have high resources and high innovations in American society. In comparison, survivors are types of people who, like the phrase “survivor mode,” struggle to live. From a lifestyle aspect, in American society people who have this tendency tend to consume fast food often. The innovators and survivors are further subdivided by the specific value they aim

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for and their lifestyle attributes. They are divided into the following six types according to their available resources, innovative properties, and individual values, that is, whether one focuses on the ideals, achievements, or how one engages in self-expression. People who are called thinkers think what others do not and actualize it. People like Steve Jobs belong to this classification and college professors are usually included in the thinker type. Then what about the professors who do not earn much money? They fall into the category of believers. These are people who we usually call idealists, people who think they cannot give up what they believe. These people are compared to thinkers, but are people with relatively low resources and low income levels who maintain their strong beliefs amidst their difficult lives. The tendency to try to maintain one’s belief shows a similar disposition to that of religious fanatics or followers of a particular ideology. This is exactly the group of believers. Achievers are the consumer group who have achieved something. Usually people who have succeeded in business such as Donald Trump, Steve Jobs, and Bill Gates are the achieving type. Strivers are literally people who strive. They want to achieve something but they cannot. It could be said that you are a striver when you think you need to achieve something but you cannot. Maybe many college students live wanting to become an achiever rather than a striver. The group with an opposite attribute are the experiencers. Experiencers and makers are differentiated based on the value of self-expression. The key quality of experiencers is seeking diverse experiences. What are diverse experiences? It is the characteristic of setting a high value on experience that becomes yours and shows you well. For example, are airplane crews who have diverse experiences abroad makers or experiencers? In order to differentiate this, the extent to which one expresses one’s life in various ways and how one enjoys it needs to be checked. If there is distinct self-expression, high resources, and innovation then you could be the experiencer type, but if there is low resources or low innovation, then you could be the maker type. It is living in order to exist instead of living while expressing oneself actively. What is important is deciding which group one is included in. Which type are you? People who aren’t sure what values to aim towards, what their lifestyle is like, and people who do not want to know it will be classified by this differentiation alone. Using VALS to differentiate consumer groups and confirming the type of individual has a high utility in the United States. This is because consumer segmentation and targeting can be used as crucial information from a corporate perspective. It also makes it possible not only to distinguish clearly the target consumer group, but it also provides the foundation for targeting and marketing mix, and makes it possible to establish a clear marketing strategy and effective marketing. However, in order to make a consumer value and lifestyle classification system like VALS, we need to organize research on consumer group values and ways of life in a particular society or country. In the case of imported academics, it is a daunting task to develop a VALS-like psychographic consumer

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system for its own local’s understanding. Unfortunately, the VALS in the United States could not be applied to distinguish the consumer groups in Korea, because Korean’s values, attitudes and lifestyles are different from those of Americans. Although it has been shown and proven how the psychographics could be used to know the psychology of consumers, it also demonstrated that the consumer psychology of the United States is limited in explaining the behavior of people in different social-cultural contexts.

Say “let’s be a mother,” but get it as “let’s not!” The wrong targeting and marketing mix results in “the ship heading to the mountain.” Public advertisements can be the most representative example. Separate targeting, separate marketing mix, and eventually the consumer psychology becomes separate as well. Let’s look at the public advertisement Let’s be a mother, made by the Ministry of Health and Welfare, South Korea (Figure 2.3). This was an advertisement aimed at solving the problem of a low birth rate. South Korea has suffered with the lowest birth rate in the world for about 10 years which has proved to be a devastating condition for the potential development of the nation. The Ministry of Health and Welfare were so concerned about this issue, they decided to make a public advertisement to promote pregnancy in working women. The public advertisement proves that even good intentions will bring about unexpected results if carried out without really understanding people’s minds. The gist of the advertisement was to show the ideal image of a workplace that is considerate of the pregnant woman. Maybe the people at the Ministry of Health and Welfare thought the general public would be moved by watching this advertisement.They probably expected the issue of a low birth rate to be resolved if society became more considerate of pregnant working women and if they were not disadvantaged by being pregnant. That’s what the government thought.

FIGURE 2.3

Let’s be a mother, the campaign to encourage having a baby

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However, people first thought the opposite given, the reality of how hard it is to raise children while working. The ideal image in the advertisement ended right there. The hardship of reality exceeded the advertisement. Maybe most working women thought, “My company will fire me as soon as they know I’m pregnant.” The workplace situation in reality is not as pleasant as the advertisement and colleagues you come across in reality are not as kind as the people in the advertisement. This is not because they do not want to be nice, but because they do not have that luxury. It is illogical to make a noise about being a mother while not being able to clearly grasp the reality and understand people’s minds. Another example is the Lotto advertisement (Figure 2.4) that says thinking about winning the lottery will change your life and give you hope, in the same vein as Let’s be a mother. Ordinary people now cannot move up even a single step in Korean society without the opportunity of striking it rich, which the lottery represents. The lottery imprints this terrible reality. Of course, the level and dimension of the two advertisements are different. Nobody has a child after watching Let’s be a mother, but there are a lot of people who buy lottery tickets after watching the lottery ad. Why is that? This is precisely because of a loss aversion tendency.3 In December of 2012, psychology Professor Daniel Kahneman of Princeton University received a Nobel Prize for economics. Many people thought it odd that a psychologist would win a Nobel Prize in economics. However, there is no reason to be particularly surprised. Conversely, in the 1930s world economic crisis, Keynesian economics made a clearer analysis of people’s psychological side. The issue is not the field of study but the subject. Professor Kahneman proposed prospect theory, which explains the loss avoidance tendency that appears clearly in the process of people’s decision-making. People react more sensitively to potential loss than potential gain. So the clearer the risk of loss is, the more people try to avoid

FIGURE 2.4

The lottery makes people dream about a life reversal

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loss instead of pursuing potential gains. As Kahneman says, people do not dislike danger, but they dislike loss. Loss always seems more significant than gain. Let’s look at Let’s be a mother again. People aren’t sure when it comes to potential gains from being pregnant. It is not clear what the positives or benefits are. On the other hand, they get a clear picture of the disadvantages of being pregnant. In this situation, isn’t it natural to react first to the potential risks? The Ministry of Health and Welfare promoting birth by showing the advertisement Let’s be a mother only awakes thoughts of the potential risks of being pregnant. The phrase that appears in the advertisement, “Add the heart,” meaning be more considerate of colleagues who are pregnant or have children, is refreshing. The expression is fresh. However, the phrase stands alone on a mountain. There isn’t anyone who extends a hand to grasp the well-meaning positivity of Let’s be a mother. It only conjures up vividly the difficulty of working during the process of being pregnant and giving birth, the things that happen at work while being on maternity leave, the employer’s reaction, and the difficulties of infant care. The kind and considerate colleague and boss in the ad are different in reality. The government’s promise of raising children together is still an empty promise. It appears as a mirage. The more emphasis that is put on a well-staged scene, the more evident the potential risk factors for women are. They only confirm, without identifying at all with the ad, the potential loss and burden of risk (time, money, and energy) that they have to endure from being pregnant and giving birth. However, the lottery ad does enjoy a certain degree of effectiveness. It can successfully entice the compulsive purchase of a lottery ticket. The 10,000 (about $10) won to 50,000 (about $50) won lottery ticket price is a drop in the bucket compared to the expectation and thrill after the purchase of a lottery ticket, or even the thought of the economic benefits one could enjoy with winning the lottery. People are unable to feel the risk of the potential loss or cost. It is a case of being able to feel the potential gains more clearly than potential loss.

Why doesn’t marketing mix work? The 1994 film written and directed by the Coen brothers and starring Tim Robbins, The Hudsucker Proxy, is more marketing bible than movie (Figure 2.5). In the movie, the protagonist Norville invents the modern plastic hula hoop. But the reaction from the market is lousy. The price of the hula hoop falls almost to the level of nothing and it comes to the point where the stores that purchased the hula hoops give them away as free gifts. It is as if they were thrown out onto the street. One day a pretty looking white, blonde kid picks up a hula hoop from the street and starts spinning it just in time for students going home after school to see him. Mesmerized, the students watch him and then go in droves to buy the hula hoops from the stores. What was given out as a freebie is now being sold at a high price. Let’s relate this case to consumption.What kind of sentiment can we discover? Can the children who swarmed to buy hula hoops after seeing a kid using one be explained simply as the desire to imitate? No. If it were a homeless person instead

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FIGURE 2.5

The movie The Hudsucker Proxy could be called the bible of marketing

of a kid spinning the hula hoop then would the kids have bought it? Of course, it is highly unlikely. Let’s interpret this scene from the movie applying the 4Ps of marketing. How is the product? At the time Wham-O introduced the plastic hula hoop, the CEO spoke highly of it saying, “This product is the greatest invention since the wheel.” It went through a rigorous quality test and it was a rather nice product. The price came close to being free. Still, it couldn’t attract any attention.Then, what about the sales location? It was sold in very nice toy stores, but it didn’t sell.They promoted it diligently, but it was no use. Ultimately, this product had all the factors that are included in the 4Ps of marketing, but it did not sell well. Of course, if the item were very cheap it might sell but then the company’s business becomes cheap

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as well.What is clear here is that although a marketing mix strategy that uses the 4Ps of marketing is not wrong in itself, it is not the core point that entices the consumer. This is the reason that consumer psychology cannot simply be seen as the base work for carrying out marketing strategies like market segmentation, targeting, and marketing mix from the company’s perspective. Let’s go back to the story of The Princess and the Moon from a consumer psychology perspective, or rather, from a marketing strategy aspect. Why did the kingdom’s subjects, doctors, and scientists ignore the princess’ request for the moon? Why did everyone only think of the moon they knew and didn’t try to know which the princess desired? They thought of the moon they knew and the moon that the princess was thinking of as the same. They did not try to know the princess’ psychology for wanting the moon. Business management is the same. Knowing the consumer’s psychology, targeting well, and establishing a marketing strategy through marketing mix all have to be done at the level of people’s desires and the public sentiment that operates in real life. Knowing the consumer’s sentiment, that is, exploring consumer sentiment represents not only the desire of the company but also that of the consuming individual.

Notes 1 2

3

Was nuclear facility in Iran detonated with Samsung Galaxy Tab? Samsung is having trouble with the commercial. The Kyungyang Shinmun, Feb. 3rd 2012. http://bizn. khan.co.kr/khan_art_view.html?artid=201202032101291&code=930201&med=khan Yankelovich, Daniel; David Meer (February 6, 2006).“Rediscovering Market Segmentation” (PDF). Harvard Business Review: 1–11. Retrieved 7 June 2011. Sharon E.; Pamela M. Homer; Lynn R. Kahle (1988). “Problems with VALS in International Marketing Research: an example from an application of the Empirical Mirror Technique.” Advances in Consumer Research 15: 375–380. Kahneman, D.; Tversky, A. (1979). “Prospect Theory: An analysis of Decision under Risk.” Econometrical 47(2): 263–291. Tversky, A.; Kahneman, D. (1991). “Loss Aversion in Riskless Choice: A Reference Dependent Model.” Quarterly Journal of Economics 106(4): 1039–1061.

3 “PSYCHOLOGIST SUGGESTS A NEW PARADIGM FOR MIND INQUIRY”

Read not the numbers but the mind! The movie Big (1998), starring Tom Hanks, is the story of a boy who achieves what every child dreams of at some time (Figure 3.1). That is, to be an adult sooner. One day at a carnival, Josh, the main protagonist, makes a wish to a fortune-teller machine called “Zoltar Speaks,” a machine that supposedly grants any wish. The next morning, Josh screams as he wakes up to discover he has the body of a 30-yearold adult, just as he had wished. However, his joy and surprise are short-lived as Josh soon faces a problem. Both his parents and his best friend do not recognize him. With no other alternative, he leaves his parents and gets a job at the MacMillan Toy Company. Unlike his outward adult appearance, Josh has the heart and thoughts of a thirteen-year-old. Thanks to that, the toys that Josh develops are well received on the market. Receiving recognition from the company, Josh participates in a new product development meeting along with the executives. Marketing executive, Paul, reports on the marketing research findings before the actual meeting. “This research was conducted through the scientific ‘double-blind method’ over the course of six months. We sampled a thousand children between the ages of 9 and 11 nationwide. Despite the current combined market shares of Nobots and Transformers at 37%, our company is also targeting the same market. Thus, our company’s new releases are estimated to take about a quarter of the market share and estimated sales of the new products are about one-fifth of the entire year’s sales. Are there any questions about what I’ve said so far?” The new product Paul suggests is a transforming robot that changes from a building to a robot. Paul argues this transforming robot will not only increase the

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FIGURE 3.1 The movie Big, in which boy-adult Josh reads the minds of consumers, with great implications for marketers

company’s market share, but also increase their sales. He claims the marketing research supports the notion, while the participants to the meeting just look around wearily while listening to Paul’s report. At that moment, Josh makes a “this is absurd” expression and says, “I don’t understand.” Taken aback, Paul asks what part he doesn’t understand. Josh’s reply is simple. “The building changes into a robot, right? Something like that … isn’t interesting at all!” Paul looks as if he’d taken a hit. But he quickly recovers his senses and hurriedly takes out the report. He reads its contents again for Josh and the participants. “If we look at the market analysis report, we can see that for the last two years the action figure market rose from 27 percent to 45 percent.” In the end, the content of the report says, “As much as the action figure market has grown, the transforming robot is a candidate estimated to sell just as well.” Just as Paul finishes, Josh asks again, “There are millions of transforming robots in the world. But a building transforming into a robot? What’s so special about that? It’s really boring!” The participants to the meeting begin to stir. The boss fixes his gaze on Josh with an intrigued expression. “How about a robot that changes into something like a bug? You know, one of those really big bugs that used to live in prehistoric times. It’d lift a car with its giant claw and crush it with a bang.” As soon as Josh finishes, one of the meeting’s participants expresses his interest by saying,“Prehistoric bugs, huh….”Another person says,“Interesting,” and is intrigued. Paul starts to panic because the executives are expressing an interest in Josh’s idea. “Everybody, please listen to what I have to say. Everybody….” However, Paul’s words are drowned by the noise of people saying, “Yes, let’s listen to what Josh has to say … Josh’s idea is amazing. A robot that changes into an insect….” Excited by the favorable response, Josh spills his ideas like a naïve child. “From something this small to this big we can make them in a lot of different sizes. They can destroy cars….” Almost in despair, Paul stands in a corner of the meeting room and shouts that such a thing could never happen while everyone is praising Josh’s idea. Though it is happening right in front of him, his face says that he will never understand.

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The event in the movie Big is, of course, like a fairy tale. It is not something that can happen in reality. However, there is a place where a similar situation is being displayed: at business marketing meetings. It is something that happens when most companies loudly claim to know the consumer’s mind from marketing research findings. From the corporate perspective, they think they did “proper marketing research” but the truth is different. Most of the time, it is a situation where they have barely done some basic research, let alone know what the consumer is thinking. If a new product is developed or a new service is launched based on this kind of marketing research finding, the result will be obvious. Although the consumers might have been reflected in the new product, the consumer’s sentiment itself is unmoved. Then the related people mention things like “financial crisis” or “unprecedented depression.” What is the reason marketing research finding doesn’t help? What is the real reason the marketing prediction that claims to capture the consumer is wrong?

The tragedy of marketing research Let’s look at the marketing research finding suggested by Paul in the movie Big. There’s nothing wrong with his marketing research method. It is just that he didn’t find out the consumer’s desire for wanting a new revolutionary toy. He confirmed the fact that the transforming robot toy market is expanding, but he didn’t try to find out how the kids who are the majority of the consumers would feel. It was marketing research that began with trying to know the consumer’s mind, but it only served the toy market as its subject and didn’t find out the thoughts of the kids who consume the toys. He didn’t find what was actually needed in developing a new product. We often see this in real life marketing situations. The consumer research at many companies asks who is the consumer at its core. However, there is a surprising truth. As they ask these questions, what they want to know is separate from what they are asking. Business people using marketing research focus more on the products or services they are marketing instead of the consumers’ minds.They are deceiving themselves by the focus of their interests.The desire to sell their products or services has left little room for their consumers. Although they may mention the consumer’s desire, they have not understood it. The following chart is an exemplar of marketing consumer research findings on hair care. It was conducted with the objective of finding out who the target group was for a range of hair care products planned for imminent release, in particular the hair treatment and essence (Table 3.1). If you were a marketer who came across this information, how would you interpret it? You would probably first try to find out what kind of people make up the target consumer group. They are women, differentiated by their age and situation: college students, single working women in their twenties, housewives in their early thirties, and housewives in their late thirties. There are hair care products such as treatment, conditioner, essence, serum, water, and lotion. The research findings

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TABLE 3.1 Who will be the main target group for the new product to be released? The identification of consumer groups from a conventional marketing research “hair care products market report summary (2008)”

showed that college students and working women in their twenties used hair essence almost every day. However, there was a small difference in the case of housewives. Housewives in their early thirties used hair essence about four times a week and housewives in their late thirties used hair serum and essence about two to three times a week. College students and housewives mix the use of treatment and conditioner, but single working women in their twenties use treatment instead of conditioner. Looking at these results, marketers concluded that since treatment was used frequently, the market for treatment would expand in the future. It’s already been seven years since these research findings were reported. Not surprisingly, the products and marketing campaign were not successful in the market. Maybe, that is why this type of erroneous interpretation was possible. The people in marketing might have pinpointed several reasons for the results. However, they would never mention that they did not understand their customers and their mind. As they have done the, so-called, marketing research, they have assumed that they have figured them out. Of course the situation hasn’t changed much now. Many businesses still do the same thing under the name of marketing research. They want to find out the new product’s marketability while trying to find the consumer of hair care products on the outside. However, they have not been able to investigate what types of consumer habits their clients have and where this kind of behavior comes from. They have just divided the consumer by the general demographic or distributional criteria of sex, age, or profession. It is a stale approach to marketing research and the consumer mind that is based on conventional wisdom.

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Who is the core consumer? Most marketing research divides consumer groups based on such demographic markers as sex, age, or region. These are familiar classifications. However, this type of classification is not useful for knowing which consumer is interested in a particular product or service and how their minds work. For example, let’s say there is a group of women in their twenties who live in the Gangnam area of Seoul, or a working person in their thirties living in the suburbs. At a glance, it seems like these are groups with clear characteristics. However, if you think twice, it is clear that this type of classification is very vague. A picture of a specific person inside each group does not appear. Therefore, we gather little useful information. Isn’t it possible to have many different types within a group? Even if it is a female from the same Gangnam area, her way of thinking and behavioral pattern might be different based on her parents’ background, her job, and so on. Let’s look at a specific somebody from each group. In the case of women in their twenties living in the Gangnam area of Seoul, Kristen Yoon lives in expensive Dae Chi Dong in Seoul. She is preparing to study abroad in the States after graduating from college. Her goal is law school. She has been having a hard time since there is so much to study. She relieves stress through shopping. The working person in their thirties who lives in the suburbs is Joel Choe from Gwa Chun in Keyong Ki Do. He works in finance. He’s been an employee for eight years. His salary has increased considerably and he has a title that indicates his status. Joel buys only what he really needs. There is absolutely no way he buys on impulse. After reading these descriptions, it is easy to draw a picture of the women in their twenties living in the Gangnam area, or what the working man in his thirties living in the suburbs looks like.Their everyday life patterns are also imaginable. Instinctively, the thought occurs that there aren’t only these types of people. You begin to realize the number of angles needed to approach these people and what to ask. It is completely different from receiving only vague information such as sex, age or region. Of course there are other approaches to classify consumers based on diverse characteristics or reactions of consumers, such as utilizing multivariate variables and analysis techniques such as regression analysis, discriminant analysis, cluster analysis or factor analysis. Among these, cluster analysis classifies according to the similarity of answers based on the variables collected from surveys. We call each of these different groups clusters. Looking at the cluster analysis results chart (Table 3.2), it is clear how this type of statistical technique differentiates consumers. The marketing research above was done at a representative domestic shoe company. As research that utilized the cluster analysis model, it was conducted to find out what kind of consumers used their products. The research was undertaken to identify the core consumer groups for women’s shoe products (brand).The data was acquired from an actual company. However, to protect the identity of the organization, it has been modified without distorting the actual data. From the data, the company’s consumer groups are divided into six groups: Super mom 29 percent, Career woman 22 percent, Princess type wife 18 percent, Average middle class wife 15 percent, Penny pinching wife 14 percent, and Veteran housewife 3 percent. Can

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we identify the company’s core consumer group for the new brand? Also, can we find out which group should be targeted to develop new products? Average marketers will think that Super moms are the main consumer group of this company. This is because their market share is the highest. These are married working women in their late twenties to thirties with a living standard of US$ 3,000 to 3,500 per month. Annually, they purchase, on average, 2.9 shoes and they have, on average, 6.7 shoes. They value coordination and harmony in fashion and spend, on average, US$ 130 per month for their fashion. They prefer deferred tax items over discount stores, outlets, or department store events. Now does this shoe company have a vision? Is the hopeful prediction of developing more new products, expanding the business, and increasing stores nationwide a possibility? That’s not the case at all. If a company’s core consumer shows the tendencies of “Super mom” then the shoe company is probably in a relatively difficult situation. The Super mom group not only has a comparatively low purchase level of shoes, but they also prefer deferred tax (bose) towns over the famous department stores this brand mostly sets up their stores in. Marketing research by cluster analysis guarantees this kind of useful information at the very least. It’s also possible to find, more or less, clues as to how the current marketing is going wrong. Then who is the group this company should focus on when developing a new product?

TABLE 3.2 Cluster analysis results

Super mom (quality buyer) 29%: • late 20s to early 30s, married, employed • average income • buys 2.9 shoes, owns 6.7 shoes in total • spends US$130 per month on clothing • goes to discount store, department store for sales Average middle class wife 15%: • late 20s or 30s, married, housewife • high average income • buys 3 shoes per year, owns 7 shoes in total • goes to department stores for shopping

Career woman 22%:

Princess type wife 18%:

• mid or late 20s, not married, employed • average income • buys 3.3 shoes per year. • buys designer clothing, spends US$170 per month on clothing • uses various shopping channels

• 30s or 40s, married, housewife • upper middle class • buys 3.5 pairs of shoes per year • follows latest trends, spends US$170 per month on clothing • goes to discount stores for shopping

Penny pinching wife 14%:

Veteran housewife 3%:

• mid or late 20s to late 30s, married, housewife, employed part time • buys 3 pairs of shoes per year, owns 5.9 shoes in total • sensitive to price, spends US$130 per month on clothing

• 40s or older, married, housewife • upper middle class • buys 3 pairs of shoes per year, owns 7 in total • buys luxury brands, spends US$150 per month on clothing • goes to department store for shopping

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Most marketers consider the group with the highest shares as the target group. This is because they expect that the likelihood of future sales will be high if they choose the consumer group with the highest market share group. If they choose Super moms as the main consumer group for new products, their design strategy should be established with them in mind. The problem is that Super mom’s consumption tendency is not that high. Even if there’s a new product that’s out she is unlikely to purchase it. Then shouldn’t the Princess type wife, with the highest purchasing power and purchasing level be the target? In order to increase the sales of the company, this kind of strategic decision is necessary. The Princess type wife group has a relatively high income and a higher number of shoe purchases compared to other groups. Let’s talk about the conclusion. This company couldn’t make a strategic decision because they weren’t able to accept that Princess type wives had to be their target. The marketers, the product designers, and the managers, all refused to accept this fact. At that time the designers working at that firm thought women in their mid to late twenties should be targeted. They thought their shoes should be young and sophisticated. The management agreed, believing the company’s product should exceed the limitation of being a domestic brand and become similar to the design of Italy’s luxury brands. Eventually the company released its new range with a luxurious image aimed at the Career woman.The company’s reputation was good and it got the attention of the experts. However, it failed in the market. Career women looked for the real luxury brands from the start instead of that company’s shoes. What was the reason there was such a cold response to a company that boasted history and tradition? They did prior investigation, market analysis, and did their best in the design and production process. They even produced the highest level of advertising. Then what went wrong? This company found out in advance the consumer’s tendency through marketing research. But they couldn’t find the exact solution for the question they wanted to know the answer to and couldn’t establish a marketing strategy. Statistical techniques like cluster analysis and discriminant analysis confirm, to a degree, the various and specific consumer behaviors in each different consumer group. However, something important is missing. They don’t find out the consumers’ minds, what the people who actually make the decisions want to believe. Who has a core influence in the decision-making process when the consumer and the producer/seller think differently? We usually think businesses follow the consumer’s mind. However, the truth is completely different. The business follows what it wants to believe. It’s no wonder the result is failure. This is the result of targeting the consumer with an approach they want to believe to be right without any clear evidence.

Stumbling marketing research: what should be researched? Let’s look at an article titled “Is the cell phone’s competitor the soft drink?” The research result from the Cheil Communication Sciences Institute in Seoul is similar

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to the situation introduced in the movie Big. The research was done to find out what the consumer’s belief was but there are no consumers’ thoughts in the results. There is only the marketer’s unfounded expectation that “it’s probably like this.” Cheil Communication Sciences Institute revealed on the 14th that after analyzing the life share—how much each different brands’ products occupy the time in daily life—of 8 domestic industries, approximately 40 brands when the consumer briefly escapes daily life and takes a break, the percentage use (life share) of cell phones were the highest at 22.2% followed by media devices 14.7% and beverages at 11.7%. Compared to this, the life share of cell phones was 26.5% when out with a friend/colleague/or neighbor while the percentage of food service industry (9.9%) and alcohol industry (9.2%), beverages (7.9%) dropped significantly. From research results, Cheil revealed that cell phone companies should cooperate or compete with media and drinks companies instead of competing with other cell phone companies. Cheil declared “an increase in life share appeared to lead to an increase in mind share and market share.” They added that “through the use of life share, which measures how much the consumer’s life is occupied by the product instead of the existing market share and mind share, an effective marketing strategy and predicting the changed market should be prepared.”1 Cheil’s Institute may have wanted to let people know that they had developed a new research method to investigate consumer behavior. So they claimed brand loyalty and market share increase can be measured in a new way called life share. But, just as Paul tried to capture children’s hearts with the transforming robot in the movie Big, Cheil showed that they weren’t able to read what consumers really want and determine what their minds are like. The life share concept that appeared in this research is no different from parodying someone’s brain structure as expressing a person’s main interests. The marketer’s brain structure can also be expressed from their life share standard. Their minds are probably occupied with the products of their own and their competitor’s companies! The product-centered marketer’s mind is best revealed in brand awareness research. It finds out people’s thoughts on a particular brand, that is, mind share, by asking them questions such as, “What brand comes to mind when I say computers?” The brand that comes up first at the time is seen as the brand that has the greatest share of people’s minds. They find that this brand has currently captured people’s hearts and so has the highest future growth possibility. The concept of mind share appeared as an alternative solution to fierce competition in placing importance on market share with no relation to profits. From then on, market share, as an important concept in marketing, was used as a strategic indicator of the effectiveness of brand loyalty, customer maintenance, and marketing activities. It was also considered as a simple way of predicting the direction in which the consumer mind would travel when the mind’s identity wasn’t known to marketers and consumers.

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However, this is, yet again, what happens when the consumer’s mind is unknown and it is unclear how to find out their minds. This situation is most obvious when it has utilized the concept of market share but used the word life share.The communication research company investigated and studied each different brand’s life share to find out what kind of status various brands occupied in the consumer’s mind. Based on research findings, they suggested that cell phone companies cooperate or compete with media and drinks companies instead of competing with other cell phone companies, to target consumers’ break time. They’ve made an assertion, like someone’s brain structure, however, this claim is the result of looking for general competitors without understanding the consumer’s mind or behavior. There is a representative example of looking for competitors without an aim, that of Nike’s marketing. When sales fell, Nike first looked for the reason. In the process, they found out that kids who are into computer games went outside less and, therefore, sneaker sales dropped sharply. Thus, after declaring that Nintendo was Nike’s competition (Figure 3.2), they fought to drag kids who like computer games into the outdoors. Nike’s strategy was similar to the communication company research results. However, there is one identical fact that both Nike and the research company failed to notice. That is the fact that an individual does not choose between playing outside wearing Nike shoes and playing video games, or between using one’s cell phone or going to watch movies when meeting a friend.The kid that wants to play outside wearing Nike shoes will do that and the kid who wants to play games using

The book Nintendo as Nike’s Competition—let’s buy shoes for kids instead of Nintendo

FIGURE 3.2

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Nintendo will play games no matter what. Some people are preoccupied with their cell phones even when meeting a friend, while another person will watch a movie or drink beverages while chatting.The activities change depending on who it is and what they value. The various actions of an individual in daily life reflect habit or preference. In an individual’s interior life, many activities do not occur competitively, all at once. For example, moments such as resting or meeting a friend do not compete with each other. The research simply measured how many other activities there were using cell phones and interpreted those as being cell phones’ competitors. It misinterpreted the fact that consumers can each act differently and saw each different action competing against each other. Although there are similar marketing examples, it is a representative case of not being able to see the consumers’ mind, the proper subject they that they actually should have explored and investigated. Let’s make an assumption about what the people in the marketing company might have thought. Maybe they wanted to sell the new measuring indicator, the index of life share. However, they only had a strong desire to sell and were oblivious to the mind and behavior of the consumer using their cell phone in their daily life. They only paid attention to the product they needed to sell without looking at the consumer.They weren’t able to read the mind of the consumer. It is something that happens when the majority of marketing research companies follow a particular marketing case without knowing the consumer’s mind.

There is no perfect one There is someone who showed how the consumer’s mind is connected to consumer behavior in real life, the psychologist Howard Moskowitz (Figure 3.3). He is best known as a business consultant and a researcher that utilized psychology to understand the consumer’s mind. He established a small consulting firm in the area of White Plains, NY after receiving a PhD in psychology at Harvard in the early 1970s. One of his early clients was Pepsi who came to Moskowitz and said, “There is a new substance called aspartame [a sweetener] and we’re thinking of making a diet Pepsi using this. We’re considering how much aspartame should be used. How can we find the best proportion? We’re actually wavering in the 8–12 percent range. 8 percent is too bland and more than 12 percent is too sweet. How much is the right level of sweetness?” It was a very explicit question. For people used to psychology research this task seems simple. This is because the aspartame content can be subdivided from 8 percent to 8.1 percent, 8.2 percent, 8.3 percent …12 percent and the preference of thousands who try it out can be researched.They expect the public’s preference ratio will appear as a bell curve from the lowest to the highest. And it’s only a matter of determining the most popular content. Isn’t it very simple research? If it’s anyone who received proper psychological training, or rather, if it is anyone who has any knowledge of marketing research they will think like that.

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Moskowitz also thought it was easy work. He immediately proceeded with the experiment and collected the data to draw a graph. However, the result was completely different from expectation. The preference did not appear as a bell curve. Not only that, it was hard to find any consistency in the extracted results.The concerned parties looked at the data and were shocked. Eventually, the experiment team concluded that it was impossible to find the optimal level of aspartame. The in-house research team that requested the investigation made the judgment, from previous experience, that there could have been an error during the experiment and thought it was appropriate to choose the middle 10 percent (Figure 3.4). However, Moskowitz, who had his own intellectual standards for his research, could not just let it go. It was too painful to forget about it because he could not figure out why that kind of result came out. That problem bothered him for many years thereafter. One day, Moskowitz was sitting in a restaurant in White Plains and was thinking of some work requested by Nescafé. Then the answer suddenly came to him. The problem with Diet Pepsi lay in asking the wrong question. They had tried to find the one perfect Diet Pepsi. However, what they really needed to look for were the many perfect Pepsis. This was a tremendous discovery. Moskowitz immediately sought out academic societies for food research all over the country and declared to everyone he met,“You all tried to look for the one perfect diet Pepsi.That is wrong. The perfect Pepsi that fits people’s tastes could be many!”

FIGURE 3.3 Howard Moskowitz, who tackled the question “What’s the right level of sweetness in Diet Pepsi?”

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10%

8%

12 %

Expected consumer responses to levels of aspartame in Diet Pepsi

10%

8%

12

%

Actual consumer responses to levels of aspartame in Diet Pepsi FIGURE 3.4

Expected results vs. actual results from market research

People asked with a blank face, “What are you saying? Have you finally gone mad?” However, Moskowitz did not give up. He asked around and used every possible means to get a project that could prove his thoughts. However, there wasn’t anyone willing to hire him. He did not give up and endlessly argued for what he had discovered. Finally, he had his opportunity. Vlasic Pickles contacted him. “Dr Moskowitz, we want to make the perfect pickle.” Moskowitz answered, “The perfect pickle is not one but many. It’s not enough to improve the existing pickle’s taste.There are many perfect pickle flavors. Instead of improving an existing pickle flavor, a new tangy flavor needs to be made.” This is how the tangy pickle came about.

How many tastes does the consumer have? Moskowitz’s idea that there is not one but many various forms of perfect flavors for consumer tastes was proved by the Vlasic pickle. However, that was not enough. Another good opportunity came along in the shape of The Campbell Soup Company. At the time, Campbell’s was producing Prego to counter Ragú, the spaghetti sauce brand that was popular in the 1970s and 1980s. Prego was much better than Ragú when judged strictly in terms of quality. The tomato sauce was much better with pasta because of its outstanding seasoning ratio. The plate test between Ragú and Prego was a famous story that colored the 1970s. The Ragú sauce pooled at the bottom of the plate when poured over the spaghetti, but Prego’s stayed on top of the spaghetti because the viscosity was good. What was the reason Prego couldn’t avoid floundering, even when its viscosity and quality were much greater? Moskowitz scanned the list of products first. Prego’s brand had enough variety of products to be called the society of dead tomatoes. However, the problem was that they were not clearly distinguishable. He suggested looking for a new

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product that could have a clear, distinct flavor. First, the Campbell’s chefs made 45 different types of spaghetti sauce. They created a variety of sauces using every possible combination and method. Not only were there sweet, garlic, and tangy flavors but the flavors were reclassified by tartness, tomato content, and chunkiness. They made every spaghetti sauce imaginable. The research team took all 45 sauces on to the streets of New York, Chicago, Jacksonville and Los Angeles. They gathered a busload of people in an assembly hall and asked them to taste ten different types of pasta over two hours; each type of pasta was made using each different sauce. After tasting they asked them to rate their preference for each dish on a scale of 0 to 100. The experiment was done over the course of many months. As a result, the research team gathered a heap of data about American preferences for spaghetti sauce. Of course, they did not immediately find the perfect spaghetti sauce while analyzing the data. Even Moskowitz didn’t dream that something like that existed either. Instead he classified the data according to its specific traits and divided the people’s preferences into a few groups. As a result, it was revealed that American taste buds fall into one of three groups: the group that likes a mild flavor, the group that likes a strong flavor, and the group that likes chunky tomatoes. The most significant among these was the third group because in the early 1980s there weren’t many spaghetti sauces in supermarkets with chunky tomatoes. Prego was shocked that one third of Americans wanted chunky flavored spaghetti sauce, yet there was no chunky tomato sauce on the market!2 Prego started to make a whole new spaghetti sauce after that. They released a line of chunky products, and these products dominated America’s spaghetti sauce market straightaway. For ten years Prego’s chunky sauce brought in US$60 million. Later, Ragú also hired Moskowitz to carry out the same work he had done with Prego. It’s possible to check how many Ragú products were released in big

FIGURE 3.5 People’s desire for spaghetti sauce has been shown through the success of Prego and Ragú

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supermarkets. How many could it be? A total of 36 products divided into six flavor groups: cheese, light, savory, oily, traditional, even chunky! The industry saw the research result and admitted they were wrong. To which Moskowitz replied that they had overlooked how people couldn’t always explain exactly what they wanted. This work was a revolutionary case that showed how psychological research could solve real life problems. Some might evaluate this as the event that fundamentally changed how the food industry made consumers happy, but that is not the point.The fact is that measuring people’s minds has to proceed under completely different circumstances to the approach taken by general economics or psychology. People’s reactions or thoughts are not evenly distributed on a graph like a bell curve. Therefore, in order to clearly grasp people’s minds new, unique research methods that are different from existing research methods need to be applied. In challenging existing conventions of psychology and marketing world Moskowitz’s research is comparable to Columbus’ egg.

People’s minds are diverse and people’s tastes are democratic Moskowitz’s consumer research started to gain the industry’s attention in the early 1980s. At the time the food industry was mesmerized by mustards or, precisely speaking, the Grey Poupon phenomenon. In the US in the 1980s, the choice of mustards came down to the traditional mild-flavored American “yellow mustard” and the food industry wanted to broaden the consumer’s taste for different types of mustard.Then Grey Poupon in France’s Dijon style appeared (Figure 3.6).The maker Heublein put this mustard in a small glass bottle with an enamel tag and made it in the French style. The actual production occurred in the Californian city of Oxnard. Heublein put the mustard in an eight ounce bottle and decided to charge US$4 for it instead of US$1.50. They went for a price greater than twice the price of normal mustard. The advertisement for the product shows two chauffeur-driven Rolls-Royces passing each other, as they draw parallel they stop and one owner inquires of the other, “Would you have any Grey Poupon?” Through this process

FIGURE 3.6

of mustard

“Do you eat Grey Poupon too?” Campaign to increase sales

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Grey Poupon became a hit and not long after it dominated the mustard market. The food industry thought of this as marketing’s victory and came to the conclusion that people wanted something more expensive and something more worthy of desire than the brand they were happy to use at the time. They wanted to purchase a higher grade of mustard. Better mustard! More expensive mustard! Mustard that was more sophisticated, refined and more meaningful! Moskowitz roared that everyone was wrong. In response to the food industry’s interpretation, he concluded: There is no hierarchy in the world of mustard or spaghetti sauce. All products lie horizontally. There is no good mustard and no bad mustard. There is no perfect mustard and imperfect mustard. There are only different preferences. Grey Poupon was a hit because it was a new flavor of mustard that was different from existing mustards. People’s tastes are extremely personal and democratic. It’s only that there are many kinds of mustards adapted to the taste of different people.3 Howard Moskowitz’s research informs us that people’s minds are simply different and are not able to be classified by order of rank. It’s the claim that horizontal segmentation is necessary when understanding people’s minds. Moskowitz went against the vague belief of the food industry that thought there was a preference for Grey Poupon because it seemed better. It is the idea that looking for that ideal something that fits people’s taste is wrong. His claim rejected what people believed for a long time. Because in most societies across all ages and countries, people have always wanted the best and have sought out the ideal. Moskowitz stresses the need to be free from the tendency to pursue the ideal if one wants to know the consumer’s mind in reality. The psychology of looking for the best, the ideal something, is a familiar behavior pattern for Koreans. Koreans love the best. Everyone tries to choose what others say is the best. The whole society has a strong inclination, propensity, or disposition in that direction. They try to get admitted to what others say is the best school and the best company. It’s the same when it comes to marriage. They believe happiness will be guaranteed when they meet a spouse that has the best “specifications.” So is the case with marketing. They try to look for a technique or strategy that is considered the best. It is very unfamiliar and difficult to imagine diverse consumer groups and understand their various minds in a society with a strong tendency such as this. Everyone is avidly looking for the best something that consumers will want instead of trying to know who the consumer really is!

Notes 1 2 3

Which one does compete against cell phones? Soda? Josun biz, Oct. 14. 2010 http://www.ted.com/talks/malcolm_gladwell_on_spaghetti_sauce/transcript ibid.

4 YOUR MIND HAS JUST BEEN SCANNED

KoKoMyun made the instant noodle market cry Abigail Lee is a working woman who enjoys Saturdays the most since a five-day school system lets her spend the entire weekend with her daughter. On Saturday morning, mother and daughter get some extra hours of sleep, have a light brunch, and drive twenty minutes to a big supermarket to buy groceries. As usual Abigail goes to the market with her daughter. She picks up fruits and vegetables in season, thirty eggs, two blocks of tofu, and a 2 kg bag of 12 grains for the cart, before moving to the instant food area with the intention of choosing a few types of ramen. Her daughter often makes ramen alone when she and her husband have to work overnight. Ramen is literally an emergency food in Abigail’s household. After looking at different brands she picks KoKoMyun. This is because her husband and daughter, who are big fans of the reality-TV show Qualifications of Men, insist on “only KoKoMyun for us!” However, Abigail herself doesn’t really feel drawn to KoKoMyun because she thinks ramen should not deviate with trends but rather stick to its original taste. Abigail is curious as to why her daughter likes the tasteless KoKoMyun. Did people’s taste change, wondered Abigail? What is the real reason ramen flavors are different? How is a new ramen product made? In April 2011, comedian Lee, Kyung Kyu won second place with KoKoMyun on the KBS entertainment program Qualifications of Men—“Master of Ramen” episode. Team manager Choe Yong-min (Korea Yakult marketing team), who served as a judge on the show, had an instinctive flash that he should not miss that KoKoMyun.1 Mr Choe was joined as a judge on the “Master of Ramen” episode by ramen industry experts from Nongshim and Samyang. Among them, Manager Choe intuitively knew the commercialization possibilities of KoKoMyun and seized his chance.

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There were three reasons his eye fell on KoKoMyun. First, it stimulates a significantly different taste from existing ramen and the taste was pretty good. Second, as someone who had worked for a long time as a ramen research developer the steps to KoKoMyun’s commercialization were automatic. And third, the brand and concept were in perfect unity. A name that expresses the product’s characteristics without explanation is rare. What Mr Choe from Korea Yakult experienced on the entertainment program is a microcosm of the research Howard Moskowitz carried out to find a new flavor of spaghetti sauce. From discovering a new taste for ramen, through the stages of commercialization and with stories related to the development process, Korea Yakult’s manager confirmed exactly the new taste that consumers wanted and succeeded in commercializing it. KoKoMyun gained a huge success—enough to be listed as one of the top ten hit items of 2011 by the Samsung Economics Research Institute’s publication.2 It created an upheaval in the domestic ramen market dominated by Nongshim— represented by Shin Ra Myun. What is interesting is the reaction after its success. The ramen industry and the media interpreted KoKoMyun’s marketing success as a contest between red soup and white soup. They thought KoKoMyun succeeded because it reversed the convention that ramen soup equalled red. At the time KoKoMyun differentiated itself with white soup, compared to Shin Ramen, which occupied 70 percent of the market, that has red soup (Figure 4.1). However, there is a limit to their analysis. This is because in the process of asking why KoKoMyun succeeded they had neglected the consumer’s mind and focused only on the product’s property. This is in the same vein as Abigail who argues for ramen’s original taste seeing KoKoMyun as only white soup ramen and not understanding why her daughter prefers it. Was KoKoMyun’s success really thanks to the power of white soup? Was there a white ramen soup other than KoKoMyun? Nagasaki Jjambbong’s soup was also white, and even further back the color of a noodle released by Nongshim as a breakfast substitute was also white. Ten years ago Nongshim released several white soup ramen brands, but they did not achieve great success. There was one reason: the situation had changed. That is, just ten years before Koreans chased the general

FIGURE 4.1

“We are the white,” a new style of ramen, created a sensation in 2011

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trend rather than following their own taste. At the time, the trend in the ramen market was for ramen soup to be spicy; everyone thought there was only one taste for ramen. Another ten years passed and, in 2011, KoKoMyun came into the world. This time it was not a simple concept new release, as ten years before. It was an event that announced to the whole world that there was a clear change in public taste, that people actively sought new flavors, and above all that people looked for things that suited their taste. In short, there was a change in the public’s mind towards ramen. Afterwards Nagasaki Jjambbong and Kiss Myun, with similar white soup, added new flavors and received a positive response in the market.The tastes that were used for the spicy red soup were now in the new white ramen soup. However, many concerned parties only discussed the soup color itself instead of the fact that a new flavor had emerged. They made a great fuss over the physical property of white soup as if it was the secret that captured the consumer’s taste.This was unfortunate. In truth, the reason KoKoMyun captured the consumer was not because the soup was white but because the taste suited the palate of consumers that sought out diverse tastes and individuality. Of course, in pointing out this phenomenon they have attention to the visible clue and discussed the white soup event. Shouldn’t they have addressed whether the consumer’s mind was focused on the color of the soup or their tendency to seek out variety and individuality instead of trends?

Between well-being food and health food If KoKoMyun is a case that succeeded by following the consumer’s change of taste, then Nongshim’s Shin Ramen Black is an example of encountering serious difficulties from not being able to read the consumer’s desire. Nongshim tried to find a new breakthrough in the stagnant ramen market. It was a situation where Nongshim was increasing its market share with Shin Ramen—that had the highest brand awareness—but its sales were stagnant. Eventually the company decided to release a Shin Ramen premium-line product, which is how the new product, Shin Ramen Black, came to be.This ramen was released with a price twice as expensive as existing ramen. The company put in a great deal of effort from the beginning stages of development to avoid the criticism that they had only raised the price on an existing ramen product. The advertisement was also significantly different. They advertised that the new product, Shin Ramen Black, provided the same nutrients as a bowl of oxtail soup, which is a very popular traditional Korean dish. The regular Shin Ramen had 450 calories, but Shin Ramen Black had over 600 calories. It showed that the company still hadn’t been able to break from convention regarding ramen.That is, the consumers commonly thought that ramen was unbalanced in terms of nutrition and that ramen was a cheap substitute food. Nongshim ended up emphasizing the calories as they tried to change those thoughts. However is there anyone who prefers high calorie food these days in a world where everybody stresses slim figures and shouts, “I can forgive ugly, but I can’t forgive

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fat?” It was a simple event, but in depending on vague convention, the company released a product that went against the food culture trend. They faced a paradoxical situation. It is easy to understand when you see the message that expresses Shin Ramen Black as a health food made with ox bone broth, a nutritious meal in itself. The core concept of the newly released Shin Ramen Black was as a health food made with ox bone broth. It was a new product to counter the conventional idea that ramen could not be nutritious.This was the level at which the ramen company understood its consumers. They probably wondered what a consumer who enjoys and eats ramen often would worry about the most? Probably 1) if you ate a lot of ramen there might be a nutritional imbalance; 2) was it harmful for the body since it is an instant food?; 3) could there be nutrient deficiency; and 4) is it a cheap substitute food? Company officials probably figured out that it would work well enough on consumers if these kinds of weak points could be supplemented. So they stressed that it was an invigorating meal. The advertisement copy was also angled as “we have made it for consumers who couldn’t enjoy ramen because of health concerns.” They had developed a new product for (newly targeted) people who did not eat ramen often and focused on the consumer’s health and balanced nutrition. Was what they thought correct? Currently Korean society’s ramen consumption has been on a decreasing trend. This is said to be because of the well-being movement. It is the understanding that ramen is seen as bad food in contrast to health food. In the past, if one said that they had ramen, people used to give the advice, “Do you eat ramen all the time? You need to have a real meal” with a worried glance. In the old days ramen was a representative substitute meal that alleviated hunger. The marketer for ramen probably had in mind the consumer psychology that substituted a meal with ramen in the 1960s and 1970s when there wasn’t much to eat. So the marketer probably thought it would be successful if the nutrients and calories were supplemented which is how Shin Ramen Black was developed. Maybe in the ramen developer’s mind, it was still equal to poverty, struggle, teen heads of household. The company that developed Shin Ramen Black probably wanted to add wellbeing and health to ramen to create new value. However, in a bountiful twentyfirst-century Republic of Korea, consumers do not fear hunger but they do fear calories. These days ramen consumers are not looking for meal replacements but they are looking for a new taste with the lightness of a snack. They are not looking for a highly nutritious meal, but a taste that pleases the mouth. Of course, in the marketing research material there probably were consumers concerned about their health.The company could have decided they were the target consumer class and concluded that nutrient-supplemented ramen was needed. However, they have clearly failed in capturing the consumer’s interest.They probably would have developed premium ramen based on the unfounded idea that it ought to be like that, instead of figuring out the consumer’s exact mind. This is how new products, based on assumptions and conventions, that neglect the consumer’s mind come to be.

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How is Moskowitz’s research different from average market research? The company that developed Shin Ramen Black probably conducted marketing research to know the consumer’s mind. But what went wrong? In the field of marketing, questions are asked first in order to know the human mind. Questions like what do you want and what makes you happy? The research that asks such convenient questions for the questioner is conducted through surveys or focus group interviews. They apply the general public survey method, which is unrelated to the subject being researched, to marketing research as it is. Before Howard Moskowitz carried out his psychological research, Ragú and Prego had used this method for many years. They asked consumer groups what kind of spaghetti sauce they wanted. However, in the 20–30 years during which they conducted the questionnaires, they had never received the response that consumers wished for a spaghetti sauce with lots of tomato chunks; even though, as it was later discovered in Moskowitz’s research, one in three consumers wanted this. He cited the spaghetti research case and concluded that people didn’t know what they really wanted, and the mind does not know what the tongue wants.Then does it mean that surveys and FGI (focus group interview) methods are wrong? Of course, the research method is a problem, but a bigger issue is our general presumptions related to the effort to know the consumer’s mind. Moskowitz did not find the perfect spaghetti sauce. He tried to look for many types of perfect spaghetti sauce. Let’s look at that example again. Spaghetti sauce has its origins in Italy. Originally, Italy’s spaghetti sauce was very watery. If someone speaks of the traditional spaghetti sauce that prevailed in the 1970s, then he will certainly speak of Italy’s spaghetti sauce. Other forms of spaghetti sauce are deviations from tradition. The first Ragú product was the same. In the beginning Ragú produced a product that had no chunks at all. At the time everyone thought consumers would be satisfied and only be happy if a spaghetti sauce like the traditional one was provided. This was the outcome of the belief that something perfect and ideal should be found. The mind that looks for something perfect and ideal is the mind that respects the universality that applies to anyone. In typical marketing research—general psychological research is the same— universality is presumed. Actually, universality is an idea that swept across all science fields in the nineteenth and twentieth centuries. Not only psychologists, economists and doctors, but also scientists were desperate to find the rules to control mankind. However, the situation changed. Scientists who now study people’s behaviors no longer cling to the premise of universality. It is a kind of upheaval that has occurred in the sciences in the last ten to fifteen years. It is a similar revolution to the paradigm shift in physics from Newton’s classical physics to quantum mechanics. It is precisely the movement to broaden the understanding of diversity and end the debate on universality. The field of genetics is the most representative of the new approaches in the sciences. Genetics opened the doors wider than any other field to consider human

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diversity. A good example is the change in the understanding of cancer and its treatment methods. In the past, the medical field tried to know in detail how cancer occurs, how it spreads and operates. However, now they study how one person’s cancer is different from another person’s cancer. Even if it is the same stomach cancer, the outbreak is different for each person and the transition form also changes completely. Of course, the treatment method changes according to the patient’s state of outbreak or the situation they are in. Doctors have also started to be cognizant of the difference in a cancer’s prognosis depending on the individual and in what situation the cancer occurred. In the same vein, the shock that Howard Moskowitz’s experiment brought was very significant. This was not a simple matter of experiencing various spaghetti sauces or mustard. It provided a new opportunity (it served as a new momentum) to find out who likes what, what kind of diversity people enjoy, and how changeable individuality and preference are. In other words, people who used to be hung up on the rules of universality and generality have finally started to be aware of differentiation and individuality. Furthermore, people like Moskowitz started to believe in diversity. Thus, even in areas like marketing where the consumer’s mind has to be understood, people began to be aware of diversity, differentiation, and individuality and became focused on finding it instead of looking for rules of universality and generality.

There are diverse consumers and their desires are fickle Valerie Park is in her late twenties and lives in MokDong, Seoul. She is an English teacher in great demand. Unlike other working people, she begins work in the late afternoon and finishes at dawn. She wakes up late compared to others and goes out to exercise after a bite to eat. She is into walking again these days. When she first began working as a teacher,Valerie was a walking maniac, to the point where every shoe in her closet was a walking shoe. From affordable ones to the best brand products, shoes with all sorts of colors and prices packed her shoe closet. She also got corresponding exercise wear. There was a time when Valerie briefly cheated on the walking shoes, when the marathon fever was at its peak. She drove the walking shoes to the upper corner of the shoe closet and she began to fill up the spots that she could reach easily with running shoes and marathon shoes. When there was as much running equipment as walking equipment, Valerie returned to the world of walking. She is torn every time she opens her shoe closet. This is because she is haunted by the running and marathon shoes that cannot run anymore. Sometimes she wonders whether she should rotate walking and running? Valerie wants to run when she walks and wants to walk when she runs. Some might ask why walking is so different from running, and couldn’t she just wear anything and walk then run? But Valerie’s mind is different. Valerie will probably run again in the near future. Maybe she’ll become captivated by athlete Ja-in Kim and change her sport to sports climbing. If there was someone like this around you, would you say she was fickle or that she was full of

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curiosity? As seen in Valerie’s example, the human heart changes by the minute. Sometimes it is illogical to the point where one does not even know one’s own desire. It is distinct and cannot be described as typical. Humans are complicated beings with the most democratic/liberal and ever-changing preferences. Thus, the information psychologists have gained about people through a long history of research and various experiments often becomes useless. This is because not only is the information not 100 percent accurate, but also because the same person can change depending on the situation, the issue, or one’s mood. It is not because the science of psychology is imprecise. Rather, it is because all people are different and even the same person shows different thoughts and behavior depending on the situation. Listen to Moskowitz’s story again. He says people looking for food’s universality were not making a simple job-related mistake. He says this is because we have “neglected our own desires.”3 Let’s say we are researching coffee. We ask the participants in the research to pick one brand that can make everyone happy and make them rate the results on a scale of 0 to 100. There will most likely be an average of 60 points. If we pay a little bit more attention to our own desires, the research situation would have to change as follows. Instead of making the hasty generalization that everyone participating in the research will be alike we would have to divide the people into three or four groups with similar desires. Then we would have to ask each group to rate the coffee. If the experiment proceeds in this manner, then the average score of being happy with a particular brand of coffee will change. It might be divided into groups that gave a score of 60 vs. a group that gave a score from 75 to 78. The fact that groups differ from 60 to 78 on a particular brand of coffee proves that the satisfaction each group experiences from tasting the coffee is different. People react differently regardless of what object induces the reaction. The most beautiful achievement Howard Moskowitz gifted us with is how he showed this fact through various food products. He showed how different people are from each other and how various their desires are based on their tastes.The various food products we consume are nothing but a way to satisfy our diverse desires. The 2002 Economics Nobel Prize winner, Professor Daniel Kahneman, pointed out that this is because people are not rational beings, but have irrational tendencies. He said that people do not make rational decisions and they try to avoid loss, that they behave irrationally in their decision-making process when it comes to normal economic behavior. Even if it is an identical situation, the user’s reaction changes depending on how the information is presented to the user.4 The outcome of the lives irrational people have is diversity. Diversity is a characteristic of all organisms with life. It is the primary adaptive method organisms choose to survive as they evolve in a changing environment. Put another way, understanding diversity is essential knowledge we need to adapt to the changing world and can also be an indicator of how the world changes. If a company wants to survive in a changing environment, if it is a business that dreams of becoming better tomorrow, it needs to realize how diverse its customers are. It is necessary to

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know each customer’s different desires. This is the consumer segmentation utilized to accurately understand the consumer’s mind.

Focus on the consumer’s mind What do Moskowitz’s spaghetti sauce research, Nongshim’s Shin Ramen Black, and Paldo’s KoKoMyun have in common? Each of these cases show how hard businesses work to know the consumer’s mind and how important knowing the consumer’s mind is for the business to succeed. The company that knows the consumer’s mind well will succeed and make more consumers happy. Prego’s spaghetti sauce made many Americans go wild and Paldo’s KoKoMyun was seized by Korean housewives. However, if a company relies on the marketer’s unfounded assumption without knowing the consumer, then nine out of ten times the company will fail. Shin Ramen Black, which emphasized itself as a health food, was a case like that. It is the same if you think of it in reverse. If a company cannot sell a product or service well, then that is because it does not know what the consumer wants. In order to understand the consumer, businesses first need to recognize fully that the consumer’s desires are diverse. Malcolm Gladwell has said at a TED lecture, “Corporations are ignorant about the consumer because they always overlook the fact that the consumer’s desires are diverse.”5 The following are conventional ideas business people have about the consumer’s mind: Convention 1 Companies believe they understand the consumer’s mind. In their own way, they actually try very hard to understand the consumer. However, in most cases the consumer mind that companies know is what they have vaguely imagined or is only the reflection of their positions. Companies believe they have made a product that appeals to the consumer based on thorough research and if it by any chance does not sell they make excuses blaming advertising, promotion or marketing instead of thinking that the reason is because they did not understand the consumer well. Or they contend that it is because the market conditions have changed. However, this is something that happened because companies have neglected what the consumer wants and tailored the consumer’s desires as their own desire. Let’s recall the story of The Princess and the Moon that was mentioned earlier. It wasn’t the king, the queen, experts, doctors, or loyal lieges that read the mind of the princess who wanted the moon. The only person who understood her was the jester who understood the moon from not his but her perspective. Convention 2 Companies think that although it cannot satisfy everyone’s desires, it can give the majority of people great satisfaction. Companies believe that no matter what time or place, the reason hit products are made is because they satisfy a lot of people. Therefore, they go all out to develop a

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product that satisfies the greatest number of people. However, an item being a hit is only the result. It is only that people mistake the result as the process and think of it in reverse terms.This is the blind spot in the consumer research carried out by companies. People’s desires and tendencies are diverse. Therefore, it is right to think that there is always a possibility of success in the market. If a lot of people concentrate in a particular field or that special something does mean that the product’s probability of success or chance for establishing itself in the market is guaranteed. Convention 3 Companies or marketing experts do not think they know exactly what the consumer wants, but they habitually and automatically do surveys and interviews. This kind of behavioral pattern happens because they dimly think that if they research diligently something important will come out of it, without knowing the exact research objective. Sometimes they assume that consumers know exactly what they want so they will let them know what they want as well. And they try to grasp the consumer’s mind through surveys and interviews. It becomes a situation where they do not believe it completely, but sometimes they are betrayed by what they believe. There are many marketers who stick to the existing method of marketing research or surveys and FGIs despite feeling skeptical about them because there are no suitable alternatives. It is no wonder these people are in a dilemma.This is something that happened to me some time ago. I met someone who was in charge of research at a snack company. He also had negative thoughts about consumer research. He said in his company’s case, they made trial products, asked teenagers to rate whether they would buy the product after they had sampled it, and released the product with the highest purchase intent score. The company liked to use the method of meeting the actual consumers, observing their choices, and gathering the results. As can be seen from the example above, there needs to be a different method from the existing survey research or FGI in order to find out the consumer’s mind. However, reality is not like that. Since even consumers do not know what they want, marketing research inevitably becomes a game looking for the answers to a survey that was designed according to the company’s purpose. It is also easy for consumers to reply from the perspective of the corporation. It becomes difficult for both businesses and consumers to discover what they really want. Therefore, a new way to read the mind, that does not depend on existing simple surveys or interviews, should be studied to know the consumer’s hidden desires.

Good questions induce good answers Around 1:30 am, a drunken young man is standing underneath a streetlight. He sometimes gropes the floor as he looks around. He is looking for his wallet.

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But there is no wallet no matter how many times he looks. He thinks this is because of the dim streetlight (Figure 4.2). So he thinks, “I’ll be able to find it soon when the day breaks and it becomes brighter,” and he sleeps against the streetlight. Even though he is drunk he will not give up the expensive designer wallet his girlfriend bought him to congratulate him on his employment. At daybreak he opens his eyes wide and he looks around. He looks around while sitting and he looks around while standing, but there is no wallet. Actually, he lost his wallet last night at the entrance of the dark alleyway. Will he be able to find his wallet in good light under the streetlight after losing it in a dark alleyway? The problem of businesses and marketing is the same. Companies claim that they do marketing research and surveys to know the consumer’s mind, but they do not know the actual essence of marketing they talk about. Marketers’ efforts to find what the consumer wants and turn it into a decent product are praiseworthy. Unfortunately, the consumer does not know what the consumer’s real desire is. It is no good mobilizing marketing research methods such as surveys, FGIs, in-depth interviews, and field research. The reason is simple. The marketer and business people are not exempt from the tendency for hearing what they want to hear and seeing what they want, from the planning stages of consumer research to the interpretation of the research results. They naturally tailor the consumer’s mind without having any doubt, thinking it is probably like this and that. No matter how many times the results are combined and analyzed, their minds wouldn’t be changed. It is no different from the behavior of the drunken man looking for his wallet under the streetlight. What is the reason then that the typical marketing research is continued, that useless stories that appear as if they are the answer are emphasized, and

FIGURE 4.2 A man looking for a wallet underneath a streetlight: “Huh? It’s supposed to be here …”

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that conventional ideas are endlessly repeated? This is because, as they classified their consumers, they did not ask how they understood the situation they faced or why they engaged in that action. They did not ask clearly and just tried to manufacture the answers they wanted. The core is asking questions. The truth that clear questions lead to clear answers is valid in the case of marketing research as well. The quotation “If there is no question then there is no answer” are the words of Gertrude Stein, which show how important the role of questions is in improving marketing knowledge. Questions lead to answers. Questions not only help interpret information that has been gained unintentionally, but they also become a means to discover a more in-depth meaning. The order of questions is as important since it decides whether or not some information or knowledge can be gained. Like this, the marketing manager’s question strategy has a significant impact on the ultimate knowledge that can be gained about consumers. If the strategy changes then the insight that can be gained also changes. However, most management focuses on the answers and results rather than the questions and the beginning. In order for management to reorganize the mind market, they have to treat both the question and answer as important. They also have to know that question and answer are interdependent. This is because the question’s form decides what kind of answer will be gained.6 All research activity begins with clarifying what the exact problem is. Research methods are simply a variety of ways to reach the answer to a defined research problem. Using a novel research method has no real meaning if it is used in a situation where the research problem is unclear. It is likely to be research for research’s sake. One of the most representative research methods in psychology is experimental study. It is a useful method when the research subject is clear and operational definition (defining a concept a researcher is trying to measure in measurable terms) is available, and other factors, excluding the variable being measured, can be controlled. However, it doesn’t really help if the research problem is unclear or when studying human behavior in the complicated condition of reality. The operational definition itself is not clear. Unsound operational definition generates a forced conclusion. Not only is the validity of the research result called into question, but also it is not the answer relevant to the problem that needs to be solved. Instead of trying to explore people’s minds using the experimental method of operational definition, it is necessary to understand the condition of each different person’s mind. It is necessary to check first what kind of belief or thoughts they have. In the early stages of research, it is more effective to choose a qualitative research method instead of an experimental study when exploring people’s minds in everyday life. It is possible to gain a more practical and valid research result. Qualitative research methods do not presuppose what factors influence the phenomenon. If experimental study explains the factors that influence the phenomenon after simplifying the factors as much as it can, then qualitative study acknowledges the complexity of reality and tries to understand the phenomenon itself as much as it can. Through the qualitative approach, the researcher can clarify the validity and practicality of the research itself such as, why is this research being done, and how does the research

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result help solve problems in life? Experimental study is more appropriate for verifying something that is already known. However, qualitative study will be more vital when developing a new product, establishing a new marketing strategy, or pioneering a new market. If the validity and pragmatism of solving a practical problem cannot be secured, then it is likely to be research for research’s sake, regardless of how brilliant and precise the experimental research method is. Let’s recall the hula hoop consumption phenomenon from The Hudsucker Proxy. What kind of hypothesis could be made here? What kind of pattern can be discovered? After formulating a hypothesis and asking a question, we are finally able to share the problem.We are able to study and investigate a phenomenon on our own. We are able to discover a pattern and gain insight. The Hudsucker Proxy is the same. They created the hula hoop, but the response was cold.The 4Ps of marketing didn’t work either. Right at the moment they were going to give up, a cute, blonde boy appears and swings the hula hoop in a big street where there is a high traffic of kids passing by. In an instant, there is a boom. The hula hoop, which was a nuisance before, became an it item. Well, what kind of question can we raise here? First and foremost ask how (marketing strategy) can we make the hula hoop (a particular product) appeal to children (the consumer group that best relates to the product)? It means that, instead of simply asking the consumer phenomenon, how this can be used from a marketer’s perspective should be asked first and the answer to this should be requested.

Howard Moskowitz’s rule-developing experiment When Howard Moskowitz chased everyone related to the food industry and said, “There is no perfect spaghetti sauce that suits everyone’s taste,” marketers refuted him by saying,“What is he talking about?” Let’s recall the time Pepsi consulted him to find the most appropriate level of sweetness for their Diet Pepsi. At the time, Moskowitz was certain that there was an optimal level of sweetness many people like and thus he expected the distribution of the public’s preferred level of sweetness to have a convex shape in the middle, that is, a bell-shaped curve. He thought both ends of the bell curve were levels of sweetness people didn’t prefer and that the level of sweetness in the middle part of the graph was what people best preferred. So he believed it would have the greatest number of responses. However, the result was surprising. The preference curve was an uneven shape.The bell curve with a convex middle portion did not appear. It showed that there wasn’t one group that liked a particular level of sweetness, but that there were many groups, such as a group that liked the level of sweetness at 8 percent, a group that liked the level of sweetness at 10 percent, and a group that liked the level of sweetness at 12 percent. There wasn’t one perfect level of sweetness, but many perfect levels of sweetness. It is no longer surprising for marketers to be asked to plan diverse marketing strategies according to each target group. However, it was not long ago—back when people thought everyone would seek out one perfect spaghetti sauce—that this idea was a completely different way of thinking. Back then, marketers believed

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with certainty that the perfect consumer group and target group existed. One product or service and one marketing program can never satisfy all consumers.This is because there are consumer groups each with different desires and the target group can be many not one. Therefore, it is necessary to raise the problem of how to apply what marketing to many different target groups, and whether many target groups will be hit all at once or if the marketing needs to be applied consecutively. This is precisely the key point of consumer research and marketing research. Moskowitz had a lot of worries in the beginning. He agonized over how to make a new product appeal after grasping the consumer’s preferences. And what he developed as a result was the rule-developing experiment. Moskowitz applied this method in developing a new product. First, he mixed the elements of the new product to make many prototypes. He made the consumers use the prototypes and found a fixed pattern in their response. If the survey is conducted in this way then there need to be tens to hundreds of people in the survey according to the number of products being tested. If there are ten prototypes, then the number of people needed for the survey becomes a hundred, if each product is tested just by ten people. This kind of experiment finds each different taste, such as sweet, sour, refreshing, hot, as the result from people who have sampled the prototypes. After finding these flavors, Moskowitz classified people’s responses. He grouped together people with similar reactions when it came to the property of discernment. It is finding a fixed pattern in people’s reaction to the various prototypes. Most of the data analysis used for marketing research or psychological experiments is ultimately people’s responses classified and grouped together. Sweet flavored items are grouped with sweet items, sour flavored items are grouped with similar products, and mild flavored items are grouped with mild items. But Moskowitz’s method was a little different. He did not group the flavors but the people with similar reactions to prototypes. And he developed the most popular product for each of these groups. Let’s say there are groups A, B, C, D. Without a doubt, each of these groups’ preferences will be different. Therefore, the popular prototype for each group will be different as well. Like this he found the most popular prototype for each group and developed this prototype as a product. Ruledeveloping experiment is different from typical psychology studies on this point. Of course, making various prototypes and observing people’s responses to those prototypes is similar to existing psychology research. However, there is a big difference here. Moskowitz did not only look at the difference in responses that people showed about each different prototype. What he really wanted to know was what kind of people are the people who show similar responses? He focused on people’s characteristics, not responses. No matter what product he was developing he considered people first.

Segment consumers with Mind MRI Let’s look at the new product development process Moskowitz carried out. He first sorted out similar characteristics among survey participants. He classified customers

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FIGURE 4.3

Rabbit or duck?

by grouping those with similar characteristics and then developed the most popular product for each group. Moskowitz developed new products through this method of consumer segmentation. How did he discover people with similar characteristics? What were the criteria he used to group people? First, he grouped, not similar flavors, but people who had similar distinguishing characteristics. That is, he grouped survey participants with similar beliefs or similar behavior. We say the mind is alike when thoughts, beliefs, or actions are similar. Moskowitz focused on this point. If he could group people with similar minds, then this group would show similar psychological tendencies. Let’s take a break and look at Figure 4.3. Is it a duck or a rabbit? At a glance it looks like one drawing, but there are two interpretations available depending on how you look at the drawing. If you focus on the face, you can see a rabbit lying on the grass but if you look at it from the bottom left corner to the top, you can see a duck.This drawing is commonly used when trying to show how an identical object can be seen differently depending on personal experience. This is because each person sees differently and what they see is also different as well. The drawing before one’s eyes being seen as different for each person while it is being looked at together is precisely what a psychological phenomenon is. Psychologists study how different people think and feel about identical phenomena, consumer psychology is in a similar vein. It is like looking at the rabbit or duck drawing and trying to figure out what it is. Studying consumer psychology is understanding in what particular way, what particular object, at what particular moment stands out, to which particular person stands out. Mind MRI, one of the psychology research methods, is a technique that groups together people with similar psychological aspects, such as beliefs, behavior, and thoughts. It is a way to confirm on which aspects these people have similar beliefs, behavior, and thoughts. It is called mind MRI because it is said to scan people’s hidden thoughts and behavioral tendencies like the MRI that scans the body’s internal features. This method is similar to the work of profiling in criminal investigation services. Then how can we take the mind MRI of a particular consumer group? The brain activity photo in Figure 4.4 shows two people responding differently

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FIGURE 4.4 Brain activity of a normal woman (left) and a woman with bulimia nervosa showing her low brain activity for controlling food intake

to food: a woman who lives a normal life on the left, and a woman who has bulimia nervosa on the right. Even at a glance, it is obvious that the brain area that becomes activated is different when food is present. We can tell that a particular brain area becomes activated, but it is unclear what that means. In order to find out what this kind of activation signifies, it is necessary to know that something which has established itself deep inside the human mind, that something which is not able to be seen: what makes someone decide to do something. That is, it is necessary to know the mind’s content and what kind of significance it has in what cognitive context. Mind MRI is a research method that discovers exactly that. Under the assumption that people accept each object or issue differently, taking mind MRIs is a way to check how different and diverse they are. Each person’s different mind is expressed in each different image. After checking precisely what image each has accepted differently, that image is drawn out as the mind’s road map. Mind MRI is composed of six steps. The most important is the first step. The first step is clarifying what problem needs to be investigated, or why a particular issue or event needs to be investigated. The second step is looking for various phenomena and clues around the issue that is the subject of investigation. These are called attention clues. Attention clues are mostly expressed as particular words, phrases, or images related to the subject of the investigation. It can be seen as playing a similar role to the many prototypes that were used in Moskowitz’s rule-developing experiment (in taking a mind MRI, various attention clues are used instead of prototypes). The third step is scanning the person’s mind, like taking an MRI using attention clues. In the process of scanning each person’s mind, it is most important to express an individual’s subjective response as objective.Various statistical procedures can be used for this, such as factorial analysis, cluster analysis, or individual variation analysis. In steps four to six, people whose minds are scanned using attention clues are grouped with people who are similar and people are classified around clues that are thought to be similar. This stage is identical to Moskowitz’s research method that tried to know what kind of people the people who show similar responses were.

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In this stage, it is confirmed who the people with similar responses are through attention clues and the psychological traits they have in common. In a word, mind MRI is the process of scanning each different person’s mind using attention clues. People with similar behavioral patterns are grouped and their minds are confirmed using attention clues that reveal their particular traits. Thus, it is possible to understand the minds of each group with each different characteristic. There is a positive to knowing that each different group has different thoughts. It is possible to know that a particular marketing strategy does not have an identical impact on everyone. Consequently it becomes necessary to study the effective strategy for each different group. Consumer-centered marketing, marketing that considers the consumer, finally becomes possible.

How to discover each different mind Some major department stores have a consumer consultation office. At the reception desk, smart young woman hands you a waiting number ticket. After receiving the ticket and going through a glass door you enter a waiting room where maybe ten women and three or four men are sitting reading an ebook or enjoying a hologram image.Thirty minutes later it is finally your turn.You go to the room with the number that is on the electronic display. It is room S-1.You put the ticket into the machine that is installed at the entrance and sit in the chair provided. In front of you there is a machine that looks like a full-length mirror and on the right there is an information input machine. On the left of the chair there is a vending machine where you can get a simple beverage.You pick iced coffee and have a sip.You wear what looks like a motorcycle helmet on your head, enter your details into the information input machine, and turn on the switch that is on the full-length mirror. For a while you may hear a melody, then a size B5 paper comes out from the input machine. Dear customer, you are looking for an early fall party look that will hide your stomach and make you look a bit taller. Cleopatra’s see-through black dress CR8902 on the middle portion of the second floor luxury hall is recommended. MD Audra Kim is waiting for you. This is not a science fiction novel. It is a scene from daily life in the near future. It is a sketch of you being able to buy something that fits you perfectly without being harassed by the enticements of salespeople and without having to explain in words of one syllable what you are looking for. There is no need to worry over whether to buy this or that either. A kind machine understands your mind and suggests a solution. A machine that scans not only your mind but also your desire! Maybe it can be imagined as a personalized and mechanized version of taking a mind MRI. It is an evolved version of a machine that investigates people’s minds instead of investigating general and universal phenomenon, according to numbers. Taking a mind MRI discussed in psychology is no different from this. It is a theory

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that solely depends on people’s minds being different and discards existing marketing survey and psychology study methods, as well as the assumption people’s minds are different according to socio-demographic criteria such as sex, age, and living area. If there is a difference in mind, the issue and interest in a problem or thoughts also changes. Therefore, there is only one important thing left for both people carrying out the experiment and the people participating in the experiment. It is the scanned mind.

Taking a mind MRI, like taking an MRI to read a consumer mind Is it possible to see how someone’s mind is, just like taking an MRI? Maybe the person asking this question thinks this is something that is hard to do. However, as psychology has gained a long history, it is possible, to a degree, to scientifically comprehend people’s minds. What is most commonly known, and what has been used the longest, is the survey method. It was a method used in the late nineteenth century when Wundt first established a psychology lab. This method is the researcher deciding what he wants to know in advance and checking the respondent’s mind. It is clearly useful from the aspect that it inquires about the mind, but there is the danger of the researcher only looking for what he wants to see. This is because people’s minds are classified randomly according to sex, age, or vague responses. For example, it might be convenient to use a survey form when the choices are clear, such as choosing candidate number one or candidate number two. However, when it is unclear what the choices should be, and what the problem is, the survey itself could become meaningless. It is not possible to figure out the respondent’s mind by survey designers randomly setting up a problem and researching it. In consumer research, looking into people’s minds did not improve beyond using a few more statistical methods other than the survey method. Then various methods, such as FGI or ethnographic methodology, were used. However, there were still limitations in understanding each individual’s diverse mind. Like taking an MRI, taking a mind MRI is another attempt to overcome these limitations. Or rather, it is getting rid of the simplistic statistical method that assumes a normal and average person, and is a way to show each individual’s mind as it is. In medicine, there was already a long-standing attempt to lay bare the body that cannot be seen, through X-ray and MRI. Similar research activity to this is taking a mind MRI. A typical marketing survey compares and classifies each group according to demographic variables, such sex and age. In comparison, mind MRI is based on psychography. It starts with a proposition that people have fundamentally different desires. The differences have to be mapped out by their characteristics. Mind MRI is a way to capture each group’s different characters. It is possible to check how different they are even though they belong to groups of the same sex or age. The real difference in minds comes from the psychological, not the biological or sociological.

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Mind MRI’s methodological assumption and analysis procedure The most important thing in taking a mind MRI is not the research participants’ socio-demographic attributes, but each person’s particular psychological characteristics. The biggest difference compared to the survey method is that it tries to find out what each person’s psychological characteristic is, that is what the individual difference is and not the average person’s mind. There is something that is absolutely necessary to understand this kind of psychological characteristic.That is each different response clue that distinguishes each different person’s characteristic. In order to check the diverse responses that people can show related to a particular research problem, the variety of research clues that can show these diverse responses well is important above all. Research participants reveal their psychological characteristics that are different from those of others through these response clues.

Research process Respondent selection: In order to know how many different cognitive frameworks exist on the research subject (phenomenon), sample respondents without presupposing particular factors or clusters. Survey question construction: Construct/design questions that can find as many diverse subjectivities as possible since it is more important to include these than recruit a large number of people. Interpretation of sampled factor: Based on the sample data, confirm the cluster of people who showed similar responses by factor analysis. They should be interpreted by the context and significance of each group that shows their particular characteristic. Hypothesizing process and investigation: Produce hypothesis through a factorial interpretation process, instead of a given presupposition; solve problem and gain understanding of actual phenomenon through hypothesis. In taking a mind MRI, the step that makes each distinct psychological characteristic appear as an action is response collection. Each different response of people participating in the research is collected through using various stimuli, such as attention clues and response clues. In order to analyze this material, a special statistical analysis technique called Q methodology is used. The statistical analysis technique called Q methodology classifies respondents according to how they responded to each different reaction clue (Figure 4.5). First, the reaction clues are called sample Q. Like distinguishing the sample and population in statistical data collection, people’s responses are thought to be responses to various stimuli and are considered samples to the stimuli. Similarly, research participants are called sample P. They are separated like a sample because it is a small

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FIGURE 4.5 In Q methodology, participants sort clues (questions, pictures, sounds) in order of preference

group of people out of the entire population that participated in the research. In Q methodology, the stimuli and the respondents are all considered to be samples because the focus of attention is to identify the characteristics of people. The Q samples used as attention clues are normally expressed as text or words in questions. However, at times stimuli such as pictures and sounds can also be used. A variety of attention clues can be prepared by the researcher depending on the topic or issue being studied. Q methodology proposes an analysis result using a statistical analysis algorithm that is similar to that of a factor analysis. The researcher’s findings are confirmed by what type of factor analysis result each different mind gives. It is similar to a doctor who diagnoses disease by taking an MRI and uses the MRI image to distinguish whether the other body parts are normal, and the onset of the disease and its characteristics. It tries to find out how each different person responds to the various attention clues related to the particular subject matter. In this case, a mind MRI checks each different attention clue and people are classified according to what factors and knowing what those are. When we take an MRI of our bodies, each body part is expressed in different shades of black and white. A particular body part’s shading shows how different it is compared to the image of a healthy person without disease, or can indicate a certain tumor. Similarly, other respondents’ minds related to a particular topic or issue can be confirmed by taking a mind MRI. In Q methodology, it is possible to separate each different respondent’s mind by factors that are different from each other. It classifies people who have similar reactions related to a particular subject as one factor. Of course, the attention clues that best express these people are also divided into each different factor. Usually, factor analysis is a statistical technique that does not distinguish whether a factor represents people or attention clues. It treats all factors as simple representations of statistical variables. It is not interested in how differently what kind of people, with what tendencies, responded to these variables. This is because factor analysis is used to simplify a complicated and diverse number of variables into an easier and simpler number of variables. However, the result of Q methodology that applies factor analysis algorithms, a statistical analysis technique, is slightly different in its form from the result of the regular factor analysis. The similar aspect is that, above all, variables similar to the factors that are extracted from factor analysis can

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be found. In Q methodology this is separately named as a type, but the difference is not in the name.The character of these factors is distinctly different from the factors in common factor analysis. Factors in common factor analysis reduce complicated variables into something simpler to make them more comprehensible. However, in addition to this, Q factors also help separate and how different the person who responded is from the attention clues. It is possible to know who responded and how differently to what attention clue. Since these results can be gained, if the Q factors are well interpreted, it is possible to know in greater detail how each different cluster is different and what their psychological characteristics are. Q methodology that confirms which people show similar characteristics, and the attention clues that best reveal them, is called the subjectivity method. It is a useful research method when trying to understand various psychological characteristics, such as people’s beliefs, behavior, sentiment, and thought. Regardless of what the problem is, it is relatively easy to solve the problem if each different person’s mind can be better known. Normally the key to the problem can easily be found, whether it is a relationship or a social conflict, if each other’s different mind is considered. Insight into the problems we face and the strategy that can solve these kinds of problems can be found like this.

Charm is the strategy What is different about a marketing strategy that uses the mind MRI technique? Is it possible to establish a marketing strategy for a particular product or service using the mind MRI technique? Before answering this question, there is something that needs to be checked. It needs to be recognized that there is no best product that satisfies everyone and that an optimal consumer group that corresponds to the current product or service does not exist. This seems to contradict the common marketing idea of trying to find a target consumer group. No, it appears as if it does not consider the target consumer group. However, it does not completely disregard target consumer groups. It only means that the target consumer group is not fixed from the beginning, but rather the target consumer group is chosen from the many consumer groups that can be confirmed through the mind MRI technique. Most people agree with this, “Yes, a target consumer group can be chosen from the many consumer groups.” When developing a new product, what would happen if it were made to appeal to people with certain tendencies from the beginning? When this is said, many people worry and say that it wouldn’t sell very much. They think this way because the profit to cost ratio has to be considered. It is also a moment the spirit of going along with it is displayed, thinking that although a bland product will not be a big hit, there won’t be any big danger in it. When Apple first developed the iPhone who did they target? Did they target everyone who uses a cell phone? No. They developed the iPhone for people who have a lot of interest in new technology and design, people who want to enjoy the feeling of being different from everyone else.

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They fully understood that if they made something that had a clear meaning for certain people, and if those people who used that something looked cool, that something would spread. If a person who everyone wants to imitate is created then the rest of the public is bound to follow automatically. The mind MRI method makes the respondent choose and categorize what they think is more important among the many comprehensive questions. It determines how each person’s mind appears as a different pattern in a diverse context. Here there is an inference/reasoning process that can be the insight to understanding the pattern’s significance. In order for it to be a meaningful insight, the subject and the objective of the question the researcher asked needs to be clear. The researcher needs to consider what kind of answer the patterns that are the research findings can give to the original research question. Strategy comes naturally when patterns are perceived. Strategy is bound to come naturally when the phenomenon, issue, and the pattern in the issue are perceived. This kind of strategy is effective in a society where the tendency to react sensitively to general trends is strong, and the tendency to follow those trends is strong. If a particular product or service that is appealing to a particular consumer group is made, then it soon spreads to diverse consumer groups, or spreads like a trend. No matter what it is, if it grants a clear meaning to a particular group, then it has the power to spread on its own. This is because it becomes an appealing something that has a clear identity. From the next chapter on, I aim to observe how people’s minds that have been grasped through various studies are applied when planning specific marketing strategies. In order to carry out this task, I have selected a sporting activity (baseball) and cell phone (communication service) among various consumption areas and activities as most representative of the diversity in Korean society. Truthfully, only a few years ago professional sports were thought of as services that major corporations engage in for publicity. However, the circumstances have changed. Now people think that the sports teams themselves should be companies with autonomy. Under this change of thought, my research team looked into the marketing strategy of one pro baseball team that reached over a million spectators and was expanding its fan base with the lowest number of games in 2011. It investigated how elaborately consumer psychology research is progressing in the intangible consumption area of sports through the marketing strategy that was used to draw spectators to the ballpark and where that could be applied. Another mission was granted from a domestic communication firm. Korea’s communication service boasts world class quality. However, it receives complaints and criticism from domestic consumers who say the communication service fees are too expensive. I began the research doubtfully as I received the more or less absurd question, “Would it be possible to reduce the complaints and confusion if the bill for communication services is better designed?” However, as I researched the correlation between communication fee and consumer psychology, I was able to organize Korean lifestyles as a result.Through completely different consumption activities of baseball games and mobile communication fees, I was able to find out

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that consumer psychology research not only helps us understand our own lives, but it can also be used to establish marketing strategies and be applied in the marketplace. I hope reading the two case studies in Part II will also be an enlightening experience for the reader.

Notes 1 2 3 4 5 6

No one can resist the taste of Koko-myun, Money Week, Dec. 23. 2011 “Kokomyun” number 1 hit item of 2011, ETNEWS, 2011 http://www.etnews. com/201112070092 http://www.ted.com/talks/malcolm_gladwell_on_spaghetti_sauce/transcript http://en.wikipedia.org/wiki/Prospect_theory http://www.ted.com/talks/malcolm_gladwell_on_spaghetti_sauce/transcript HOW CUSTOMERS THINK: The truth hidden beneath mind of customers, Gerald Zaltman (Noh Gyu-hyung translated) 21st Century books, 2004

PART II

Mission: case studies

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5 MISSION: CAPTURE THE HEARTS OF SK WYVERNS FANS

Analyze the mind of baseball spectators Someone approached me while I was leaving the lecture hall after giving a lecture about new generation consumer psychology to SK Wyverns’ board members. He introduced himself as CEO of SK Wyverns and asked me whether the concept of new generation consumer psychology could be applied to identifying sports fans coming to baseball stadiums. I was puzzled not knowing why or what he was asking about. He summarized the following: • • • •

There is a professional baseball team called SK Wyverns. This team’s home base is the city of Incheon, South Korea. SK Group acquired this team about 8 years ago, it was formerly known as the Sammi Superstars. As CEO of SK Wyverns, he was extremely concerned about how to get more spectators to come to the baseball stadium and watch the game.

I did not know much about baseball, nor was I that interested, however I was fascinated by people who flock to the baseball stadium with their friends, family, and lovers. People gathering where it is hot and crowded to scream, cheer and sometimes get into a fight with the person next to them, was unfamiliar to me. I wondered why those people asked for trouble when they could sit in their cool living room and watch it on TV. There may be something that I didn’t know about the baseball stadium that drew people. But no matter how you looked at it, it was clear that I was an outsider when it came to baseball. So I had no choice but to listen to his story in silence. Actually, the team name, SK Wyverns, was strange to me. I learned for the first time that the team’s home town is Incheon and its base is Incheon’s stadium.

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FIGURE 5.1

SK Wyverns’ main emblem drawn by a baseball fan

At the time SK Wyverns was performing well, unlike when they were the Sammi Superstars. They had already won the Korean series and were expecting another consecutive win.As the home town team did well, the number of spectators increased gradually. Approximately 10,000 spectators came to see the game. Previously, SK thought even 5,000 people per game was a lot.The increase indicated that the number of spectators grew as the team did well after SK acquired and reorganized the team. However, SK Wyverns was not satisfied with 10,000 people showing up to a stadium built for 30,000 people. The team’s worry was how to attract more spectators. The mission they gave me was to find answers to the following questions: •

•

• •

How can more spectators be drawn to the stadium? To gather more people to the stadium, it is necessary to expand the baseball spectator base in the Incheon area. How can this be done? What kind of consumer group comes to the stadium now and what is their sentiment/psychology? Is it possible to categorize baseball spectators into consumer groups? Which consumer groups are actively participating in baseball games? Who is the potential spectator group that needs to be drawn to the baseball stadium? Which consumer group is the spectator that needs to be targeted as the marketing subject in the future?

The CEO was asking what group might be new baseball spectators and how to draw them to the baseball stadium. I did not know much about baseball, but his question drew my attention. I also wanted to know the minds of living room baseball maniacs that live to watch baseball day and night, and of the original baseball fans that go to the stadium at every opportunity.The first problems to resolve were: what kind of people to target to increase baseball spectators in the Incheon area; was it possible to attract people who have no interest in baseball to the baseball stadium? I thought of these problems under the framework of consumer psychology. If it were possible to find the different consumer groups related to baseball consumption, then this problem could be easily resolved.

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Consumption phenomenon is one social phenomenon that occurs in our lives. If it is possible to know what kind of people comprise each different group that participates in this social phenomenon, then the key to solving the various problems related to that phenomenon will be given. It might even be possible to gain the insight or discernment that is discussed in psychology. What kind of person enthusiastically participates in this activity and who are the people who do not have much interest in it? How can they be made to participate by emphasizing what characteristic? Immediately, many questions came up in my mind. Determining each different consumer group started to feel like research methodology theory that produces social change.

Going to the baseball stadium, watching baseball What kind of people are the spectators that come to the stadium? To find an answer to this question the research problem needs to be set out clearly. If the problem is clear then it becomes easier to find the answer. It is in the same vein as the answer changing if the question changes. If the answer becomes known, then it is easier to find out what needs to be done next. Establishing a marketing strategy becomes simple as well. Marketing strategy is just a fancy way of describing what we can do for whom, and knowing what kind of significance that has for them. If what we intend is carried out properly then there will be a change in their behavior. Unfortunately, there will be not much of a change if what we intend is not carried out properly. I started to look at the questions one by one. • • •

Who is a fan of SK Wyverns? What kind of relationship does SK Wyverns have with Incheon residents as the home team for Incheon area? What kind of consumer should be targeted to expand the number of spectators in the future?

At the time the marketing strategy used by the team was the sportstainment (sports + entertainment) strategy. As a combination of sports and entertainment, it is a concept that says sports should be experienced and enjoyed like other forms of entertainment but at a baseball stadium. It is not only watching the ball game; various experiences are provided, such as fun activities for family spectators, special events, markets for local specialty foods. It is a strategy that makes the baseball stadium stand out, not only as the place to watch a ball game but also as a place to share diverse activities with the whole family.The team wanted to know what kind of impact this kind of marketing has on spectators and on whom it is effective. Moreover, they wanted to know how to be more effective. After clarifying the problem, what the research team did next was simple. They conducted interviews about baseball, the baseball stadium, and SK Wyverns with people who were interested in baseball or had experienced going to the baseball stadium or who worked with the baseball team. They organized the various opinions based on what they had said in the interviews. They collected what people

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FIGURE 5.2

Baseball fans chanting for SK Wyverns

normally think of baseball, their experiences related to baseball, Incheon area people’s thoughts on SK Wyverns and their team management, professional baseball, particular players, and coaches and then made sentences/questions that could express this content in the briefest manner. They combined similar content and created 90 questions to contain almost all the expressions regarding baseball, Incheon, and SK Wyverns. Using these sentences, we scanned people’s thoughts on baseball like we were taking an MRI scan. After the MRI work, we grouped people with similar thoughts. As a result, it was determined that there were six groups and we could observe consumer characteristics, psychology, and thoughts on baseball by group in a more detailed manner. These six consumer groups were categorized by their thoughts on baseball and their baseball consumption tendency. I gave each group a name that best represents their traits: Incheon SK Fan, Baseball maniac, Our brother-in-law, Off-field coach, Lady next door, and Tenth player. What kind of people are the Incheon area’s baseball fans (Figure 5.2)? With what kind of thoughts do they come to the baseball stadium and consume baseball culture? Once it was determined that there were six distinct baseball consumer groups, the answer to how to get more people to show up to the stadium came automatically. The marketing strategy stood out naturally just by knowing what kind of mind the team should target as their marketing objective and how that mind operates. It was a good opportunity to experience the amazing insightful impact of consumer research methodology theory, which realizes and understands clearly the characteristics of various baseball consumer groups.

SK Wyverns fans, who are they? Incheon SK fan What kind of consumer group is the Incheon SK fan? These are people who live in the Incheon area and are fans of SK Wyverns. However, it is only to the extent

Mission: capture the hearts of SK Wyverns fans 85

of acknowledging SK as Incheon’s home team while they are performing well. They are significantly affected by the marketing and promotion done by SK Wyverns. In order to increase their loyalty, some effort needs to be put in. These are fans that enjoy baseball itself and consider it important to a certain extent, but they are not completely head over heels into baseball enough to call it a culture. Their consumer tendency is quite goal-oriented and reasonable. They do not buy tickets themselves and do not spend much on baseball products or souvenirs. They visit the ballpark when they get a complimentary or discount ticket. These are people who will react the most sensitively to the marketing strategy that the team devises.They live in the Incheon area but they have not developed a clear identity regarding Incheon.

Baseball maniac Baseball maniacs are people who are obsessed with baseball: these are people for who baseball is an activity where games are scored and score sheets are kept (Table 5.1) but who go to the stadium only once in a while. They enjoy looking at the various game statistics on the Internet instead of actually going to see the game. For them, baseball is war with data. So they do not cheer a particular team or participate enthusiastically. They value statistics when watching a baseball game and become interested as they analyze the game or the player’s record. They show a maniac-like characteristic, but there aren’t many of them. Usually, these are people who consider themselves to be amateur baseball commentators. However, it is not a group that can have a big impact on increasing the number of people coming to the stadium. They provoke public opinion online as if they were experts, but are only using the

TABLE 5.1 Baseball maniac’s record card Pitcher Season 15 early

R L Total

Season 15 mid

R L

R Season 15 late

L Total R

Season 16 early

Total record

L Total R L Total

AVG

AB

H

RBI

HR

BB

SO

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information gained from the Internet to analyze the team or the player. These are people who value baseball itself more than SK Wyverns. When I first began this research team officials asked me: “Wouldn’t we be able to draw more people to the stadium if we increased the number of people who are baseball maniacs? Please study how to increase the number of maniacs.” However, I was very surprised as I researched consumer psychology related to baseball. Maniacs who loved baseball were not people who enthusiastically showed up to games. Of course, there is no doubt that the people who show an interest in baseball are Incheon SK Fans and baseball maniacs. But how they like baseball and at what level they enjoy baseball was different to expectations (Table 5.2). The Incheon SK Wyverns fan had a greater likelihood of going to the game in person.

Our brother-in-law Baseball fans that are called Our brother-in-law come to the ballpark like they are going on a picnic with their family. For these people, the ballpark is no different from an amusement park or a picnic area. While it is important to watch the baseball game other activities, such as eating chicken and buying a hot dog, are also important. There are actually many people in this group who play with their children—using toys like water guns and balls—even when the baseball game is playing. For them, the baseball game’s output is not an issue. This is because it is more important to go to the playground that is the baseball stadium and have a good time with their family. This group values a family-oriented feeling and grants more meaning to the ballpark visit itself than whether the game is won or lost.What they value are the diverse fun experiences that can be experienced, the variety of events, and the amenities available. So they see going to the ballpark as identical to going to the amusement park. Either way it’s a place to have fun with the family! These are people who see the ballpark as an amusement facility rather than being SK Wyverns fans (Figure 5.3).

Off-field coach Who are the spectators named Off-field coaches? We can guess who they are just by using the information in their name. Most of them come to the ball game with the mindset that they are coaches (Figure 5.4). Not only do they participate in all kinds of assessments about the game at the stadium, but they are true baseball fanatics in the sense that they actively express their opinions on the team’s player management or comment on the Internet or by phone even after the season is over. Above all, they value the game’s results. They watch baseball with the same mindset as the coach and they have a lot of interest regarding the players in the team. They always think what kind of strategy they would use if they were the baseball coach while they are watching a game. They think of themselves going to baseball games as very important, they grant a lot of meaning to it and they scold people who come to a game, questioning why they needlessly come when they

FIGURE 5.3

Our brother-in-law type visits a baseball stadium to have fun with

the family TABLE 5.2 Incheon SK fan, Baseball maniac. Criteria of division: are they interested in SK Wyverns or in baseball itself?

Motto (baseball)

Key words

Characteristics

Incheon SK fan

Baseball maniac

SK should be Incheon’s home team since they are performing well • marketing fan (customized marketing is required) • live in the Incheon area and are fans of SK Wyverns • perceive SK Wyverns as the identity of Incheon • emotional • enjoy the baseball itself not its culture

Baseball is a war with data

Baseball vs. stadium

• stadium in Incheon • SK Wyverns

Propensity to consume

• goal-oriented and reasonable consumer tendency • consuming activity related to baseball is limited

• baseball expert, baseball maniac, baseball data analyst, amateur commentator • into baseball itself • choosing a team is not a issue (it doesn’t have to be SK) • collecting and analyzing the data is more important than emotional attachment • baseball is record, elite sports • own clear philosophy about baseball • present a wall (obsession with baseball blocks others) • although they think baseball is special, they are not interested in the team or the stadium • although they have a mania for baseball, they don’t spend at stadium • usually enjoy baseball on TV or Internet

FIGURE 5.4 Fan-fest created by the Off-field-coach type. They watch the game with the mind of a coach

TABLE 5.3 Our brother-in-law, Off-field coach. Criteria of division: what is the purpose of watching baseball? Entertainment vs. winning or losing

Motto (baseball) Characteristics

Baseball vs. stadium Propensity to consume

Our brother-in-law

Off-field coach

• joy more than result of game • prefer to have joy rather than obsess with baseball • leisurely and joyful life is important • family-guy image • often watch a baseball game with family or friends • does not obsess about the result of a game • convenient facilities in stadium are important • usually go to stadium on holidays or weekends • more like customers than SK Wyverns fans • amusement park • place where they can make a happy memory • show various consumption behaviors at stadium • actively participate in all kinds of events

• must win the game without question • the result (win or loss) of the game is most important • almost same mind as team coach • high participation, not just watching • certain player is higher priority than team record • result is more important than process • not affected by any marketing • have interest in who plays in the team (team squad) • from late thirties to forties

• others are not like me; why do they just watch and play at stadium • doesn’t show any consumption behaviors at stadium (uninterested) • intend to buy their favorite player’s uniform

Mission: capture the hearts of SK Wyverns fans 89

don’t even understand the “b” in baseball? They are similar to the Our brother-inlaw group in that they enjoy going to the ballpark, but they are far fewer in number (Table 5.3).

Lady next door The Lady next door is a group of consumers who think of going to a ball game as if they were going to a concert (Figure 5.5). They are usually called Ahjumssi, a compound word denoting a next door woman, ahjuma, and man, ahjussi. These people do not go to ball games alone, but go with friends or neighbors they can hang out with like they were going sightseeing. They feel great about sitting in groups and doing the wave, and they try to relieve their stress from daily life through the experience. They have a high tendency to agree with and follow other people’s behaviors. Normally their lives are not that dynamic or active. On the contrary, they are alone in their psychological states. Since daily life may be relatively lonely and empty for them, they go to watch the ball game with people they can spend time with as if they were going to a concert. If various events, like singing contests, could be provided at the stadium, it would be enough to attract their attention. For them, baseball is a means to remind them of their youth.They can be seen as a generation who could not enjoy their lives culturally or economically so become baseball spectators to find a new leisure activity (Table 5.4).

Tenth player These people are literally the tenth player.They go to baseball games and cheer the team as if they were a part of it, as if they were one of the players (Figure 5.6).

FIGURE 5.5

For the Lady-next-door type, baseball is a reminder of her youth

TABLE 5.4 Lady next door and the Tenth player. Criteria of division: baseball familiarity (none of my business vs. almost a family)

Motto (baseball) Characteristics

Baseball vs. stadium Propensity to consume

FIGURE 5.6

Lady next door

Tenth player

• baseball is out of my interest

• live and die for baseball

• almost no interest in baseball and isn’t absorbed by baseball itself • baseball = show, an entertainment culture • sometimes watch a game relayed on TV • image of housewife or department head of major company (age forties to fifties) • petite bourgeois and normative • conventional and passive • majority of them have never been to a stadium, but they intend to go to a baseball game if they get a chance • just one of many cultural spaces • petite bourgeois consuming behaviors • willing to open their wallet for popular products

• university students who love baseball • adjust their schedule depending on game schedule • willing to go and enjoy away game • female supporters who love a certain player • able to adapt and accept quickly a new situation • build community friendship through baseball

• the place to see their favorite team and player • maniac consuming behavior • purchase player uniform or accessory

Tenth players: big fans who live and die for baseball

Mission: capture the hearts of SK Wyverns fans 91

From the team’s perspective, these are the spectators that are most proactive and have the highest value. Baseball is a game played by nine players. However, these people act and think like they are the tenth player. They go to the ball game with a player’s mindset although they are spectators. It’s a mindset that lives and dies for baseball. If there is an important game, they skip work and they skip school. They go to local matches and actively and aggressively embrace the various marketing events and new attempts by the team. The tenth player divides their year into baseball season and off-season. However, like other mania groups, there is not a high percentage of Tenth players (Table 5.4).

Consumer psychology for marketing victory Clearly, categorizing the tendency and psychological characteristics of people who enjoy baseball made prejudice disappear. Above all, we became free from the stereotype that baseball was a young person’s sport. Imagining the various baseball consumer groups also became possible. Above all, we also gained an insight into which consumer group had the highest number of people related to baseball and who among those would participate more actively in baseball through a particular marketing activity in the future. Most of the Incheon SK fans that participate in the games could be said to be careful and economical consumers. The effort to increase their numbers is, of course, important. However, this is not the group that can make baseball into a culture. Baseball maniacs are undoubtedly people who are into baseball but they do not actively go to the stadium. Instead, they can use hundreds and thousands of dollars on buying special baseball souvenirs. They are the spectators that are truly meaningful for the team.Therefore, the team will have to make a marketing strategy with these people in mind. Looking at the previous example, it is possible to discern that even if it is the same baseball game, the pattern of how each consumer group accepts it is different. What they value, the desire they have for the game and their spending tendencies are all completely different. Since the specific consumer group has been figured out, it is time to suggest a marketing strategy.The first point that should be considered is who comes to the ball game? On the outside, it seems like the Tenth player and the Off-field coach will come to see the game the most. Following them, Incheon SK fans come to the stadium depending on game results and marketing activities, such as the distribution of discounted tickets. If sportstainment is strengthened the possibility that Our brother-in-law and the Lady next door will become major spectators increases.These two groups are the consumer groups that present the best opportunity for development and expansion according to the marketer’s efforts. SK Wyverns’ strategy to actively draw in new baseball fans with the sportstainment concept works best on consumer groups like Our brother-in-law. The ballpark is a family playground and they come to the stadium as if they were going to the amusement park. Therefore, the club needs to prepare special events for this

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group and make it clear that there are various play activities for the whole family, other than just watching the game. For the Off-field coach, the team’s victories are most important. Since it is unlikely that they will spend very much, it is important for the team to perform well. To make people like the Lady next door come to the stadium, it is important that the ballpark visit is seen as a great outing. The best method is to make a stadium visit seem like a new cultural event. Then there will be a greater boom than going to see a musical. The Tenth player group is the consumer group that has continuously participated.Thus, the team will have to develop many diverse consumer items on different levels. Also, the team needs to focus on the fact that they show maniac-like consumer behavior. That is, they have to make an environment that suits their valuing interaction with the players as the most important event. Tenth players are the group with the potential to be the greatest publicity medium for the team. In marketing, consumer groups are normally categorized by loyalty or degree of interest. According to this, the baseball consumer groups can be classified as above. That is, the criteria has become how deep their loyalty is to the baseball team and how much interest they have in baseball. However, it is not enough to have a vague loyalty or interest because it is hard to be certain that loyalty and interest will lead to specific consumer behavior. Therefore, instead of categorizing consumer groups based on abstract ideas, there needs to be a clear line drawn to the consumer group’s characteristics or their behavior pattern. If the group’s innate property and the context in which their consumption occurs becomes known then it is possible to segment marketing strategies to suit each group. For example, for the Incheon SK fan, discounted or complimentary tickets will work. For the Our brother-in-law group amenities and participatory events will be effective, and for the Lady next door it has to be clearly visible to them that there is value in coming to a ball game by having performances and special events. Of course, these were marketing strategies that were already in the process of being carried out by the team. However, they did not know exactly why these events and strategies had an effect and on which particular group. They probably pursued the marketing activities blindly with the view that they would probably be liked. It is possible that an investigation in consumer psychology is like seeking the creation of new consumer behavior. But what is important above all is knowing exactly what kind of significance the particular consumer behavior that is currently occurring has for the consumer now. This is because when we understand that the meaning of particular consumer behavior is different for each consumer group, we can finally know who the core consumer group is that is currently engaging in consumption. Knowing there are various consumer groups now allows us to conjecture what kind of meaning a particular product or service will have in the future, and what kind of change it will go through. And it allows us to draw an approximate outline in our minds. Of course, we cannot predict all future consumer behavior. It is hard to know exactly how it will change. But if we are able to know the various consumer groups’ characteristics and the significance of the consumer behavior they show, then it is possible to guess who will be the leading consumer

Mission: capture the hearts of SK Wyverns fans 93

group, how much significance their consumer behavior will have and how diverse the areas they consume in will be. It is the reason I argue that knowing the consumer’s psychology comes first regardless of what item has to be promoted, whether it is a product, a sports game, a cultural event, or planning a marketing strategy.

6 REVEAL THE MIND ON PHONE BILLS

Phone bills: light or heavy? Josh Han has returned to Korea after studying abroad in Toronto, Canada for three years. He feels good these days every time he receives his mobile communications bill. Korea’s communication fees are so inexpensive! Josh still cannot forget the time he was overcharged. After setting up his cell phone in Canada and using it as much as he wanted (as he was used to doing in Korea) he suffered a bombardment of fees. From then on he used his phone only to receive calls where possible, and when he needed to call his parents or friends he would always return home and use the computer phone or online communication. After returning to Korea he is using his cell phone as much as he wants again. Josh thinks that Korea is a great country; Josh’s mother, who lives with him, thinks differently. Even though she uses the most inexpensive rate plan, she thinks it is a waste because she never uses up the allowed number of calls or texts. She is prepared to opt out of the cell phone plan if need be, but she can’t even do that because of her family badgering her and saying, “If you don’t use a cell phone you are a Neanderthal.” What is a light rate plan for Josh is a heavy plan for his mother. What is the reason the reaction is so different to an identical service? At least thirty million out of a total of fifty million people in Korea use communication services on a daily basis. Excluding food, drink, and education expenses, it probably accounts for the most spending per household. So what do our country’s people think about the mobile communication service they experience? Are they satisfied with its quality and fees? Korea’s standard of mobile communication service is world-class. It means that any mobile phone calls get through, even in the basement of buildings or in the subway. The service charges are also definitely not on the expensive side relative to other countries. However, Korean people are very dissatisfied. This is because they think first of the service usage fee—that is, the

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communication fee—before the call quality itself. So the feeling that communication services are too expensive and the criticism that carrier companies are enjoying excessive profits become issues. People who believe cell phones should work well in underground parking lots, inside subways, and people who believe that the best quality of service is a given, have a lot of complaints when they have to pay the communication service fees. What in the world is that mindset? Communication fees became a common interest as people started to use mobile phones as necessities. Dependency on mobile communication is increasing every day, so much so that families would rather use their cell phones to talk to each other than their house phone. Therefore, people react more and more sensitively to communication fee charges. Mobile communication fees have become a public utility charge, just like electricity, water, and gas fees. However, people still think communication fees are more expensive than other public utility charges. For electricity, water, and gas, you only have to pay for as much as you use, but for communication fees there are rate plans that set charges on the expectation that you will use X amount per month. It is a policy where even if you do not use as much as you have set out to, you still have to pay the basic rate. Therefore, people who use their cell phones less than others can only be dissatisfied. It is like the example of Josh’s mother. However, in an age where the cell phone has become a business card of sorts, it is difficult to avoid using a cell phone. Cell phones are so much of a necessity that even the government had to support welfare recipients’ mobile communication fees.Yet, many people make an issue of expensive fees and complain to the Korean Communications Commission. Civil organizations are also busy criticizing carrier companies’ excessive profits and unfair expensive communication fees (Figure 6.1). The media even goes as far as pointing out that communications firms are gaining excessive business profits. Reduce the communication fees, they say. But what standard are they using to say that the communication fee is expensive?

What you really feel about the bill Someone who works at the customer service department at a communications firm called me out of the blue. He said, “I don’t know why Korean people cry out that the communication fee is expensive when it is by no means expensive compared to other countries. I want to know the reason why!” I was taken aback by the randomness of the question so I asked why he had made this call.The communications firm employee’s answer was simple, “I thought that you could find some kind of answer to this question in your own way.” Then he added a long complaint, and the summarized version is as follows: Consumers react too negatively to the monthly communication fees. Every month when they receive their bills they call the customer service center and protest that there is no way they could have racked up this much in fees. Actually, most of the customers who complain like this do not understand the content of the bill. The bill has many other charges related to additional services that are unrelated to the actual communication charges.They mistake

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FIGURE 6.1 A civil organization poster showing the mind of It’s-unfair customers. Requesting a cut in cell phones bills, they propose a petition of 1 million people with the slogan “We will invade if you do not drop it”

this for the communication fee communication firms charge. The upset happens because there are too many services it provides as a mobile communication device, and because the communication firm’s bill charges the fees of additional services together on one bill. It is no small distress. After he vented his discontent, he asked if there was any way to resolve this problem? How can we make people accept the communication service they have used as it is? What he complained about was enough to worry over. However, the real reason he called me was very whimsical. His point was: Professor, wouldn’t it be possible to reduce this kind of confusion and complaint if the bill regarding communication services was somehow well designed? Since you are a psychologist, couldn’t you figure out the cognitive

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process of how the consumer understands the bill and advise how to design a bill that wouldn’t be so mentally confusing? Beyond understanding what the consumer’s mind is like when receiving a bill, can’t you help make a bill that appropriately reflects this state of mind? The consumers’ minds that react to the bill will definitely be diverse. However, would it be possible to understand their minds and newly design the bill for the communication service’s details and charges? Is it possible to design a bill that will suit each different consumer’s mind to help each of them understand the content better? This was a first among many requests I have received in the ten years of studying consumer psychology. It was a new challenge for me as well. The work to study each different consumer’s mind regarding communication services started this way. Communication fees take up a significant part of living expenses. Still, many people do not know how each kind of fee is arrived at. They just think that the payment went out because they used it. While person A complains that the 900 minute rate plan they joined is too merciless, person B thinks it is a waste how there are 100 minutes left over from their 500 minute plan. Person C expends a lot of money on monthly installment payments but trusts what the salesperson said; he even thinks that the cell phone device itself was free. Actually, even though the cell phone is not free, most consumers upgrade their phone feeling as if it is nearly free. So they only pay attention to the items like call volume, text usage, and data usage. Person D believes that everyone needs a cell phone no matter how hard their economic situation is. Since the cell phone is a basic necessity for him, he uses the cheapest rate plan possible. Person K believes that the cell phone is no longer a phone, but a mobile multimedia realization device. So he upgrades his phone to the newest model irrespective of the agreement period. Rate plans are outside his scope of consideration. What is the reason each consumer’s perspective and mind are different on the same issue? First, I investigated what the most prevalent thought regarding communication fees was through interviews. I accessed various research data, and reviewed how the controversy over communication fees was occurring in our society. I also studied how consumers perceive the bill charging communication fees and the micropayments they have made through their cell phone. This was done from concern that consumers might not be able to distinguish non-communication fees, such as micropayments, from call fees and therefore think communication fees are expensive. Of course, here the specific question, “Why is there a basic fee charge that I haven’t even used appearing as part of my bill?” is also included. However, what is important is to find out what the clients’ psychology is like regarding communication fees. In order to do that, we first have to find out their thoughts on communication fees. Let’s look at the examples: • •

The three mobile carriers’ voice call fees are, ranked in order of cost, SKT, KT, LGT. SKT feels classier than other firms.

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•

Basic fees and voice call fees take up most of the monthly mobile communication payments. Every time I check the bill I feel that the mobile communication fee is expensive. Even though I have used a particular mobile carrier for a long time, I don’t think I receive any special benefit or discounts. Korea’s mobile communication fee is expensive compared to the service, quality, and benefits provided. I use a free text service like sponsored calls to reduce communication fees (you get a free call service after watching a particular company’s advertisement, which is similar to receiving a free movie ticket or discounts, after clicking on a particular Internet ad; using e-commerce sites like Gmarket exposes you to these kinds of sponsored calls, which are almost an ad but more of a teaser ad).

• • • •

These thoughts reflect preferences for a particular communication company or conventional idea. After first collecting consumers’ various thoughts, I used this to scan the minds of people who use communication services like taking an MRI scan. I observed what kind of thought comes easiest to a Korean’s mind when it comes to communication rate plans or service usage. The following ten sentences received the highest rate of agreement among people in the survey: they can be said to be the public’s most common thought regarding communication fees. Let’s look at the following sentences to see what kind of person’s mind it reveals. • • • • • • • • • •

I feel good when the charges on the bill are less than last month’s payment. I wish there wasn’t any kind of contract and instead only the service I use charged for payment. I immediately cancel services I had no other choice than to select while purchasing a cell phone after the agreement period is over. The text message fee should be lowered since the prime cost is low. When deciding on a rate plan, I always check the basic fee. Voice call fees and basic fees take up most of my monthly communication payment. Every time I check the phone bill I feel that the mobile communication fee is expensive. Even after using a particular carrier company for a while, I do not feel as though I receive any special benefits or discounts. Korea’s mobile communication fees are expensive compared to the communication service, quality, or benefits provided. I am willing to receive bills through email or text and not mail if the fees are discounted.

Looking at these sentences, you can read a mood of I had no other choice, I do it because I need it as if people have become hostages to the mobile carriers. It’s the feeling that they have no choice but to accept it even though it is

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expensive. People who face their communication bill with this kind of mindset represent over 80 percent of customers. They anticipate that they will escape this hostage position someday, but they haven’t thought of doing anything themselves. Everyone begrudges having to pay the communication fees, but they endure it somehow and pay the fixed rate. While they are very sensitive about the expensive fees, they use the service diligently. They aren’t very interested in exactly what is so expensive and why, they feel it is expensive because others say it is expensive. If the majority of people are using a communication service with the feeling of being a hostage, then among them there are a minority who, instead of complaining about the communication fees, actively use the service to offset their grudges.Their representative behavioral characteristics are like the following: • • • • • • • • • •

I have changed carriers for data or other additional services I wanted. I have applied for or changed credit cards in order to receive communication fee discounts. I have enrolled in a service looking at an advertisement on a bill. I check the real-time communication fees frequently. I do not have a huge interest in the mobile communication fee because it is payment that goes out on a basic level. I do not use text messages or data services because I mostly make calls. In order to reduce communication fees, I use sponsored calls or free text message services. There are times when the mobile communication company makes mistakes in fee calculations and charges the wrong fees. I do not look at the bill for mobile communication fees even when it comes in mail, text message, or email. I choose communication firms with membership benefits in mind.

This study was done before the smartphone was released.Therefore, it could be distinc from the reaction after the spread of smart phones. However, this kind of perception is exactly what is included as the behavior of the minority in the communication market. They are relatively active in using communication services. They not only react to the various discounts and marketing the communication firm provides, but they also react sensitively to the discount cards, giveaways, and bonus gifts. They are also relatively sensitive to the communication fees. They frequently change their devices and actively use various discount cards in other aspects of their lives as consumers. They think they are spending reasonably and rationally, but their behavioral method can be seen as a waste of time and energy. You have probably once or twice received a message like,“Dear customer, you are our VIP member. If you use US$1,000 more before this month passes you will get an additional US$30.” In this case, is there anyone who spends an additional US$1,000

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just to get US$30? There definitely are. Aren’t there people who purchase the required amount when there is an ad at a department store during sale season that says, “if you purchase more than this you’ll receive gift cards”? At least 20 percent of customers react to this kind of material. The marketing like that above was designed to capture the hearts of people of this type. Already one in four people among Korea’s communication consumers use a smart phone. Of course, the consumers who use smart-phones might have a slightly different perception of fees than those who use feature phones. However, the basic tendency has not changed much. In one or two years a new study that differentiates the smartphone user and the feature phone user might come out, but before a proper finding is presented, it is my hope that you will focus on the material that has been introduced here.This is the Korean people’s general perception regarding mobile communication fees and services.

Six different minds of communication consumers Scanning the minds of communication service customers, I identified six distinct groups: It’s unfair, Smart frugality, Substance, Gullible prey, Thrifty saver and Mobile savvy (Table 6.1). All these terms describe the psychology code communication consumers have. This kind of categorization divides people according to how they experience a communication service, in what way, how they perceive it, and what they value in the communication service. These could be the communication consumer’s characteristics in Korean society. In order to know what kind of specific difference these types show in communication consumption, let’s look at what they have answered in more detail.

It’s unfair If you agree with the following sentences there is a high chance you may belong to the It’s-unfair group. TABLE 6.1 Nicknames to represent the minds of six phone service customers and their key characteristics and desires

It’s unfair

Substance

Thrifty saver

• Communication fees are too expensive! • Telecommunications companies are thieves!

• Looking for the best service for me

• “Do not spend” is the only way to save money

Smart frugality

Gullible prey

Mobile savvy

• Looking for communication fee discounts

• No doubt I’ll get low monthly payments! Somehow, if it gets high, I will blame it on others and society

• There are too many things to do with a smart phone!

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Korea’s mobile communication fees are expensive compared to the service provided. The price of text messages should be lowered since the primary cost of text messages is said to be little to nothing. I feel that the mobile communication fee is expensive every time I check the bill. I wish only the fee for the service I used would be charged without any account agreement. The mobile communication fee does not reduce very much even after changing to this or that rate plan. The cell phone usage fee is too expensive compared to the home phone usage fee. The biggest portion of the monthly mobile communication payment is the basic fee and the voice call fee. It is sometimes necessary to change carriers in order to change to the newest model device. It is unfair that there is a basic rate I have to pay regardless of what I used in the mobile communication fee. It feels good when the current month’s fees are less than last month’s fees on the bill.

The It’s-unfair group does not have any major dissatisfaction with the current mobile communication service. However, they feel that the fees are unfair. They are sensitive; they have their own principles regarding how the world should work. So they feel that the communication fees are expensive compared to other things, and they think it is unfair to pay because they have to pay even though it is expensive. Since they use it with no choice, they think the government should get involved and reform the system.The reason that civil organizations lead the way in criticizing and protesting the injustice of the communication fee system lies here. In practice, their communication service use behavior is very simple. They do not use services other than text and voice calls. When looking at the rate plan, they do not change what they applied for in the beginning. If they accidently press data call and have a fee charged they strongly object to the charge.They dislike changing numbers or enrolling in account agreements and they do not make micropayments often. They are people who believe there should be a clear reason and cause for spending.

Smart frugality: I will follow wherever there is service Unlike the It’s-unfair group, the Smart-frugality group is very sensitive to communication fees, but tries to keep them within their control and management. The mind of the group is expressed by the following statements: • •

I have applied for or changed credit cards in order to receive communication fee discounts. I have applied for a service in an advertisement on the bill.

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• • • • • • • •

Mission: case studies

I frequently check the real-time communication fee. I have changed carriers for data or other additional services. I use sponsored calls or free text message services to save on communication fees. I know the specific fee-charging system of mobile communication fees very well. I always check the automatic payment account and the withdrawal date on the bill. It is good to choose an inexpensive rate plan on the carrier’s homepage or by the customer center’s recommendation. I choose carriers with membership benefits in mind. It is easy to predict how much the communication fee I’ve used every month will be.

Like the It’s-unfair group, Smart-frugality people have a lot of interest in communication fees. However, these people know how to control and manage their communication fees, so they do not directly complain about communication fees. They try to choose the family discount rate plan if possible and they have a lot of interest in the additional membership services provided by carriers, which they check in great detail. They even go as far as explaining in detail the payment charges to people around them who complain of excessive communication fees, as if they were the spokesperson for the carrier. They pride themselves on knowing carriers well in order to save on fees. They readily enter into promotional events that the carriers provide (Figure 6.2). The “queens of housekeeping” who sometimes appear on broadcast media and boast, “I am this kind of person. If you housekeep this way you can also be a queen!” are usually the Smart-frugality type. These people diligently keep household accounts and manage receipts, but they do not have a lot of income. It is likely they are the standard household in Korea that makes their children’s snacks

FIGURE 6.2

Smart-frugality customers participate in promotions

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and seasonings themselves. They sacrifice themselves for the family, think that spending vitalizes the economy, and believe it is their life goal to enable their children to live well. They are willing to change carriers at any time if there is a better service or if there is something more advantageous to their life pattern. When a better device is released they change their device without hesitation. These people keep bills for receipt management and they meticulously read and check not only its full details, but also the advertisements and notices. Are you closer to the Smart-frugality or the It’s-unfair type? If you can judge what your own perception is regarding communication fees, then you can know which type you are—and can also differentiate other people’s styles. If there is a superior who often says, “Mr Kim, if you need to contact me please use Kakao Talk!” then nine times out of ten he is the It’s-unfair type. If a boyfriend says, “Hannah, I’ve made X membership cards while switching carriers today. Let’s go eat at X to celebrate,” then he is the Smart-frugality type.

Substance: I use it in my style At first glance, the Substance group (Figure 6.3) is similar to Smart frugality, but it differs in that its members are willing to pay for the benefits they get from the service without complaining about the cost. They are very close to the role model consumer. The following statements represent the Substance group’s mind regarding phone services: • • • • • • • • • •

Services selected without a choice when purchasing a cell phone are immediately canceled after the contract is over. When choosing rate plans I always check the basic fee amount. I am willing to change the existing paper bill to email or text message if the payment is discounted. I comfortably use my cell phone, even at home, to make calls. If I apply for a rate plan change the carrier I belong to processes it quickly and conveniently. I only wish the fee for the service I used was charged without a contract. If you use data more than voice calls or text messages, then it is good to make use of additional services. I feel good if this month’s charges are less than last month’s charges on the bill. Items charged to a cell phone need to be stated clearly on the mobile communication fee bill, like they are on the credit card bill. Currently, I know the mobile communication fee’s specific fee-charging system very well.

Substance group members value their style. In their own way, they live relatively youthfully and wisely. They themselves believe they spend rationally and reasonably. They have some subtle interest in fees but they are not at the level of complaining about them. They manage their phone usage within a reasonable limit. They feel great when their payment is reduced. However, they do not try

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FIGURE 6.3 Substance consumers prefer to switch to a lower fee carrier (in Korea, LG is known for its cost-cutting plans)

hard to save on the total communication fee in practice. They also do not think data and other additional services are that expensive because they use them only when they need to. They are also well-receptive of extra services because they think they can control themselves. They dislike unnecessary contracts or additional services they are forced to sign up for. They use telecommunication mainly for themselves and tend not to trust the rate plan carriers provide and try to find specific grounds according to their own judgment. Substance types are model consumers in their own way. When purchasing a cell phone, they compare and check everything, like design, pixel, and sound quality. They value relatively new models and enjoy a lifestyle unrestricted by money.They mostly use credit cards and look mainly at the total charges on the credit card bill rather than each individual charge. In most cases, they are young or do not have children to take care of. They spend money mainly on themselves. Instead of buying something because others buy it, they value their own style and their consumption activity revolves around what they like. It is important to let this kind of consumer know exactly how much communication fees will be discounted. It is especially effective to give them positive information about the rate plan to make them feel as if they hit the jackpot by selecting it.You have to emphasize that they have many choices. They have a strong tendency to think that communication service is a cultural activity for the user. Therefore, they place more meaning on the spectrum of the cultural activities they can enjoy instead of the superiority of the communication technology itself.

Gullible prey: so what if I’m easily swayed? If the Substance type is a model consumer from the perspective of carrier companies, then the Gullible prey is the delinquent consumer.The following represent the mind of the Gullible prey:

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• I do not use text messages or data service because I mostly make calls. • I have changed carriers for data or other additional services I wanted. • If you send a picture with your cell phone you have to pay a data service fee in addition to the text message fee. • Using the standard rate plan (the basic rate plan) is the way to reduce the communication fee the most. • I do not have a huge interest in the mobile communication fee because it is a payment that goes out every month as a given. • I try to not use the data service if possible, or I shut off the option in the menu. • There are cases where the carrier makes a calculation and charges the wrong fee. • I tend to read in detail the notices and advertisements on the bill. • I tend to look at the total payment amount on the bill instead of checking the detailed items. • I have applied for or changed credit cards in order to receive communication fee discounts. These kinds of people do not trust others very much, they also feel themselves victimized. However, they are easily swayed by others’ words. This is because they do not have their own opinion and lack experience. If they get married they often cause conflict among family members and they are not detail-oriented, either.They tend to blame others, and they stir up trouble or harass people around them over minor things.They tend to be this way not only regarding communication fees, but in all areas of daily life. Most of the men of this type have the danger of being someone who uses violence against people around him. Some might express concern that judging how someone lives and even how that person’s marriage will proceed based just on the story of communication fees is a hasty conclusion, but reacting to a phone bill reflects a person’s behavior and mind to others. The Gullible-prey type is sensitive to fees. They have a fear of or a bad memory regarding the data service itself. They have been made to pay through the nose when they used a service without knowing or without being willing to. They think that the carrier’s actual charging plan is different and claim that the carrier is wrong. Not only do they believe a lot of things they have heard but they are also impatient. Thus, they have a tendency to judge hastily. They use cash instead of credit cards, and they are the type with an obsessive-compulsive need to appear decent to others. Of course, an encounter with this type of person is not easy. However, most people who work at the carrier company’s customer service center know the kind of behavioral pattern they show. Gullible-prey people don’t spend much. Even if they bought something because of what someone said, they soon regret it.They feel a kind of fear and pain when they have to pay for something. It could be someone who suffered a great loss after buying stocks following on the heels of others. They do not spend much money on enjoying their lives or on cultural activities. They mainly spend money and consume to look decent to others. It is not an easy task to

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distinguish these people in daily life. It is hard to know them well without looking at them in diverse ways and diverse moments because they appear decent on the outside.

Thrifty saver: there will be a lot of fees, hang up the phone Unlike Gullible prey,Thrifty-saver types have firm thoughts on spending and phone services: • It feels good when this month’s payment is less than last month’s payment on the bill. • Voice call fees and basic fees take up the most in my monthly communication payment. • I compare each monthly fee to last month’s usage fees when looking at the bill. • Services that were selected without a choice when purchasing a cell phone are immediately canceled after the contract is over. • It is unfair that there is a basic charge included in the communication fee without any relation to the services I have used. • I wish only the fee for the service I used was charged without any contracts. • The text message fee should be lowered since the prime cost is low. • When choosing rate plans I always check the amount of the basic fee. Every time I check the phone bill I feel that the mobile communication fee is expensive. Not only do these people have a lot of interest in the fee itself, but they believe that this month’s fees should be lower than last month’s fees. It would be best if the communication fee was free, but since it is not they think they have to use the phone sparingly, like electricity or water.These people do not make calls often nor do their call volumes amount to very much. In reality they are the type that never uses up even the basic number of calls allowed. Therefore, they think it is really unfair that the carrier imposes the fixed rate plan. However, instead of complaining that the fees are expensive, they try to use less. Also, they think mobile communication is an extension of the cable phone service and do not think extra services are important. These people use cell phones mostly for calls and use a text message service once or twice. For them, micropayment is a very unfamiliar idea, therefore they rarely do it. The Thrifty saver’s lifestyle is somewhat influenced by others. They have conservative values, e.g. they think the head of household should take on the family’s problems and resolve them. They are well represented by housewives over 60 in Korea. They firmly believe in moderate frugality. Talking to family members, they say, “The charges will go up. Hang up,” when they are on the phone. Thrifty savers do not use credit cards, if possible. They think the communication fee is a necessity that has to be paid when it could have been saved. For these people, the marketing strategy of making a combined product and giving discounts works. If a carrier makes them a membership card and advertises that they can get a discount at the

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partnering bakery or convenience store, they will be drawn to it. This is because of their tendency to be sensitive to discounts and free items.

Mobile savvy: make my mom’s account my account The Mobile-savvy type may well be the Thrifty-saver type’s children. For the latter, the phone service is like that of electricity or gas, but the Mobile savvy treat the phone as part of their body and use it for fun. The following statements represent the Mobile-savvy mind on phones and fees: • • • • • • • • • •

I do not really look at the mobile communication fee bill if it comes in the form of mail, text message, or email. I have changed carriers for data service or other additional services I wanted. I change my cell phone model every one or two years to a new model. I have applied for or changed credit cards to receive communication fee discounts. The communication fee I pay every month is, on average, more than US$70. I have applied for a service that was printed in the advertisement on the bill. I don’t have a lot of interest in the mobile communication fee because it is a payment that goes out every month. I frequently check communication fees in real time. The text message or data fee turns out to be more than the voice call fee. I tend to use my cell phone frequently to use micropayment or product purchase services.

The Mobile-savvy type uses various services. However, there is a high probability that they themselves do not pay the fees. For example, in South Korea, if their monthly payment is over US$100 it likely includes micropayments for downloading music or purchasing games. These people have more interest in additional services than rate plans. They easily change their devices for new ones. Also, their text message usage volume is much higher than voice call usage.This is the type that uses their cell phone to upload pictures on Cyworld or other social media (this research was conducted before widespread smartphone use, when such behavior was uncommon). Cell phones are a part of daily life for the Mobile-savvy type. They use all sorts of Internet services; they watch TV with a smartphone when they’re on the move; and they communicate with their friends by smartphone even when they’re face to face. The Mobile-savvy mind has fundamentally different values regarding communication fees and services—and if it was prevalent then they would be an essential part of all spending.

What do the different minds reveal about consumer desire? The six different minds represent different desires, but they share some characteristics, too. For example, It’s unfair and Smart frugality are distinguished only by a

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sense of control or management.They perceive their phone bills differently because their will to resolve their problems is different. Smart frugality have a strong will to manage their bills, but It’s unfair do not.They only complain, convinced that somebody should fix the situation for them. The distinction between Gullible prey and Substance is the presence of rational judgment. Substance types know the benefits they use and how much they have to pay; they choose a rate plan or service rationally and make the best use of the phone. Gullible prey, on the other hand, view phone bills with a victimized mind. They responds to bills emotionally and complain to the service center. The bills stimulate them to express their general frustration with life. Although they have used the phone services, they feel they have been ripped off somehow. Thrifty saver and Mobile savvy show generational and cultural differences in terms of phone usage. Thrifty savers, who have gone through hard times, focus on survival, but the Mobile savvy see life as enjoyment; phone services are play items for them. For the Mobile savvy, in other words, the phone bill is a charge for their fun. The minds of phone service consumers reflect the minds of people in general; they show how people manage their lives to satisfy their desires.

Your predictions were wrong An interesting fact was revealed as a result of studying people’s perception regarding communication fees. Some telecommunication consumers’ minds using the service were like those of a hostage.They use the service without a choice, but they do not feel comfortable with the price. There were even people who begrudged it. How can this begrudging mind be relieved? Actually, this problem cannot be solved by the bill itself. However, if the businesses fully understand the consumer who feels grudgingly, and focus on how the consumer will accept the fee, then the bill could be an interesting clue. If the minds of consumers say, “Oh, well! What can I do but pay it?” the carrier needn’t worry. However, more people feeling that ‘it’s not fair’ will be a serious issue for the carrier.When people come to see the phone service not as a business service but as a public service, they think it should be provided for almost no charge. Table 6.2 shows that the minds of phone customers follow two directions. One, the majority, has a strong sense of being held hostage; the other sees the carriers as toy providers.The latter have more interest in changing the device, or toy, whenever there is a chance. We can, of course, expect some public begrudging of the phone bills. It’s unfair will justify their complaints; and, unfortunately for the carrier, given that they care most about Gullible-prey and Mobile-savvy customers, the latter will not withdraw their complaints because these come form their lives in general.

Marketing: marketing for what? The average phone user in Korea changes carrier or rate plan not because of the bill but for the new phone. The carriers have a marketing strategy that combines a

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newly released phone and a new rate plan. Consumers understand the situation well, but they accept it for the sake of the new phones. Of course, the carriers are not the manufacturers of the new phones; in other words, they are not the center of customers’ attention, and they can lose their identities in the minds of customers. This makes them more like utility companies—and who cares about utility companies unless the electricity or gas supply is down? The concern that consumers cannot distinguish between communication fees and micropayments on phone bills was a starting point to identify the minds of customers on phone bills. However, they perceive the communication fees as expensive regardless of how much they use the service. They treat the service as a utility. The carriers have tried to pay attention to the minds of those customers who enjoy various services and get benefits from them, but these are not a significant numbers of customers, and even they are not interested in distinguishing between communication fees and micropayments.The minds of users clearly tell us that users are interested in finding a way to use the service as much as possible for as little cost as possible. Finally, I was able to help the carrier company by designing a bill that could relieve at least some of the feelings of unfairness when it was presented to the consumer. Of course, it was not possible to get customers to perceive that the communication fee has suddenly become cheaper. However, it was at least possible to lessen the feeling of unfairness and make paying communication fees similar to paying for water, electricity, or taxes just by changing the bill items and design a little. It can be said to be an interesting case where consumer psychology research became the basis for design change. If we think of it in reverse, it is also a case where design that understands the human mind and behavior is possible. In Part II I have introduced case studies—missions given to me by companies— based on the mind MRI theory discussed in Part I. I especially studied the consumer’s mind that is revealed in the consumer behavior of watching baseball games (cultural consumption) and the reaction to mobile communication fees (service consumption), and howed how various minds react differently to the same phenomenon. In Part III, (Chapters 7–9), I will discuss Korean consumer psychology using the topics of digital and luxury goods. The reason I have selected these two

TABLE 6.2 People’s perception of phone service carriers and bills

Hostage type (majority) It’s unfair

Smart frugality

Thrifty saver

Substance

Gullible prey

Mobile savvy

Toy change (minority)

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items is because I think that digital and luxury goods best reveal each consumer’s desire and mind. Like looking into the body through the MRI, the process of scanning the Korean mind will enable to understand what our lifestyle is and what kind of consumer we are.

PART III

The president and Louis Vuitton

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7 THE DIGITAL GEEKS ARE COMING

Mr Monet, you call yourself a painter? On April 25th, 1874 there was an exhibition in Paris, France. The art critic Louis Leroy saw the paintings displayed there and was displeased: he felt like he had been mocked. It was because of Claude Monet’s work Impression, Sunrise. The painting captured the moment the sun came up on the harbor. But the drawing technique was weird. Instead of using the realistic drawing technique that was the dominant trend at the time, it used something very different. How dare Monet express his feelings about the scenery instead of detailing and describing the changing scenery exactly as it was! Louis Leroy contributed an exhibition review to the satirical newspaper Le Charivari newspaper: “Monet, Renoir and Degas drew their personal impressions instead of the scenery. Maybe they should be called the impressionists.”1 The name impressionist came about this way and the paintings that received derision became masterpieces beloved by people all over the world. The painting style that astonished the nineteenth-century art world rivalled Copernicus’ discovery of the solar system. Renoir, Degas, and Monet (Figure 7.1), who we know well, are all impressionist artists. Before them the reason art existed was seen as to draw the subject realistically. But impressionists did not draw the subject as it was and instead painted as they saw it through their eyes, that is, their changing feelings according to the concentration of light. In the concluding years of his life, Monet, who was called the painter of light, prepared a garden in the Paris suburb of Giverny and painted the water lilies floating on the pond almost every day.The many series of water lily paintings were created this way. Even though the water lily series were captured from similar viewpoints, they evoke different feelings. This is because Monet did not paint the fixed physical substance of the water lily’s image, but expressed the sentiment he felt looking at the water lilies at various times.

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FIGURE 7.1

Monet (bottom right) and his paintings

At the time, everyone who considered themselves to be part of the art world received a huge shock from the impressionists’ paintings. This is because the view that “I draw as I see it” signified the destruction of tradition. For people who believed that drawings should describe the subject as it is, the drawings that painted the artists’ feelings and thoughts could easily be regarded as a violation of God’s order of creation. The influential artists who took the lead in the art world became angry and started to denounce the impressionists in every way possible. For a while the criticism and the heckling continued. However, from that moment on impressionists completely changed the direction of painting styles. Ever since, Western painting styles have continued to change, from impressionism to Fauvism to the modern masters like Picasso and Kandinsky.The idea that human thought could be reflected in art was no longer treated as foreign. Photographic techniques replaced drawing something as it appears. A new chapter began to open up for contemporary art. In 1962, Thomas Kuhn called the change in a particular period’s representative values, customs, and way of thinking a paradigm shift (advances in science do not

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happen gradually but revolutionarily through paradigm shifts). He said paradigms change constantly in the way that classical physics, which dominated the sciences in the nineteenth century, had to make way for relativity theory and quantum physics in the twentieth century. Paradigm shift is not a phenomenon that happens only in the sciences and the arts: everything changes in the world. Changes happen at the hands of people. The group that dominated at one time declines as time passes and things that were treated as non-mainstream become mainstream again. Sometimes, the non-mainstream becomes a minority group, but not all the time.

The mainstream’s dream Currently, are the people that have gained social prestige and who are judged to be economically capable in Korean society mainstream or non-mainstream? Am I, the professor writing this book, a part of the mainstream or the non-mainstream? When looking at social status or economic capability the professor will be a part of the mainstream group, without a doubt. However, is social status or an individual’s wealth the only yardstick to measure a person’s disposition, values, or their aims in life? In reality, when differentiating mainstream from non-mainstream, a person’s social position is not very important.What is most important is the kind of psychological attributes that person has, the kind of characteristics they represents. I looked up the word mainstream in the dictionary, which offers the following definitions: 1 2 3

the stream that becomes the main current of a river; the principal course or tendency in scholarship or thought; the majority within a group or organization.

The mainstream we will talk about, according to the third dictionary definition, will take Korean society as its main backdrop. So mainstream can be seen as the designation of the majority within Korean society. What about the former president, Roh, Moo-Hyun? Was he a member of mainstream or non-mainstream society? Even though he was in the position of president, we can still call him non-mainstream because he sought out something different from what people normally expect from the president. In Korea, where the sentiment that the president represents an entire nation overflows, his thoughts or actions were not commonly accepted. This is because he did not represent the mainstream order and thought, even after becoming president. Instead, he showed non-mainstream characteristics. What about president Lee, Myung-Bak? Lee showed society’s mainstream thought and behavior patterns very well. He says he grew up in a poor environment and finished his studies with difficulty, but his values and thoughts vigorously chased the framework of Korean society’s mainstream group. Even when he was in a poor environment, he longed to become mainstream. Therefore,

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the issue of whether someone is mainstream or non-mainstream is not simply determined by whether or not that person experienced poverty. What is important is whether one adapts to the mainstream order or one suits oneself to the nature of the non-mainstream. If the stories of Roh, Moo-Hyun, ninth president of the Republic of Korea, and of Lee, Myung-Bak (Figure 7.2), tenth president, feel too distant then I will talk about my friend who is an average person. His father did missionary work with sailors in Japan and Canada for a long time. Thanks to his father, my high school classmate has a colorful background. He was born in Japan, went to elementary and high school in Korea, and spent middle school and his college years in Canada. He graduated from UBC (University of British Columbia), a prestigious school in Canada. His could be an enviable background if sending children to study abroad at an early age, even if it is overtaxing, is considered. However, he is living a life that is completely different from the mainstream concept of success. He does not work in a major corporation or a diplomatic office in a foreign country, nor does he teach at a college. He did not follow in his father’s footsteps in something like missionary work. He is teaching English, Japanese, and art at an alternative school in Kwangju (his actual major was economics). If there is something different about him it is the fact that he loved art so much that he now specializes in it and exhibits his artwork every two years in a gallery in downtown Kwangju. I meet him once or twice when I go to lecture in the area and I always come back infected by a refreshing sense of energy. He loves his work, where he can teach children what he has learned, and his love of drawing has surpassed being a hobby and is now his specialty. So every day is pleasant and happy. He uses all of his small salary to fund his art but he never in the least feels as if he lacks anything. This is because his entire life is full of pride that he lives every day doing what he wants. He doesn’t pay attention to people around him who

FIGURE 7.2 Former presidents Roh, Moo-Hyun (left) and Lee, Myung-Bak represent opposite faces of social values and lifestyles, regardless of their personal backgrounds—and both may have fulfilled their desires

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sometimes click their tongues and reproach him, saying, “Why do you work as a teacher in some rural school with a résumé like yours?” People categorize him as non-mainstream because he has no money, no reputation, no power, and not even a common apartment in the capital area. He is distant from the factors considered to be essential to the mainstream, such as social prestige, economic capability, and a stable life. So even people who are very close to him say, “With those good skills why of all things …? Look, if it were me, I would …” and think he is wasting his talent. What they are really trying to say—the story that is deep inside their hearts—is, “If I were as fluent as you in English and Japanese, and if I went to a prestigious college abroad, then I would have used all those resources to succeed early on.” It is the mainstream image of what most Koreans want. Mainstream values that keep mainstream order are maintained because those values are what the majority of people who compose Korean society want in their lives—and my friend, who has the thinking methods and values of mainstream society but who is an alternative-school teacher, becomes non-mainstream because he is economically and socially unimportant. We still understand someone by the kind of social position they have. This kind of situation, of course, is ironic. One thinks of himself as happy, but others pity him saying, “Something must have not worked out for him to end up this way, tsk tsk.” This is because of the social atmosphere that only considers one’s current position and results as important. However, how one’s life appears does not show a person’s values or way of thinking. Likewise, it is very unfortunate to distinguish mainstream and non-mainstream by how high one’s social status is, or how much money one earns. Since the definition of mainstream or non-mainstream is unclear, it is probably hard to identify who belongs where.

Should I do as I want or follow the tide? The tide in a capitalist society is money. So we try harder to earn more money. We try to earn more money to become incorporated into the mainstream order, where we expect to enjoy a comfortable and abundant life. Paradoxically, the logic of capital has the two faces of the Roman god Janus. One face represents the view that money makes more money, while the other represents the view that there are more rewarding ways to make money. Here is something that needs to be noticed. If the mainstream way is to make more money with money, then the non-mainstream way is to make money you don’t have through thinking and acting differently from others. Even at a glance the mainstream way seems easier. The gap between succeeding by wielding money and succeeding without money seems as big as the distance between heaven and earth. Blindly following the trend means one wants to become a part of mainstream society or that one accepts mainstream society’s philosophy or values. In easier terms, it means “I want to be a part of the majority and I want to do as much as other people do.” A lot of people try to blindly follow the tide regardless of whether their current state is part of the lower-middle class or the lower class. They aim

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toward mainstream values. However, it is hard to change one’s life this way. The more someone wants to become part of mainstream society, the harder it becomes. Instead, they become someone who works hard for someone who is already a part of mainstream order. Some might ask, “Professor, in order to be mainstream don’t we have to fully embrace their values and philosophy and try hard to become like them? Don’t we become incorporated into mainstream society by going to a good college, by studying hard, and earning a lot of money by working hard?” Likewise, people who do this kind of linear thinking (determining the way of the world and the cause through the attitude that understands everything as a causal relationship) think, “If you work hard you succeed. If you live diligently everything can happen. Living diligently is the good thing.” So when I counsel people, there are many who lament, “Professor, I have worked so hard, so why am I so poor? I work really hard but why is living so hard to do?” Of course, they live diligently. However, living diligently and achieving the life you want bear no relation to each other. If I talk so honestly a lot of people are very surprised. Then they ask, “Why does living diligently bear no relation to achieving the life you want?” Now I will say why. Let’s take an easy example. There is someone who wants to speak English well; day and night he studies it. He goes to the private English institute that his friend who is the best English student in their class goes to, and he buys all the English books read by children who study English well: six grammar books, ten vocabulary lists, and five reading comprehension books. He asks friends who have good listening skills how they learn, and he watches American shows every night, reads the scripts, and memorizes pop song lyrics. He invests almost all of his time studying English. The only thing he does other than studying English is breathe. But his English grade doesn’t improve. This student probably will not achieve the grade he wants because he places meaning only on doing something diligently instead of clarifying his goals and focusing his efforts to achieve what he wants. If you want to gain something you truly want then you have to ask, “Am I trying hard?” from the aspect of what you want to achieve. If this student really wants to improve his English grade then he should have changed his method a long time ago. First, he should have learned exactly where he stood among his fellow students in terms of English, and tried to make a study plan and find a method that fits his level. There is no reason his English grade would improve since he blindly followed his friend, who has a score of 118 on this TOEFL exam, while he is at the level of sixth grade English. What use would memorizing SAT books be when he is puzzled by basic grammar? There are people who blindly follow mainstream values and want to chase the tide but cannot achieve it, and then there is a completely different approach. That is, insisting on the values and lifestyle of the non-mainstream and one day suddenly getting one’s values acknowledged by the mainstream and becoming a part of main society from a completely different angle. In this case, showing a clear characteristic different from those of mainstream society, it is possible to become part of the creative minority. This is very different from the student who wants to

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speak English well, but speaks it at the level of a sixth grader and cannot improve, no matter how hard he tries. Arnold Yoon is an 11th grader who attends a high school in the Daejun area. He is known as the god of English at school. He has a vocabulary large enough that the English teacher sometimes asks him for the correct words; he speaks freely with foreign teachers; and he goes to the theatre to watch movies without subtitles, and sometimes laughs at scenes where no one else laughs as he whispers to the friend next to him, “The subtitles are wrong!” Some people think Arnold’s grasp of English comes from living in an English-speaking country for a long time. However, Arnold has never been outside of Korea. Since he was little he has always lived surrounded by the English-language version of the print and animation cartoon Asterix. As he grew older the English cartoon in his hand became English novels and the animation he enjoyed with his eyes and ears became American shows. His mother, who used to scold him, saying, “Do you only read cartoons and watch animation all the time?” is now busy bragging about him because the school’s native English teacher has strongly recommended that the study abroad.These days students at Arnold’s school all carry around one or two English cartoon books in their backpacks. George Soros is a world famous investor (Figure 7.3). Of Hungarian descent, he escaped to England from Hungary during the war and was educated in England. In college, he majored in philosophy and later he went to America and earned more money than others through specialized investments. He once even heard the story that he was a foreign-exchange speculator (someone who trades foreign exchange to profit from the expectation of future foreign rate fluctuations). From looking at the superficial facts, Soros definitely seems a figure who represents mainstream society because he is a successful investor and a billionaire. But Soros’ thinking method and philosophy clearly show the tendency of the non-mainstream. People commonly believe they should follow the trend. All the while they do not ask who they themselves are. Compared to this, the person who continuously asks, “What do I want, what kind of life should I live?” and continuously focuses on improving himself to answer these questions is part of the non-mainstream in Korean society. Their thoughts and values apply to the non-mainstream way of thinking. This is because the general trend is to be seen as someone who is great, doing something other people do, and fitting one’s life into some stable framework. Here, there is an interesting fact. The questions and concerns seen as non-mainstream in Korea are seen as the general trend in America. In American society, most people think “What do I think?,” “What do I want?,” “Just do what you want to,” and “You are the one responsible for your own life,” and they live like this and talk about these values with others. Everyone accepts these thoughts without hesitation. The way of thinking that is non-mainstream in Korea is mainstream in America. This is the, so-called, general trend. But what is Korea like? If anyone even vaguely alludes to these thoughts, then parents thrust a hand in their face saying, “What do you know? You have some nerve. How dare you ignore what I have to say when I worked so hard to give you an education!

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FIGURE 7.3

George Soros, the man who broke the Bank of England

Listen, just continue the path you are on now. Find a stable path and live just like other people do. It’s not good to be different. It’s difficult to stand out!”The general trend in Korea is like this. There is an interesting experiment related to this problem. It was an experiment to find out what the difference is between the behaviour of American and Korean mothers when a child encounters a difficult problem. The results, televised as part of the Mother Shock documentary (Figure 7.4), showed that American mothers watched the child with patience as the child solved the problem, while Korean mothers couldn’t stay still and gave hints or even solved the problem for the child instead of letting the child solve the problem on his or her own. While American moms accepted various thoughts as a matter of course and encouraged children to solve problems creatively, Korean mothers usually only thought of a single answer and had a strong tendency to emphasize it. So a scene similar to this experiment often happens in real life. As a more realistic example, people who are part of mainstream society in Korean society, or people who have similar mainstream tendencies, believe that life will be easy once one goes to a prestigious university and graduates with a good GPA (grade point average). However, in America this kind of thinking is non-mainstream. Of course, there are a lot of people even in America who want to attend prestigious universities. It is possible that part of the mainstream group

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FIGURE 7.4

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EBS’s documentary MotherShock: Part 2

are even more obsessed with going to a good college than Koreans are. It is just that there are a relatively smaller number of people who believe the visible and institutional results of attending a prestigious college and getting good grades will guarantee an individual’s future. Mainstream society in America prioritizes the fact that everyone leads their own lives and that each individual can choose what life to lead. It is completely different from Korean mainstream society that tries to fit people into a fixed mold, forces people to veil their individuality and live according to the general trend. This difference clearly shows the fact that if mainstream society’s values and way of thinking is different then the condition/ appearance of the general trend that dominates a society becomes different.

Trend cycles and megatrend changes Corporate thinking on mainstream Korean society is that if there is something that others have made money from then we can make that even better or cheaper and profit from it. So Samsung Electronics focused on developing a new product, following that thought, after seeing smartphones sweep the cell phone market and seeing the success of Apple’s iPhone. The Galaxy S series was created this way. It is

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a phenomenon that best reflects the thinking of mainstream groups that manage businesses in Korean society. I myself question whether it is good to be nonmainstream when it comes to making products and selling it as a global company. This is because, from the non-mainstream perspective, one has to depart from the familiar items that mainstream order has already made and have to study how to pioneer a new market—the unfamiliar and new thoughts and products—and how the public will embrace it. This means they have to consider how the nonmainstream thinking and behavioral method can succeed and whether it can become dominant. Steve Jobs’ non-mainstream thoughts and business succeeded because the target market was America. If he had made a company like Apple in Korea it would have failed immediately, a hundred times out of a hundred. Many people in Korea want the non-mainstream to succeed and eagerly wait for them to become the majority force in society that will create a new dominant culture and order. However, in Korea that rarely happens. Korea’s mainstream people become anxious when non-mainstream people become dominant in society. They do not want the non-mainstream to become the general trend because it is hard for the mainstream to understand the nature of the non-mainstream. The more the non-mainstream becomes embraced by the public the clearer it becomes that the mainstream group’s thinking and logic do not agree with those of the non-mainstream. This could be seen as a problem: both sides need to understand and embrace each other’s different thinking and behavioral method. But, unfortunately, Korean society’s mainstream group cannot react flexibly to thinking and behavioral methods that are different from theirs. Even if they wanted to manage it flexibly they don’t know how. This is because Korean society’s capacity to accept diversity and its ability to accept various ways of life are nonexistent. Let’s think about it. A young married couple who graduated from a prestigious university quit their dream job and go to the countryside to live and farm there. Both of them start living the happy farmer’s life. They tend a vegetable garden for self-sufficiency, exchange work during the farming season when there is a shortage of labor, and using the skills they learned from the city, the husband does village planning while the wife teaches the children. The village people whisper among themselves, “What did they come here for? Were they activists? They’re suspicious.” Decades later, once living in the countryside and farming became a trend, the village people bragged about this couple to everyone saying, “We wish there were more young people like them!” There is something we have to acknowledge. In Korean society if nonmainstream people become dominant through the public’s embrace then the fact is they quickly become mainstream. Even people who first strongly represented non-mainstream tendencies gradually mention security and sustainability and become very conservative. Roh’s administration is an example of how the non-mainstream was the dominant force in Korean society. They came out of the Democratic Party and declared that they would be a party that would

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last a hundred years as they formed the new Our Open Party. It is from that moment that the non-mainstream began to arm themselves with mainstream thinking and logic. It is as if a business that started out as a pioneering venture immediately accepted the behavior of major corporations once it increased in size. They did not even remember what kind of non-mainstream ethic and philosophy they had once held as they unconsciously embraced mainstream values. They became mainstream as they lost their core values and identity and, ultimately, they lost sight of their reason for existing.This problem is the process of change that we have to think about when we question how we conceptualize mainstream and non-mainstream and how the majority comes to be. The majority is literally what many people agree on. Therefore, there is no reason to determine whether something or someone is mainstream or nonmainstream while discussing the properties of the majority. The mainstream could be the majority and the non-mainstream could be the general trend. For example, a relatively short time ago people would not have predicted that smartphones would become a megatrend, but that’s what they have become. now smart phones are a megatrend. Therefore, we always have to be alert to who creates megatrends. If it is a person who has the thought that in Korean society one decides one’s way of life and one’s life values, then that person is part of the non-mainstream. This is called individualism. In comparison, the mainstream thinking is, “I’ll work hard wherever accepts me after studying hard and preparing for a job.” It is the thought that one sees oneself as a component part of the group and will fit one’s life to the group mold and make the group’s values one’s own values. In some ways, it is a thought that is close to collectivism. From this aspect, it is possible to figure out that Korea is a society where the properties of collectivism and individualism appear respectively as mainstream and non-mainstream ways of thinking. Thus, it is a clear misunderstanding that non-mainstream people are people who aren’t able to adapt to the changing times or society, or people who are part of a minority group. This is because some people who represent minority thinking and values when embraced by the public as the dominant force will surface as mainstream.

Company vs. Neo-renaissance man A lot of college students and young people these days say, “my life is difficult, it is difficult to live.” Every person I meet cries out, “It is no use going to college after studying hard!,” “I feel anxious even after getting employed, after getting a good TOEIC score!,” “How can someone like me get married?,” “I got married but I can’t even think of having a child!,” “I want to give up on getting my own house!,” and so on.The complaints are diverse. It is hard to find personal and positive stories, such as, “I’m going to explore remote areas next year with the money I saved up the past three years!” or “I have challenged myself to learn Spanish for the near future,” or “These days after work I am learning sports dance and it is great to meet people and work out.” Why is that? Because they compare their lives with other people’s lives and live a life that chases the things other people think are important.

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I think both the Company man and the Neo-renaissance man are living inside young people’s minds now. Two incompatible forms are coexisting, which is why it feels difficult to live in Korea. In Korean society—especially when discussing consumer behavior—the megatrend is the lifestyle of the Company man (Figure 7.5). Their basic motto is, “I at least do not lag behind.” They spend diligently and follow others because they try not to lag behind. They seek blandness so they do not stand out and they pursue collective values. They work hard in their own way. They have a strong desire for self-improvement, have a lot of curiosity, and try to get along well with the young generation. They also place much emphasis on power, career achievement, and norms.They also value relationships.These are the general characteristics of Korean society in which people who are relatively socially successful value norms and relationships. This is because they think those relationships are the core factor that help them achieve success. The representative figure for the Company man can be thought of as the successful board member of a major corporation. These are people who represent the mainstream who can be described as people who have succeeded socially. When meeting Company man on an individual basis they seem quite intelligent. However, if there are many of them they seem like the ghost in Hong Kong movies, that is they change into soulless corpses.Their motto is “Do not let the enemy know what you are thinking.When speaking your thoughts inform them of their thoughts as if they were your own.” For the Company man, digital is nothing more than a tool that secures their dominant position so they can show how much better they are than the other person in a competitive situation. But ironically, these people are the consumers that first use the digital products and services when they are released in this society.

FIGURE 7.5

The typical image of a company man in Korea

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If the people trying to follow the tide, including the Company man, are mainstream, then the non-mainstream people, like Neo-renaissance man, think their thoughts and style are the most important. Of course, they say they care how other people view their style or behavior, but they only say that; they themselves do not have much interest in nor do they care about others’ opinions of themselves.This is the non-mainstream characteristic.This isn’t because they are ill disposed or because they disregard other people. People with strong non-mainstream tendencies tend to use their energy to focus on their style or thoughts. So they do not know what kind of gap and what kind of differences they there are between them and other people. They often experience embarrassing or difficult situations because of this. Neo-renaissance people represent the sentiment of making money while they play. Many people mistake this play for fun. However, it is not fun. Rather, it is a concept close to the idea of flow (absorption, immersion) discussed by Hungarianborn American psychologist Mihaly Csikszentmihalyi. The real play that people inside a group can enjoy happens when they find themselves working on something that has significance for them all through the night. People experience real joy when they can do something that of significance. However, most people think of joy as just laughing and joking, perhaps watching television shows, such as Infinite Challenge or 1 Night, 2 Days. Some people say company work should become as fun as comedic television shows. That’s the comedy! It shows how substandard our general ability is to understand a phenomenon and determine the problem. In the Neo-renaissance man’s case joy is not just joy. They feel true joy when they experience gaining what they’ve wanted to gain.This could be social recognition, social prestige, or money. In a business environment, the primary object is probably money. This is because it has a very clear value and result. Neo-renaissance types have a strong enthusiast quality. They are also skilled in finding out what kind of social meaning the joys they seek have. Also, they excel at demonstrating new kinds of expertise and presenting themselves well socially. They seek freedom and creativity and an enjoyable life. They enjoy talking about what their aims are with people and like to share them with others instead of pursuing just what is fun. They also enjoy adventure and often do something others would not. If that is something that buys other people’s appreciation, then the prospect for its expansion will become greater. Who is the self-made creative entrepreneur in Korea? I would answer, without hesitation, that person is president Kim, Jung-Ju of Nexon (Figure 7.6). As a man of wealth with over US$2 billion in assets, Kim was designated by the Forbes magazine as the 595th billionaire in 2010. He is similar to Steve Jobs in that he is a self-made man without having inherited a cent from his parents. The majority of people will probably compare Nexon in the same context as Apple or Google when considering the founder’s story or business items. However, it needs to be noted that Nexon’s business area is games. Gaming is an area mainstream people do not like.They want to stay far away from that area. I think the reason he is not called Korea’s Steve Jobs also lies here. Korean society’s mainstream people say they want something creative and innovative, but they are a good example of people who have serious allergic

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FIGURE 7.6

Former Nexon Holdings CEO Kim, Jung-Ju

reactions to the creative and innovative phenomena around them.The situation the gaming industry is in shows this kind of reality.This is because people who represent mainstream society do not try to embrace thoughts that are different from their own. In a capitalist society, people who earn a lot of money are the heroes. But a long time ago Genghis Khan was a real hero. Why was he a hero? Was it because he earned a lot of money? No, he became a hero not because of money but because he seized a lot of land, as did Alexander the Great. However, in today’s context it is not too different from the money issue since capturing a lot of land at the time meant an accumulation of wealth. But even if it was the same accumulation, China’s wealthy merchants who profited by sitting comfortably were not treated as heroes. Let’s briefly think of Mencius’ mother. Why did Mencius’ mother set out to move next to a schoolhouse when she was selling things at a marketplace? If she had continued to do business at the marketplace then Mencius might be the world’s greatest merchant. But Mencius’ mother determined that even if he became a wealthy merchant it would be useless if a strong general like Genghis Kahn appeared and took his land and money. Mencius’ mother’s thinking was, “If it is no use earning a lot of money then he has to pass the national exam to gain a hold of power.” Although there is a huge time gap, it is not much different from Korean parents’ way of thinking. This is the thinking and values of the mainstream that follow the tide. In the beginning, I said that young people these days have both the Companyman type and the Neo-renaissance type that cannot co-exist together in their minds. Now think of yourself. Are you mainstream or non-mainstream? Are you a Company man or Neo-renaissance? What is the value you really want? If you think, “I have to find a comfortable and stable life,” or “I have to chase the general trend,” without knowing what kind of life you are making and what you should

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do then that life becomes more and more difficult. It is a very ironic situation. Unfortunately, the truth in our lives lies in the fact that the more one pursues a stable life the more it eludes one. Life’s tragedy begins here. Therefore, we have to live enjoyably in our own way while differentiating ourselves from others. That is how one’s life becomes significant for oneself and how it becomes a stable life instead of an anxious, unstable life. The maxim of general Lee, Soon Shin, “If you try to die you will live, and if you try to live you will die,” is one that also applies to this period’s young people.

Digital geeks: the final reason we need to know them A while ago a student asked this question, “How does knowing various consumer types help? It might help companies earn profits but what does it have to do with me? This kind of type analysis might also be useful for businesses, but isn’t it the same for a consumer like me whether I know this or not? What kind of effect do those things have on our lives?” Of course, this kind of question is not limited to individuals. This is because individuals gather to form a group and small groups or organizations gather to form a society. Therefore, an individual’s question could be society’s question. I discovered a surprising fact as I investigated and studied consumer types. It is the fact that even our corporations do not place much meaning on knowing this material. Maybe it is because everyone is partly the Company-man type. And it is probably because the company is in a situation where it is dominated by Companyman types. What is more surprising is that the companies that requested this information do not apply the research findings in solving their problems. The board member in charge did not try to know more about what these findings meant. They just received a simple report and ended it at that. They all thought and acted in a thoroughly Company man mode. In other words, they only think, “I will choose the way others earn a lot of money and chase that and then I will appear similar to those people.” But I received a lot of help in understanding myself as I carried out this research. Which type do you think I am as a professor? Which type am I: Neo-renaissance man or Company man? Truthfully speaking, I reject being a Company man but no matter how hard I try because of my position as a college professor I have to maintain Company man mode. People say it must be nice to be a college professor since it is a stable job and you can work until retirement age. But the lifestyle I seek is actually the Neo-renaissance type. Doing something that feels really fun and enjoyable, that has meaning for others, that has results and also earns money. That is the kind of life I aim towards. In reality I live in Information worker mode. I make Word documents and feel great printing them out. I live my daily life as an Information worker, but I am thinking of gaining more confidence to live boldly the life of the Neo-renaissance type. However, to explain more accurately, I switch between being a Company man, Information worker and Neo-renaissance.

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Now the remaining question is this: “What did you, who are reading this book, feel through the digital consumption types?”

Note 1

http://en.wikipedia.org/wiki/Impressionism

8 THE TWENTY-FIRST-CENTURY’S DIGITAL NEO-ANTHROPINAE LIFESTYLE

Did Seung Min buy the 1GB computer? “If it has 1GB you wouldn’t be able to use it up, even if you used it your whole life.” This is a line spoken by the protagonist Seung Min in the movie Architecture 101 as he marveled at the new Pentium 1GB hard drive computer his senior Jae Wook had bought. The audience burst out laughing at this scene. To those of us living in the tetrabyte age Seung Min seems like a prehistoric figure. Thoughts like, “1GB is not enough capacity to save even a two hour video file” and “How on earth was that kind of slow computer used at the time?” may pass through the mind. It seems like something that happened a very long time ago even if it wasn’t. Still, probably some watching the movie looked back on their own faint memories and others would be thinking what an unsophisticated period that was (Figure 8.1). The storage capacity of 1GB, which at the time seemed huge to people, was big enough to contain all the information in the world. It is not necessary to have that much capacity for chatting online. Did Jae Wook buy it because he had a lot of money? Was Seung Min unable to buy the 1GB computer because he didn’t have money? This is a point we need to observe carefully. That is, how people react when something new is released in the world. We usually think that when new technology is released, and it spreads as it gains recognition many people will embrace it saying, “Wow, it’s new, it’s cool, it’s exciting, I have to buy it now!” But reality is nothing like that. If you are in doubt then think carefully about the following:

Question 1 Farmers are growing rice. There is a new breed of rice that is more resistant to diseases and insects and has a higher harvest yield. The company that

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FIGURE 8.1

Movie Architecture 101 and an old CD player—reminders of old times

developed the new breed of rice gathered the farmers and said, “Everyone, from now on grow this breed that is stronger against insects and diseases. Then you will be able to harvest more next year. Since it is strong against insects and diseases you do not need to spray much pesticide either.You also do not need fertilizer.”Would the farmers plant the new breed of rice in their fields after listening to the seed company’s new product development report?

Question 2 A brilliant way to study has been introduced. It is a method that has not been seen or heard of before. If this method is used it is certain that a better grade can be earned at this semester’s final exams.Who is the person that follows this method after hearing this story? Is it possible that no one will follow this method? Do you think at least a few people will try it or do you think everyone will try it? Koreans like new things very much, such as new medical techniques, new economic theories, new study methods, and so on. Koreans like new things so much that their expectation of new items could be described as excessive.Yet, when something really novel appears, the rate of acceptance is not that fast, nor is it continuous.

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The biggest reason is because people consider it troublesome and inconvenient to change their existing thinking or behavioral methods. In some ways, changing the existing behavioral and thinking methods is an area that psychology should deal with. This is because it is work that changes people’s behavior, and mind. I asked a student what he would do if there was a new study method, as I was doing a lecture on consumer psychology. The student hesitated and replied, “I will wait and see before trying it.” That student is a type that will try the study method once a student who doesn’t do as well as him academically receives a good grade after using the new method. Until he knows the clear results of using the new study method, he will not try to change his existing method.This is because, while he has confidence in what he is familiar with, he feels anxious about what he does not know. The issue of new technology is the same. If new technology comes out it seems everyone ought to like it, but the actual results are different. Rather, there are more sides that do not embrace it regardless. This phenomenon is the problem that occurs when something new is delivered to the people. In the early 1960s, Dr Everett Rogers1 published a theory on how people who form a community accept change, the technology adaptation life cycle. It is a model, built on the findings of how an innovative product is embraced and spread, that divides consumers into five categories using the time it takes for them to adopt the innovative technology. This model shows that the number of people who become enthusiastic when a particular new technology or lifestyle is introduced is actually very small. Innovators (people who are trendsetters in fashion or lifestyle through producing or introducing them) are 2.5 percent at the most; early adaptors (the consumer group that first purchases the product when it is released, evaluates it and lets people around them know the product’s pros, cons, and performance) are only 3.5 percent. These people always have an interest in new technology and services and they show an unconditionally positive attitude towards them.These are people who marketers like. Unfortunately, even if these two groups are combined they are only around 15 percent of the people. Therefore, in order to move more of the public there needs to be marketing.This is because people believe if awareness of the product or brand is boosted and they become familiar then purchases will increase naturally. Then a problem occurs. No matter how much the product is advertised, it frequently happens that people do not embrace it. This happened to IPTV, Wi-fi, smartphone, and so on.This kind of situation, where the product no longer spreads, is called a chasm because a rift happens. It is not a problem that is solved simply by doing more advertising. In order to cross the chasm, the mind of the majority who are constantly conflicted and who constantly hesitates has to be determined. Let’s go back to the story of the movie.What kind of consumer is Jae Wook? He is probably an early adopter. He is probably the type to try something new and good and novel as fast as he can buy it. What about Seung Min? There is a possibility that he is the majority in the middle of the graph. If other people use it and say it is good then he will feel the need to buy it. Then what is needed for Seung Min to buy the 1GB computer? Is it money or confidence? First he needs the

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conviction that he absolutely needs a 1GB computer, more than whether he has the money to buy it. Businesses and the market need to move the mind of people like Seung Min to cross the chasm and become a hit.

The public mind is a reed shaken by the wind Maria has a personality full of curiosity, she likes new things, and cannot stand anything for more than three years. When new items are released she has to buy them immediately, regardless of what it is and she changes her car every three years. Because she cannot stay in one place, she moves every three to five years. Her husband Harry is about to go crazy because his wife is like this. He who is uptight, cautious about everything, and aims for stability rather than change, cannot understand his wife’s capriciousness. She who replaces home appliances in perfect condition and sells cars that could be driven for at least another ten years for new models is unfamiliar to him. She seems as if she is a woman from Andromeda. Although there are people like Maria, who are always changing something and have no resistance to change itself, most people are not like that. Usually people have difficulty in changing their thoughts or behavior, like Harry. This is the reason I argue that it is not everything just to release a new product or service and that there needs to be a marketing and promotion strategy prepared to make these known and enable the average consumer to freely accept them. Then, is it really easier to spread new technology or products if the marketing and promotion goes well? Let’s look at IPTV as an example (Figure 8.2). For three or four years carrier companies tried hard to “propagate” IPTV. However, using this service is different from what we commonly think of as watching TV. No matter how nicely and carefully the service was explained, people thought IPTV was more difficult and complicated than normal TV. The spread of IPTV will be slow unless existing ideas and lifestyles around TV is changed. Wi-Fi and WiBro, that is, a wireless Internet service is the same. This service started to spread around four to five years ago for the first time. Carrier companies asserted that everyone needed this service, while explaining how great WiBro was. However, it didn’t spread.When the data usage did not increase as much as expected, the carrier company had to worry considerably about profits. However, they overlooked the fact that if people’s behaviors change then the data usage volume will also increase. They were only obsessed with lowering the prices or increasing awareness through marketing activities. As a result, they wasted unnecessary expense. Likewise, no matter how new the technology, it is very hard for it to spread to the public. It is not something that can be done by marketing and promotions alone. In order for a new technology or product to attract popularity, a new consumer and a new consumer behavior has to appear. This is the key point. This is something that happened when I was studying abroad in America. At the time, Americans managed their daily lives by using diaries or schedulers. It was routine for everyone to organize their schedules, this was unusual from a Korean perspective. But when the time came for my graduation, the paper diary started to change to PDAs and many people started to manage their schedules

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FIGURE 8.2

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BTV (top); KT OllehTV advertisement

with the PDA. This was also very novel. However, there was no one who used the PDA in Korea at the time. I emphasized its practicality and convenience and recommended it to people around me, but I didn’t get much of a positive response. When releasing the smartphone Korean carriers predicted that its spread wouldn’t be very wide. However, contrary to everyone’s expectations there were over ten million smartphone users within a year when Apple’s iPhone was released in Korea. The data usage volume also increased strikingly. People who did not move, no matter how much money was spent on marketing activities such as advertising and discounts, now use more data telecommunication than voice calls. Carrier companies are bitterly regretting having the data usage volume as unlimited since their rate of return is not very good. The core issue of wireless Internet services lies in whether people use the Internet through their cell phones. It is not a problem of marketing, such as advertising or promotion, but of whether the public’s behavioral pattern will change or not. The consuming public’s thought at the time was that they had tried to access the Internet with a cell phone in the past and determined it was too inconvenient,

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unless the cell phone could evolve into the form of a smartphone or if it could be used at the level of a wireless device. It was a problem that could have been solved immediately if only that was done, but no one could think that far at first. There could be hundreds of reasons why smartphones could not succeed in the Korean market. They used to say, “What do you mean the smartphone? It does not suit Korea’s circumstances.The PDA didn’t do well, did it?” instead of just asking “Why not?” This is because they did not read the mind of the consumer. People now do various activities through their smartphone. They find information and use it, and enjoy the many entertainment functions it provides. It is not an exaggeration to say that daily life is shared with the smartphone. However, even if it is the same cell phone, its use becomes different depending on who uses it. Does it really change according to sex or age? Usually, it is argued that men generally use the smartphone to play games or gain information about traffic and stocks. They also participate in social media, such as Twitter or Facebook. On the other hand, women use the design, traffic, menstrual cycle, bill-splitting applications, and smart phone messenger more. So there is a difference between the sexes even when it comes to using the smartphone. Although it makes some sense, it is not all correct. Is there a difference according to age? If there is a difference by age, then the more common questions are: what kind of mobile application best suits and appeals to each age group; which age group receives the most benefits using the smart phone and in which area? But nine times out of ten the answer to these questions could be wrong predictions. Because any predictions based on sex or age groups catch the superficial distinction of our life, they could not identify the basic desires of the consumer. For this reason, the business or industrial predictions on human behavior usually do not match with actual changes of human behavior. An interesting example is from the data on the usage of the iPhone when the machine was first released in Korea. According to information published by KH in 2010 (when the iPhone was first released in Korea), among all subscribers to their service women in their twenties to forties, living in the Seoul area were 6.1 percent while among iPhone subscribers, women in their twenties to forties living in the Seoul area were 12.8 percent, which was twice as high compared to the national average. The phenomenon of women in their twenties to forties comprising a higher proportion of iPhone subscribers was clear, especially in the Gangnam area of Seoul. Then what kind of significance does the iPhone have for Gangnam housewives?2 What characteristic can we know about Gangnam housewives through the iPhone? Is it another luxury item that equates with the desire to purchase designer goods? Are they using the iPhone to show their social value by saying, “I can adapt to the trend and live at this level,” and not just to use a simple telecommunication service? In other words, is it not an action that satisfies their desire to express themselves?

Scan the digital consumer with mind MRI In business marketing, everything that happens in the consumer’s mind up to the point of purchasing the product is commonly described by the following3 cognitive model that decides purchasing behavior (Table 8.1).

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TABLE 8.1 Four stages of product communication in purchasing (adopted from the Dagmar model of communication (1961))

Awareness Introduce the company brand to potential customers

Comprehension Deliver the product’s information to potential customers to make them understand usability of the product

Conviction Decide to purchase the product

Action Purchase the product

First, it starts by recognizing the product or service as a brand. Here consumption is a process that starts from the stage the consumer perceives the brand to the stage the consumer makes a purchase. In other words, consumption is a process for understanding and getting to know a brand better. Purchase is getting to be a little more interested in a particular product or service and thinking, “Yes, this is a decent product,” and going a step farther to become confident in thinking, “My judgment was right. I chose this well.” The first purchase leads to a repurchase of the particular company’s product or service. This series of psychological processes is called a brand cognition model. In marketing, this whole process is called the consumer sentiment. It depicts an ideal process of communication about something. It is fun to adopt the model to understand the purchasing process of a consumer, too. However, it does not tell us how consumers buy their own items because the model only gives us a sense of purchasing in imagination. Actual behavior in a context does not match the model, at all. It is very useful in figuring out how people imagine the purchasing behavior. However, it does not tell us how the consumer mind works in a purchasing situation because it does not tell us who the consumer is. Unfortunately, this model cannot effectively explain consumer behavior or the action itself. Nor does it clearly reveal what the inherent motivation is for the consumer behavior. It is only one among many reasonable and logical explanations by psychologists and business scholars about consumers who they want to believe are logical and reasonable human beings. Let’s look at what kind of psychological experience people actually go through when they are consuming, through the process of the spread of the iPad. When a student says she is going to buy an iPad, will she buy it after looking at what it is in

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detail? After completely understanding its functions, and after she becomes convinced she likes it enough to say, “Okay, I have decided. I will buy this?” No! Normally, they buy it saying, “Oh, that person uses the iPad. Wow! It’s great. I’m going to buy it too.” She buys it first and then studies its functions all night; how it is used, what it is good for. Aren’t there more cases where you buy something immediately instead of worrying whether to buy it or not when a new digital product is released? As evidenced from the case above, it is rare that the consumer purchases something according to the cognitive model process that is commonly discussed in business. The cognitive model is built on the frame of thought that humans make purchases using reasonable and logical judgments. However, it is not possible to properly explain real human behavior, or consumer behavior, with this theory.This is because the cognitive model theory does not operate well in predicting specific behavior. In other words, it has to be seen as a theory that cannot explain real phenomenon very well. It is plausible explanatory material after the fact, but it does not show the behavior that occurs in real life. Unlike the consumer research in management studies, consumer research in consumer psychology focuses on the psychological and behavioral differences shown by people who accept trends well vs. people who take a lot of time accepting trends as shown through consumer segmentation. This is because an appropriate solution or marketing strategy for the introduction or spread of new services or products can be planned depending on the findings. The man in the top image of Figure 8.3 is the first person in the world to buy the new iPad. He has a happy smile on his face. How do you accept people waiting in line to buy an iPad on the day it is released? If you have a similar tendency you will understand what that means. If you have experienced putting in a pre-order for an iPhone after hearing the news of its release, of running to the dealers after hearing the new Santa Fe model is coming out, you would behave similarly. But if you think it is safer to buy something after people have used it, or if you wonder how you can save if you buy everything that is new, then it might be a hard scene to accept. So what kind of person are you? The core of psychological research is finding the answer to this question. I knew through the digital consumer investigation that people with similar patterns divide into six categories. I also determined that each different group shows their thinking and behavioral patterns were different on the issue. Of course, I did not use the existing research method like the external standard of socio-demographic categorization to categorize consumer groups. This is because this kind of method categorizes the consumer’s vague actions by sociodemographic standards and then observes and predicts the target group that was extracted from the findings. Consumer research is normally useful in extracting the average and the mode because it helps to find the average group rather than finding the diverse group. But I am not interested in talking about the average or the type of people who follow the trend. So I used the mind MRI method that determines how each

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The buyer of the first new iPad, and people lining up to buy one

different consumer group is categorized and what kind of unique consumer groups exist, instead of looking for the average and normal consumer group. I believe that only this method will most clearly and properly determine the consumer psychology and behavioral characteristics that we experience in reality. Also, it is because the values and lifestyle of the consumers can be immediately determined. External standards like sex, age, and area do not impact on the consumer’s characteristics. What is really important is their internal standard, that is, their psychological standard. In order to identify the minds of digital consumers, I have to formulate several research questions. As I have mentioned before, proper questions are the sure way to find the right answers. The questions were developed based on the interesting happenings related to the consumption of digital media or services. The following are the typical questions of this research: • •

Why is the consumer behavior of some consumer groups always so impulsive? What are the psychological characteristics of the people who frantically run to change their phone when a new cell phone is released?

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Who are the people who always have a phone in their hands as they talk or exchange text messages even when driving or walking from place to place? What kind of people are those who are always watching something or who leave their TV on every spare moment they have?

By asking various questions like this and finding the reason, motivation and the psychological clues that are hidden inside is how you get to know the consumer’s psychology and can categorize their characteristics. We can categorize consumers by each different consumer behavior and the trend and consumer values or needs that are revealed through that consumer behavior. Then similar people can be grouped together according to their perception on belief of behaviors.

The new digital mankind seen through lifestyle In Chapter 7, I categorized digital consumer lifestyles, mainstream and nonmainstream characteristics. The two groups were the Company man and the Neo-renaissance. However, it was revealed that there would be a total of six groups if they were categorized more specifically according to the pattern in which they consume and embrace digital culture in their lives (Table 8.2). The people who are called digital geeks in Korea have a fundamentally different way of using digital media and their behavioral pattern was very different from average people.

TABLE 8.2 The six distinctive minds of digital consumers in Korean society

Digital modernist

Digital chic

Digital conservative

• the embodiment of reason and rationality, achievement, improvement, growth, professional mentality and economic stability • express their identity through exterior things • task, achievement vs. trend, joy

• be flexible and trendy, but without standing out too much • economic stability, recognition from others, sense of belonging, happy life, appearances • pursue their own style • social vs. personal values

• still, I do not lag behind! • authority, professional achievement, recognition from others, social norm, relation • work with what already exists vs. make a new thing, change

Digital boomer

Digital ludens

Neo-renaissance

• let’s gather people who are similar to us • fun, simple life, relation, belongingness, curiosity

• I don’t care if that is fun! • passion, curiosity, simple life • free, flexibile

• let’s work while we enjoy it! • free, creativity, joyful life • adventure, sympathy

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Digital modernist: I am the embodiment of reason and rationality • • •

When someone accesses my personal information, I am alerted through my cell phone and text messages. I access the information in my computer anytime, anywhere through my cell phone or PDA. I watch movies anytime, anywhere using various media.

These actions clearly show that digital media is used to manage one’s information or to control what one does in one’s own way. This is the characteristic of, so-called, digital modernists, Information workers who work hard using the computer. These are people that can be commonly seen in a company. Their basic motto is reason and they are usually the embodiment of rationality. They always emphasize efficiency and practicality. So, even when using a computer they manage and store information well. They pay a lot of attention to someone accessing their material. They are good at using digital media for their work, but are clumsy in using digital media to express their feelings. They do not use emoticons well when sending text messages.They only send simple, brief key points.They faithfully complete their work but are not creative. If these people are asked what they live for then they will answer with achievement, improvement, growth, and professional mentality. These people value how much other people acknowledge them, but they seek economic stability. So there are a lot of people who work in major corporations. For them digital media is a tool or means to complete their work efficiently.

Digital boomer: fun is best • • •

I want to let my location, surrounding situation and traffic become known as if I was announcing it. I check what my favorite celebrity is doing where. I regularly download my favorite ringtone.

If you see these actions as useless or unnecessary then there is a high probability you are an Information worker. But if you think these actions are important and readily enjoy them then you are a Digital boomer. There are a lot of people among students (middle school, high school and college students) and young people in their twenties to thirties who engage in these kinds of actions. These are people who take pictures of everything with their digital cameras, when they see something pretty, a new food, or whatever they like. They also like concerts. In the past, when we said fan club we usually thought of young girls that liked male singers, but as girl groups appeared, similar to Girls Generation, a band of uncles appeared, and then after Dong Bang Shin Ki and Big Bang a band of aunts also appeared. It is a very interesting phenomenon. I call them Digital boomers. For Digital boomers digital devices are a kind of solid channel that allows the similarly disposed to communicate (Figure 8.4). But they do not use it effectively

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FIGURE 8.4

KakaoStory, Twitter, and Facebook

for real life. They have a characteristic like the class clown. These people usually gather with similar people. They are sensitive and enthusiastic about trends and when asked what they live for they give fun as the reason. They live a very simple life but they value relationships and a sense of belonging. They consider the fact that they know someone very important. They also have a lot of curiosity, so if they think something is going on then they go over there and become completely absorbed. They were immersed in fan fiction a while ago, or became obsessed with diet and the exercise lady (momm-zang ahjumma). It is a group that values communication and play highly.

Digital chic: flexible and elegant • • •

I use the cell phone to make calls even when I am at home. I block certain people from viewing my blog or homepage. If there is a product that draws my attention on TV, I want to order it immediately (Figure 8.5).

The Digital chic’s basic motto is “Be flexible and trendy, but without standing out too much.” So they purchase something trendy at the right time, after people have used it first. They think of themselves as very important. They have a slight tendency to be snobby and superficial. They do not have a very strong style, but they hate bothersome items above all else. So if someone bothers them they cannot stand it. They lead a frugal life in their own way and they do what they like. Digital chic also pursue what is safe and convenient. They acclimate well to the existing system and generally live in an adapted state. Their core characteristic is seeing their method of satisfying their desires as non-hierarchical. Sometimes they save even ten or twenty cents on the cost of their lunch, but there are times when they suddenly spend hundreds of dollars at once for something they like. So they are sometimes seen by others as ridiculous.

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Nike + iPod kit

They act flexibly according to each situation and seek economic stability and recognition from others.They also consider a sense of belonging—decent company, decent organization—as important. This is because they think a sense of belonging reveals their identity. The Digital chic tries to live an enjoyable life by any means. They are the main readers of fashion magazines such as Vogue, Allure, and Luxury. Digital chic works hard on fitness in their own way and diligently read books on their iPad or computer. They study hard and they also believe they have to earn a lot of money. For this group it is a must to master a great sport that can be shown off to other people and to travel abroad.

Digital ludens: I live when I’m obsessed • • •

If I have to go out while watching TV then I finish watching it as I get to my destination. When I think of a lotto number I enter it immediately in my cell phone and purchase it. I send and receive text messages by voice.

When looking at these actions what kind of thought comes to mind? Is it not very impulsive? Likewise, Digital ludens have a tendency to move according to

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their emotions or mood, according to their immediate satisfaction. Their basic motto is fun (Figure 8.6). They do not become bound by a mold or rules. They value what is fun at the moment as most important. They try to do everything they want to so they become absorbed in cartoons or video. They have a lot of passion because they do what they want to, but their passion is unrelated to economic activity. They have an enthusiastic nature that becomes absorbed in what they want regardless of what others have to say. They are not bound by the original content’s mold and use it as they want.They have a lot of passion and curiosity, but they live relatively simply. The Digital ludens’ main characteristic is that they are nocturnal—they usually sleep during the day and move during the night. And they are very flexible.The main audience group for Infinite Challenge or Gag Concert is Digital ludens.These are people who are called elementary school kids on the Internet. Usually, a lot of people understand cho ding as elementary school students, but actually cho ding is a term for people who post malicious comments or raise a fit on the Internet.There are a lot of Digital ludens among popular commentators on the Internet. This is the type that writes through the night to publish a post on something they are obsessed with. People who collect figures or do Afreeca broadcast with dirty themes are also included.

Digital conservative: still, I do not lag behind • • •

I am always curious what other people think of a socially important event. I usually follow what other people say suits me best. I think movies should be seen on a big TV screen.

Digital conservatives believe they have to do what the majority does instead of what they want. College professors are included in the Digital conservative group.

FIGURE 8.6

Digital ludens value what is fun at the moment as most important

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Actually, people like college professors who like to study and immerse themselves in their work should show characteristics like the Digital ludens group, but in Korean society it is easier to be a so-so, a normative person who lives his life suited to the organization and who lives conscious of others’ opinions. So they accept college as if it were a corporate environment to secure their job. In this case, the college professor lives as a Digital conservative.Their most important motto is “Still, I do not lag behind.” These people are extremely fearful of lagging behind others. So they immerse themselves in the group they belong to and blindly follow the group’s rules and values. This is commonly described as showing an action pattern that pursues collective values (Figure 8.7).

Neo-renaissance: let’s work while we enjoy it • • •

They become a reporter and write an article or participate in media by becoming the DJ or VJ themselves. They periodically change electronic devices, such as their cell phone or MP3, even if they are not broken. They upload their image or video on UCC sites.

FIGURE 8.7

Hong, Jun Pyo of the Saenuri party, wearing an Angry Bird costume

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Neo-renaissance willingly do things that seem useless to others. But they are very different from the Digital boomers’ useless actions. They try to achieve some sort of result and they have a strong disposition to share those results with others. The representative figures are game company Nexon’s president Kim, Jung Ju, or Song Jae Kyung who made The Country of Wind and Lineage. Lineage was the beginning of Korea’s gaming industry. For over ten years Lineage has drawn tens and hundreds of trillion wons.These two people played a central role in building Korea’s gaming industry and they are legendary figures to game developers in Korea. Neorenaissance is the type who say let’s have fun and play while we work. This group of people has a very strong non-mainstream characteristic of valuing sensibility and improvisation. Here, we can take America’s Bill Gates and Korea’s Ahn Cheol Soo as representative figures.They are a lot of figures who are economically capable and have gained social prestige. Let’s divide the six types that were previously observed into two consumer psychology codes, which in Korea are everyday person and delinquent as core standards of consumer behavior (Table 8.3). These codes are clearly shown through the various consumer behaviors in digital consumption. The previously observed Digital modernist, Digital chic, and Digital conservative best reveal the code of the everyday person. On the other hand, Digital boomer, Digital ludens, and Neorenaissance are almost identical with the delinquent code. The problem of which of these two codes should appear when and for what kind of consumer phenomenon is dependent on what is regarded as the general trend. Also, they tell one not only the current consumer phenomenon, but what consumer phenomenon will appear in the future, how and to what kind of people. If an individual consumer behavior emphasizes sensibility and emotional characteristics then the delinquent code could be seen as the general trend. In comparison, if values such as rationality, frugality, and management are emphasized then the responsible code is seen as the general trend. Meanwhile, depending on the general trend the responsible and delinquent codes appear at different levels in an individual’s life. When something special and new captures people’s hearts the delinquent code stands out more than the responsible code, and if it is a social atmosphere that values stable and reasonable values then the responsible code will stand out.

TABLE 8.3 Everyday and Delinquent

Everyday (rational)

Delinquent (emotional, extemporary)

• hard worker, substantial and rational person • the image of the older generation’s idea of the mainstream group of our society • hold a conviction about their decisions and emphasize objectification • values: rationality, frugality, management

• pursue what they want extemporaneously • special talents • strong desire to show themselves to others • values: emotion, sensational

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Marketing to digital geeks At any age there are people who make the general trend. They make phenomena, like the verse in the book of Job (8:7) says, are humble beginnings but prosperous futures. The protagonists are the people I call the new digital humankind, the digital geeks. These people can overcome the chasm. Therefore if these people’s characteristics are accurately determined then it will be possible to understand digital consumption phenomena in more detail. As a clear example, look at Gmarket (Figure 8.8). Gmarket is an e-commerce site that has the highest market share

FIGURE 8.8

Gmarket homepage (top) and Lotte Department Store online site

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among Korea’s e-commerce sites. It is already approaching nearly 30 percent of the market. It showed that much growth among the many e-commerce sites.What kind of people are the customers who use Gmarket? How did they lead the market’s growth? The first place that started e-commerce was actually Auction, so why did Auction have to make way for Gmarket in Korea? What is the driving force that made Gmarket succeed? The core consumers of Gmarket are Digital boomers. The trends vitalized by Gmarket are absolutely not wonderful and refined. Gmarket sells low quality market goods, items that rapidly copy trends. The most surprising thing is Gmarket’s interface. How tacky! It seems shoddy even to the average person. However, Gmarket is not a site that shows design and sells luxurious tendencies. It is a comfortable and inexpensive e-market that was made for people to freely see the items and purchase them. If Gmarket designed its site like Shin Se Gye or Lotte Department store (Figure 8.8), where Koreans shop for luxury goods, then the people who seek Gmarket would not have been as enthusiastic. Internet marketing basics is accurately knowing the fundamental psychological state of shoppers. But the majority of people who manage e-commerce sites manage the markets with a Digital conservative mentality, that is, the thought that consumers shop at department stores or high class malls, which is why consumers are ultimately leaving. Instead, Gmarket, which accurately read the nature of fast trends, fast fashion, was able to build Korea’s best e-commerce site. Portal sites are the same. Right now, the most famous and actively managed portal site in Korea is Naver. However, in the beginning it was Daum. What is the reason that Google, with the best search engine, does not have much power in Korea? We are able to determine through observing this phenomenon that knowing the consumer is not something that can be done by just assuming what they think. It is the same logic as the same category of business doing well in some neighborhoods while not doing so well in others. Google (Figure 8.9) is mostly used by Digital modernists. But the majority of consumers who use Naver in Korea are Digital ludens or Digital boomers. Here, the issue is how much fun is the information and how much does it help? Of course, from the Digital modernist perspective it is hard to see this as information. Again, let’s go back to the reason why the world’s best search engine, Google, is not doing well in Korea. Google fits its function to the needs of the core consumer, Digital modernists. They did not even think of reading the desire of Korea’s main Internet users, such as Digital ludens or Digital boomers. But Google is not interested in a service that appeals to Digital ludens or Digital boomers because they have no need to. On the other hand, Naver thoroughly follows the digital Korean’s consumer characteristics. It is possible to know that by looking at the real-time search words, a service that Naver promotes. To the majority of Koreans, who always want to follow the general trend, who always want to be part of and share the star of the general trend, there is no other service that is as important as real time search words. It is a phenomenon that is possible because it is a society in which everyone needs to know what the general trend is and one has to be dragged into the issue the majority of people are interested in (Figure 8.9).

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Google (top) and Naver

Let’s first look at the American Drama fever in Korea.There are American drama fans who are crazy over Prison Break, Gossip Girl, Desperate Housewives, The Big Bang Theory (Figure 8.10), CSI, and Numb3rs. Since when and how did American dramas become popular? The American drama craze is an item that can be easily understood in the context of Koreans as digital geeks. The Digital chic group chases the trend. So, as they long for the trendy lives of New Yorkers they become obsessed with Sex and the City. girls in the younger age group go crazy over Gossip Girl, and men who have similar tendencies to these women watch Desperate Housewives. There are cases where people who are completely different from the Digital chic get into American dramas. This is the case of Digital ludens. They watch American shows not because of the trend but because the shows themselves are novel and fun. In a word, they become absorbed by their unique character. This is a characteristic of Digital ludens. They stay up all night downloading the series and stay up all night watching the series. So they cannot watch what is aired on TV.

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FIGURE 8.10

CBS TV program The Big Bang Theory

This is because they are familiar with downloading everything at once and watching everything at once. Like this, even if it is a group that is in a completely different situation, it becomes fascinated by the phenomenon of American dramas. This is because it is not possible to pass by American shows from the perspective of chasing trends and blindly following the general trend. Their basic mindset is the thought, “I have to watch American shows since it is said to be the trend! You lag behind if you don’t.” American show fever occurs like this and spreads. Game business is more complicated than dramas or entertainment programs. If Neo-renaissance first makes games thinking it will be fun then Digital ludens play it staying up all night and Digital boomers come to play thinking, “I’m going to do it since all of my friends do it.” The game world is made through this route. The mobile game Angry Birds (Figure 8.11) that was all the rage in Korea is the same. Digital ludens first enjoyed this game as if they were crazy and next it spread through Digital boomers. However, the path Digital modernists or Digital conservatives take to being interested in games is completely different. Their interest starts from the thought, “Are there any enterprises that could do away with the current predicament we are in now? Shouldn’t we earn some money?” The process is like this. Digital conservatives start to peck at Digital modernists. Digital modernists shout, “Games are trending lately and it’s a hit!” Then Digital conservatives say, “Okay, go and make a proposal then.” It starts like this, but it is certain to fail. This is because no matter how novel and refreshing the ideas they put out are, they cannot follow the passionate and self-satisfying creativity of the Neo-renaissance. Moreover, it is likely the new thing that they suggest is something that has already been tasted.

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FIGURE 8.11 Angry Birds and Henri Holm, ex CEO of Rovio Entertainment, creators of the globally successful game

Now, how will major corporations react when this kind of situation occurs? They say, “We cannot do game enterprise. We have to save face.” So they stabilize their business by acquiring all the existing small game companies. However, they are also likely to soon fail.This is because Digital conservatives and Digital modernists lack the will that is not special in the least to the Neo-renaissance.The only case a major corporation entered the gaming industry and succeeded was CJ Media. Samsung has a record of having tried its hand in the gaming industry and failing early on. It is because the people who lead this world and breathe in this world are a completely different kind of people from Digital modernists or Digital conservatives. The new digital mankind, digital geeks, exist in the everyday life we experience. Knowing their dispositions and characteristics is a big help in understanding what kind of frame of mind I view and experience the world from.This is because the world I experience and accept completely changes according to my mindset and values. Likewise, consumer phenomena best represent all actions we each differently understand and embrace. If I exaggerate a little, it can be because there are as many diverse actions as the number of people that exist. Then shouldn’t the marketer’s method of approaching the market also change according to consumer type, consumer mind, and consumer reaction? Stereotypes in marketing only produce broken marketing.

Notes 1 2 3

Rogers, E. M. (1962). Diffusion of innovations. New York: Free Press. Why do Gangnam Madams prefer ‘iphone’? Economy – The Korea Herald, Mar. 29th. 2010 https://en.wikipedia.org/wiki/DAGMAR_marketing

9 MARKETING PSYCHOLOGY IN DESIGNER-GOODS CONSUMPTION

Royal if you have a lot of money? One day, I heard from a friend who used to work as an editor of an English newspaper and is now a magazine editor in Hong Kong. He asked me if he could see me when he came to Seoul and asked,“I’m making a magazine that deals with designergoods consumption in Asia and this time I’m going to investigate Korean’s designergoods-consumption culture. So I have to go visit Seoul—will I be able to meet you?” He was working on research about designer-goods consumption with the world’s greatest luxury group Louis Vuitton Moet Hennessey (LVMH). My friend added, “I am curious about what Koreans think of as royal.” It was a very interesting question. Once I showed my interest, my friend explained the research content in more detail. There are Asian countries that have royal families and countries that do not. In China and Korea there are no royal families, but Japan, Thailand, Malaysia, and Indonesia do have royal families. The existence of a royal family means that society is very status conscious, it also means that the general public sees them as a class on its own. The royal family is perceived as a class that has something special. My friend said he wanted to know how people see ‘royalty’ in countries without royal families, such as China and Korea. He wanted to know how people expressed or showed oneself if one has the highest social status or if one is different from others in a unique way. In addition, he said he wanted to check if this kind of desire or need meshed with the consumption of luxury brands or not. There is a case that shows in its own way what royal is inside our minds. Let’s think of the hit drama Goong that aired a few years ago. You have no idea how popular it was. It was so popular that once the drama was over people said,“Although there is no current royal family, what about resurrecting a new royal family?” Goong was originally a cartoon. It started from a hypothesis of what would happen if there

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were still a royal family in Korea, just as in England. The main male character is a prince of noble descent and the main female character is an ordinary woman from an average family. The viewers were able to experience royal family life, at least indirectly, through the drama. They experienced the royal family’s culture, customs, lifestyle, and values. Come to think of it, I think people thought those things were impressive. They thought, “They live differently to me, but they have that something we admire.” Afterwards, another royal family drama was released that had a similar concept to Goong, titled My Princess. But people were apathetic about My Princess. It was a story about restoring the royal family, but in My Princess what symbolized the royal family was not apparent enough (Figure 9.1). The live broadcast of the wedding of the UK’s Prince William was a case that showed how much attention the existence of a royal family and their special occasions attracted from the public and how much love they received from ordinary people. When I heard that over two billion people in the world watched the marriage and that the British were moved to tears, it seemed like the existence of the royal family functioned as a pivot upon which people experience belonging. It apparently has produced a new kind of collective experience that is on a different level in a democratic society. But in our country, there is no royal family. It has long

My Princess (top) and Princess Hours, royal family TV dramas from 2011 and 2006 respectively

FIGURE 9.1

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disappeared into the stuffy old past. In this society, it is very interesting to study what relationship exists between consuming so-called luxury brands and what is seen as royal. As soon as my friend arrived, he did an interview to find out how the Lee dynasty, referred to as “Korea’s last royal family,” is accepted by Koreans.The subjects were people from all sorts of backgrounds, such as the general public, history scholars, the director of the National Museum of Korea and college professors. I investigated the psychology of Koreans looking for royal things, using the material gained from the interview. Who did they think of when the term royal family was mentioned? Which class of people do Koreans refer to as the royal family? The findings were surprising. When Koreans refer to a royal family, the first group they thought of was not the descendants of the Lee dynasty, but the conglomerate Samsung family (Figure 9.2). As in a newspaper headline like, “What the Royal Family, the Samsung Family wore Today,” every move that the Samsung family makes attracts public attention. Thinking of plutocrats as a royal family means anyone can be a member of the royal family if they have money. Maybe it was because not many of the public thought of the last prince of the Lee dynasty, Lee Won, as royal. The director of the National Palace Museum of Korea argued that the equation plutocrat = royal family is nonsense. Although it is not possible to deny that plutocratic families like the Samsungs have a lot of money, he emphasized that having a lot of money does not mean you can be royal. He cried out that this kind of thinking itself was vulgar. He said being royal is not an issue of how much money one has. It is about what kind of an example you show the public. Historically, not only the Lee dynasty but

FIGURE 9.2

Members of the Samsung family, who are considered aristocrats

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all royal families have tried to be seen as exemplary models for the nation by keeping the royal dignity. When people show their social status or position through money, brand-name goods are the easiest things. Directly bragging about having a lot of money can give an impression of being obvious and vulgar. However, something exchanged for money could be more of a symbol that shows one as being different from others. So people who want to be seen as rich, even though they are not actually rich, look for brand-name goods. This phenomenon appears even more clearly in a society where being rich becomes an important characteristic to distinguish one person from another. Brand-name goods are items that best show that you are rich with something other than money. Even then being royal will certainly not mean you have a lot of money. There is still doubt that one becomes royal just because one consumes brand-name goods. The increasing number of people spending on brand-name goods in Korea, where there is no royal family, means the brandname consumer group is becoming more diverse and segmented.

From Johnny Walker to vintage French wine Korea’s consumer market has changed a lot as its economy has expanded. Lifestyles are also becoming more diversified. This phenomenon is noticeable, especially in luxury good consumption. The consumption of cosmetics clearly shows what the change really means. Forty to fifty years ago in the days of our mothers, people felt proud of having even one Shiseido cosmetic product from Japan. They believed they would be seen as rich; Shiseido cosmetics being that valuable at the time. Now, in Korea, Shiseido is no longer a luxury item to envy at all. If you go to the department store, you will find that Shiseido has been pushed to the back for a long time now. World-famous products and unfamiliar brands shine under the dazzling lights. There we can meet a countless number of luxury brand cosmetic products starting from the most expensive lines of La Mer, Fresh, and La Prairie. Of course, among these there are domestic brand cosmetic products like Sulwhasoo, a hit item among Korean housewives. It is to the extent that people say if you go somewhere and take out a Sulwhasoo sample everyone will look at you. In early 2012, a company had a rummage sale of Sulwhasoo samples. Something surprising happened. In an instant, the samples of the entire line were sold out. The luxury goods we talk about are no longer the property of a small minority of brands from abroad. Now let’s turn back the clock and go to 1988. After the Seoul Olympics, as foreign brand products flooded into Korea, extravagance and overspending were mentioned in relation to luxury goods. Foreign brands were expensive and, from another perspective, were not well suited to a social atmosphere that cried out for thrift and saving. So derogatory terms were created indiscriminately, like orange tribe, meaning the immature children of the wealthy. People who spent excessively to show off their wealth were criticized and under-rated. Along with that the level of antipathy towards the upper class increased because they

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indiscriminately embraced foreign brands, shown by just how frequently there used to be rallies against excessive spending at the time. However, at some point the social atmosphere changed. It became a world where using luxury foreign brand products no longer meant being an overnight millionaire. The changed world started in the early 2000s. From then on people started to loosely call all foreign brands, prestigious brands. Even for brands or products made in Korea, if they were considered to be more expensive or special than similar products, then they were immediately labeled as prestigious brands (Table 9.1). The word prestigious was applied to prestigious apartment, prestigious education, prestigious service, and so on. And it came to symbolize something more luxurious, more expensive than other products in the same industry, something that was of good quality. Thus, prestigious-brand products became accepted as something that everyone envied and not just what some people consumed while conscious of disapproving stares.The popularization of prestige-brand goods began. It was a new era where prestige-brand products were consumed in everyday life and where everyone experienced different luxury products. It was a change that happened in an instant in the early 2000s after the IMF economic crisis and as the economy recovered and improved. As prestige-brand consumption rapidly rode the wave of popularization, a few problems became prominent. As the two values of excessive spending and generalization clashed, many controversies and irrelevant events related to prestige products also erupted. One example is the appearance of term like Shopaholics

TABLE 9.1 Psychology behind luxury-brand spending by period

In 1990s

Group Orange, the appearance of young prestige product consumers Prestige products = excessive consumption

“We will crack down and punish ‘Group Orange’ to prevent the cause of excessive consumption” (Yeon-hap Daily, Jan 29th, 1993)

Early and mid-2000s

Increase in prestige product consumption Prestige products = show off

“We will sell our products to people who know their value” (Korean Economics, Oct 16th, 2000) “Group of people who try to find their identity by purchasing items are called ‘Bidentity’ … They seem similar to prestige consumer groups but their finance can’t support their desirable life” (Dong-a Daily, Apr 1st, 2005)

Current 2000s

The division of prestige products consumer groups (popularization and differentiation)

“Prestige products are not decided by price. Prestige product consumers get younger and they want something that is luxurious and at a proper price” (Joong-ang Daily, June 24th, 2010)

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or Brand seekers, which show that luxury products become the people’s desire (Figure 9.3). Shopaholics is used to describe a consumption behavior that pays US$4 for a coffee after a US$2 lunch snack. Of course, it exudes a nuance of criticism. On the other hand, the phrase New release women is made up by a public mind that envies celebrities who purchase newly released luxury products as if they were collecting them. Gold digger (Denjangyeo) and Shoppers of new products (Sinsangyeo) are not differentiated. That kind of talk has become unchic. This is because luxury good consumption has become part of everyday life. It is a situation where if you only look at consumer behavior or consumption tendencies, consumers living in Seoul have a taste equal to or higher than most New Yorkers. Once there was a time when Loser man became a big issue. Actually, I am not sure why a certain woman, liking tall men or not, and that standard being 180cm or not, has anything to do with me, but in Korea there was a national sentiment that spread like fire. Koreans become quite outraged when a situation they cannot understand happens in front of their eyes or when a situation occurs that is misaligned with the norm. However, a situation you cannot understand usually means something new has appeared and, even if it is something that varies from the norm, as time passes it becomes the new norm. It is the same with luxury-brand

The movie The Devil Wears Prada clearly displays the fever and the frivolous nature of luxury consumption

FIGURE 9.3

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product consumption. This is the reason we have to know the pattern of luxurygoods consumption. In other words, it will be possible to predict social change only after studying the background of how luxury-goods consumption has become the new consumption culture and understanding the consumer at its center, understanding their behavior and psychology, and predicting how that consumer behavior will change. Only 20 to 30 years ago the best gift to exchange was foreign-made brand-name liquor. However, now the gift that Koreans prefer the most has become a prestige product. These days a prestige product has changed to quality wine. Like this, the luxurious item that the public consumes changes in time. Foreign cosmetic products were once the general trend, which became high-priced spirits and then the public preferred the finest wine. It is possible to determine from this that consumer awareness of the consumption of prestige products changes according to the time, and according to the change in values of the people living during that time. So the prestige-product consumption phenomenon should not be seen in the simple frame of prestige product = excessive spending, prestige product = showing off and going along with it. Consumption of prestige products is no longer an issue of price. People who used to exchange cheap Johnny Walker’s Black Label wrapped in glittering wrapping paper as gifts are now exchanging vintage wine in an antique box to foster an image of a sophisticated city bohemian and throwing away the image of an overnight millionaire with a gold necklace.

Prestige productaholic Korean, I am curious about your mind There is a magazine called Luxury, which had been in print for ten years in March 2011 (Figure 9.4). A reporter from that publication came to me saying she was planning to run a special feature on “Koreans’ prestige-product consumption tendency, how has it changed?” for the tenth anniversary special issue. Korea has become a kingdom for shopping products of prestige brands so much that even the Japanese and Chinese come to buy them. It also means that the domestic prestigeproduct market has become more vital. It is a country where even college students brazenly carry around high-priced brand bags. What on earth do prestige products mean to Koreans? When consumer groups are said to be divided by the values and lifestyles they pursue, what is the psychology of people that go wild over prestige products regardless of their social economic status? I was interested in the phenomenon of our country’s people going wild and obsessing over prestige products, but I was even more interested in the psychology that lies beneath the buying behavior. Just what was that something that made Koreans hang themselves on prestige products? Prestige-product consumption is not a simple buying behavior. The thoughts, stances and views are all different like the stance that one shouldn’t indulge in extravagance; the saying that one should at least wear an imitation of a prestige product to not be slighted; the opinion that what does anyone have to do with me spending the money that I earned; and so on. In the case where each different thought or value applies to a particular consumer behavior like this, the possibility

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that psychology will intervene becomes higher. As a psychologist who is curious about Korean behaviour, I have always pondered over how our society’s prestigeproduct fever could be explained. It is not easy to understand the specific phenomenon that occurs in front of our eyes by just reading books or dissertations. So, like the anthropologists who go into the field to collect evidence of the research subject’s specific behavior, I proceeded with my research activity in that way. I have met many brand-name shop managers and many brand-name marketing managers. I also listened to many stories from the VVIP customers, who use major prestige-product stores, like the Lotte department store Avenue, about their prestige-product consumption experience. I investigated the average person’s thoughts on prestige product consumption, as well as people from various classes, and met consumers who pursue various careers to study their different reaction. I also gathered articles in the press and mass media. What will happen if I categorize the people who engage in the consumption of prestige-products? What are the core values and desires that are revealed by Korean society’s prestige-product consumption tendencies?1 A conventional belief in Korea

FIGURE 9.4

Luxury magazine

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is that people with a lot of money will consume luxury brands. In addition, the term, ‘Veblen Effect’, commonly used to explain the fever of luxury brands in Korea, is named after the American economist Thorstein Veblen, who first identified conspicuous consumption as a mode of status-seeking in The Theory of the Leisure Class (1899) in the late nineteenth century. If it is applied to Koreans’ love of the luxury brand, it is a kind of show-off behavior. However, if we identify the different minds of luxury consumers, we may know more diverse and prestigious characteristics on the consumption of luxury brands. Although a show-off is quite an important feature, conspicuous desire should not be a suitable reason to explain luxury-brand consumption. Identifying the minds of consumer means to establish a new marketing strategy. No marketer would emphasize the conspicuous desire as the reason to buy the products. Interestingly enough, there are lots of marketing stories for luxury brands, usually emphasizing the royal, the tradition, the craftsmanship, and the culture, etc.Where do they come from? Are they the real desires of luxury-brand consumers? If we can ascertain the consumers’ mind for prestige products, we expect to have lots of clues to make a new marketing strategy. The specific mind of consumers and a marketing story of the mind could be easily produced along with an insight into human behavior. The research questions would be as follows: • • •

•

What significance do prestige products have for Koreans now? What difference is there in terms of consumer behavior now compared to ten years ago? There is a big difference and change between people’s thoughts about prestige products in the past and people’s thoughts on prestige products now. What are they? Compared to ten years ago, Korean people’s current income level has increased substantially. Thanks to that, it is easier for people to access and consume prestige products. Then did the psychological satisfaction that people tried to gratify through prestige products become higher? How did it change?

In order to know this kind of change and difference in detail we first have to understand what kind of people are the core consumer group that represent prestige product consumption now and in the past and what their psychological characteristics are.What kind of people are the consumer groups that are clearly divided from each other with prestige-product consumption at its center in Korea now? How have these groups changed compared to the past? It is not possible to ride a time machine and interview people in the past and discover the characteristics of their consumption of prestige product.Therefore, it is not easy to find an answer to these questions. However, it is possible to find an answer if we clearly determine the characteristics of the main consumer group that represents the prestige product consumption characteristics that current people show. •

What are prestige products to Koreans now? How did Koreans’ think or act about prestige products in the past compared to the psychology and behavior in the consumption of prestige product of now?

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What kind of people is the consumer group that becomes clearly categorized from each other with prestige product consumption at the center? What are there psychological and social characteristics? What are the standards, values, and lifestyles each respective prestige-product consumer group considers important when it comes to prestige product consumption? Who is the core consumer group that currently leads prestige-product consumption in the Korean market? What is the psychological code and mind map that becomes known through prestige-product consumer groups and what could be the prestige product consumption marketing strategy?

As a result of studying people’s psychology codes, related to the consumption of prestige products, it was revealed that these Korean consumer groups are divided into four types. These four types simultaneously revealed the images of past and present with eight different minds.The images of past and present have revealed the prestige-product consumption psychology that is hidden. Accordingly, I was able to find a total of eight psychological codes for Korean prestige-product consumption. Depending on how each of these psychological codes is interpreted, we can better understand Korean psychology in the consuming behavior of prestige products. Also, we are able to compare past and present states.

Eight prestige-product-consumption types I determined the eight different kinds of mind that appear when engaged in prestige-product consumption, the eight consumer-group types are: Self-sufficient type, Fantasy type, Noble type, Show-off type, Daily-life type, Unconditional type, Self-realization type, Avatar type. In 2011, the groups that could be most clearly identified in Korean society were the consumers categorized by the psychological codes Self-sufficient type and Fantasy type.

Self-sufficient type: you who have worked hard, carry your Chanel If you are someone who says something like the following in relation to your prestige-product consumption, then you are the Self-sufficient type: • • • • • • • •

Instead of dressing up entirely in prestige products, it is classier to mix and match with inexpensive outfits. It is very important to have a distinct personality that is different from others. Prestige products have inherent tradition and symbolism. Purchasing prestige products is giving me a gift for working hard. I buy classic items more than trendy products when purchasing prestige products. There is a prestige-product brand that I particularly like. I purchase prestige products that fit my image. Brands like Hermes, Cartier, and Louis Vuitton that are connected with art are the real high-quality brands.

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I always buy prestige products at the store or duty-free shop. It does not suit one to carry around prestige products without having one’s own particular image/appearance, fashion sense, and intellectual appearance.

These people seek rationality in their consumer behavior. They are young people who have confidence in their lives and live diligently in their own way. However, they have not accumulated a lot of wealth, but they purchase prestige products as if they were giving themselves presents. Of course, they do it with their money which they have earned.They purchase prestige products as a kind of reward for their hard work. For them, prestige products are linked to a great feeling of pride.They think they can buy what they like whenever they want, and if somebody scolds them about prestige products then they can react by saying,“Why do you care when I’m buying it because I like it?” If they have a bit more money to spare, they do not say no to overseas travel and overseas shopping. Considering this kind of consumer tendency I have named them the Self-sufficient group. The Self-sufficient type thinks of prestige products as necessary accessories for social life (Figure 9.5), but actually, these are people who do not have a clear personality, style, or identity. This is because they want to follow what the general public says is good instead of creating their own identity. Interestingly enough, the Self-sufficient group takes what others say is good as their own, but have a hard time chooing their own things themselves. Instead of taking a risk, they purchase what others think is nice or what is safe among what was featured in the magazines or other media sources they have seen.They believe in an easy and comfortable life. It is the same kind of thinking that believes one’s life will become great and one will live well if one is accepted into a prestigious university or is employed by a first-class firm. For the Self-sufficient type, prestige products are rewards that one gives oneself for living life diligently. Although the criterion for selecting prestige products is

The Self-sufficient type, as in US TV show Sex in the City, thinks of prestige products as necessary accessories for social life

FIGURE 9.5

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unclear, they try to purchase it within their available resources. Therefore, they deliberately consume classic brands and they try to buy the so-called must-haves that everyone supposedly needs to have. For these people, magazines or other media that has information about prestige products are relatively important. The Selfsufficient type assigns a practical reason to their consumption of prestige products. They legitimize or idolize the product itself. They also emphasize the artistry and classical quality of prestige products. Therefore, they try to get the kind of prestige products that do not have logos on but can still be recognized by everyone as prestige products. This is because they think that this way of purchasing is much more elegant. In a word, they have the consumer consciousness and cognition that prestige products are expensive, but buy according to their capabilities.

Fantasy type: I will be a great, with the luxury goods Although the Self-sufficient type feels their capabilities with the prestige products, the Fantasy type comes to have those abilities with the luxury brands. The mind of ‘the Fantasy’ is like “I become a member of the prestige group by getting the prestige products.” It is well expressed in the following statements: • • • • • • • • •

A well-made imitation product is good enough to be purchased. I enroll in an information exchange community or education for the kind of prestige product I want. Luxury is idleness or vanity. I watch prestige-product brand launch shows on the smartphone or the Internet. I purchase the product that has been bought by many other people as well. I buy the items that famous people buy. When purchasing a prestige product I buy it after reading the reviews meticulously. When I buy a prestige product, I show it off to other people. When consuming prestige products I check the company’s morals, ethics and fairness.

What these people actually value is how others see them. Therefore, they want to be seen as someone who is economically well-off. Prestige products are a channel to satisfy their wishes. Therefore, people of the Fantasy type try to buy at least an imitation of a prestige product if they cannot afford the real thing. We see this happening around us. However, they try hard not to have their real motivation— the fact that purchasing a prestige-product is a big deal—discovered. So they maintain the attitude that it’s not a big deal whether the product is real or fake! The Fantasy type definitely has a lot of interest in prestige products. However, it is hard for them to carry out their interest to make purchases. They may not have a lot of money but have a lot of time to spare. So they meticulously study various products on purchasing sites and enjoy watching launch shows related to prestige products on cable networks. Since buying a prestige product is a big deal to them they always read

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other people’s reviews. The prestige people they know of is a key criterion for purchasing a prestige-product. This is because they want to satisfy the fantasy of feeling like a famous person by having what they have. It is also a manifestation of the desire to make someone else’s halo of recognition and acknowledgement their own. Therefore, when purchasing prestige products they prefer what others will recognize. I they do not have the ability to spend then they at least buy an imitation product. The Fantasy type usually has an ambivalent feeling about prestige products. This is because they are not in a situation where they can easily make purchases of prestige products. So, although they think buying a prestige product is great and very reasonable, when they see others carrying around prestige products they denounce them, saying it is showy and vain. They especially react sensitively to whether the product other people have is real or fake and make a false rationalization, pretending not to care for what they actually want, but do not or cannot have. Ultimately, the consumption of prestige products for the Fantasy type has a fantastical characteristic of imagining living the life one admires instead of revealing the individual’s own values or lifestyle (Figure 9.6).

Noble type: motto of prestige-product life is class and dignity. The second pairing of types that become clearly differentiated are the Noble and Show-off types. In the case of the Noble type, their taste for prestige products is relatively clear, but in the case of the Show-off type, you can think of the

FIGURE 9.6 Louis Vuitton’s Champs-Élysées store in Paris, France, where the Fantasy type’s dreams might come true

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person who uses prestige products to reveal that their social status is different from others: • • •

• • • • • • •

I have my own standards about prestige products, whether someone else acknowledges them or not. It is very important to have my own personality and be different from others. I think Korean luxury is patchwork (quilt), lacquer, small portable dining table, spirit/mentality of classical scholar, hanbok (traditional Korean shrine), and so on. An environment-friendly life is a truly luxurious life. I buy classic items when it comes to buying prestige products instead of buying trendy pieces. Showing spiritual luxury, such as sophistication and erudition, is real consumption of prestige products. Since they are not all good quality, even if they are prestige-product brands, I purchase with caution. Instead of dressing up entirely in prestige products, it is classier to mix and match with inexpensive outfits. There is a prestige product brand that I particularly like. The ultimate prestige product is not a fashion item, but art.

People with the Noble type psychology code are relatively familiar with the purchase of prestige products. The level of consumption of these people is higher and their cultural taste is also classy. For them prestige products are considered as that special something as long as it has cultural flavor and artistic taste. They place a higher value on spiritual luxury than talking about prestigious products based on their material worth. Showing artistic value and tradition is their lifestyle as related to prestige products. The house they live in is like a museum. They have a lot of pottery that can be called works of art and they usually live in a traditional-style vintage Korean house. This is because they think their lives should show Korean tradition and style, but they also have opinions on Western cuisine and culture. The psychological code of the Noble type in their consumption of prestige products is elegant life and style, dignity in life (Figure 9.7). So for them prestige products are not particular brands but are products or lifestyles with strong artistic or cultural tendencies. They frequently consume what others call prestige products and are familiar with them, but they do not insist on a particular brand, nor do they have much loyalty towards a particular brand. People who are part of this type consume prestige products as a tool to make one’s life full of richness and elegance. A person who shows the consumer tendency of the Noble type is a working person who is more concerned with the artistic and cultural aspects of life than the daily necessities, such as food, clothing, and shelter.They are not in a very prosperous state economically, but they are clear about what the important values are in life.They have high cultural and artistic knowledge, and they consider spiritual values and dignity of life as important above all. The majority of people think that to maintain the

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FIGURE 9.7 The Noble type’s psychological code in their consumption of prestige products is elegance and dignity

dignity of the Noble type there has to be money to spare. However, for the Noble type economic stability is not the absolute accumulation of wealth but increasing the degree of satisfaction in their lives and finding moments to spare in daily life. In our society, there are a lot of people who pursue cultural knowledge and class without earning a lot of money. Some show what a Noble life is through the work they do. In everyday life, they exude class by way of prestige products. They are the, so-called, artists of life. Instead of materialistic consumption, they seek environmentally friendly lives and consider prestige products not as luxury brands but life’s values and philosophy. Therefore, they like to talk of a prestige-product life or a well-being life.

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Show-off type: don’t wait, show it off first People are now tired of life dominated by the fetishism of capitalism. Everyone is busy finding an alternative as they shout about well-being. Korea is not an exception. The Noble type lifestyle has surfaced as the one that many people aim for in this kind of social environment. It is the same when it comes to the phenomenon of consumption. If the psychological code for the consumption of prestige products that leads at present is the Noble type, then the Show-off type is the psychological code that was once recalled, along with the words consumption of prestige products, in our society. • • • • • • • • • •

It is okay to purchase a well-made imitation. Luxury is idleness or vanity. You have to buy what others say looks good on you, instead of what looks good to you, to have no regrets. I also buy the product that many other people have bought. When people do not recognize I have on a prestige product I become upset. I feel uncomfortable when I go to the prestige product store. When I purchase a prestige product, I show it off to people. I purchase hit items that famous people use. When I go to the prestige product shop, I ask what the most popular product is. As long as I am buying something, I purchase trendy pieces.

The consumer pattern of the Show-off type is similar to the Fantasy type. However, there is a clear difference in the way they express themselves. If the Fantasy type tries to show the wealth they do not have as if they have it, through prestige products, then the Show-off type reveals their wealth and success through prestige products. For the Fantasy type, wealth and success belong to the area of fantasy, but for the Show-off type it is a picture of the life they have accomplished. They were once called overnight millionaires in our society.These people actively used prestige products as a means to show others their success. However, as the consumption of prestige products became common and popularized it seemed that people with the Show-off type psychology code no longer existed. People with the Show-off type psychology code show themselves off through the purchase of prestige products and try to receive attention and recognition from others.They anticipate that prestige products will increase their social status, position, or value. For them prestige products are that special something that can be bought with money. Therefore, they see prestige products as the easiest way to confirm and receive recognition of their wealth. They try to have all the prestige products that others consider good, and they diligently use them because they think prestige products confirm their social status. For them education has the same meaning as prestige products, so they send their children to good colleges and try to complete the management course for executives at prestigious universities themselves. This is because they consider one’s social status will increase depending on education.

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The Show-off type usually has a weak self-identity. They do not have a clear and distinct personality or style. However, their wealth and way of life are seen as something that’s to be envied by others. The people in the Show-off type also recognize this point, so they do not feel uncomfortable acting full of confidence. This is because they recognize very well that other people accept this as having both a clear identity and personality. Thus, prestige products become equal to their identity. The Show-off type values prestige products as a means to increase their social status and as a way to show off their wealth. They think that imitation products can be purchased as well. They have some purchase information regarding prestige products, but they are rather ignorant on the symbolically expressed cultural knowledge. For them prestige products are nothing more than what is for show, what is a rather expensive way to decorate oneself. The Fantasy type emphasizes that the prestige product they own is a famous one and the Show-off type emphasizes that it is famous and expensive. The expression they frequently use, “Do you know how famous and expensive this is!” reveals the psychology code of the Show-off type as it is. If the Show-off type uses prestige products as a means to exaggerate the wealth they do not have, then they can be seen as the Fantasy type.

Daily-life type: prestige-product consumption from cradle to grave This is the group that verifies the fact that Korean society has become economically affluent. The fact that these people have become the principal agents in the consumption of prestige products also means that in current Korean society it is no longer a special consumer behavior. • • • • • • • • • •

I have my own standards about prestige products, whether other people recognize them or not. There is a particular prestige product brand that I like. It is very important to have my own personality different from others. I always purchase prestige products at the department store or at the duty-free store. I buy prestige products that are a perfect fit for my image. Instead of dressing up entirely in prestige products, it is chic to mix and match appropriately with inexpensive outfits. People around me frequently say that I have my own distinct style. Prestige products have tradition and symbolism. There are times I impulsively purchase prestige products without a plan. Taking proper care of your skin is like consuming prestige products.

For people with the Daily-life type psychology code, prestige products are just a part of daily life. They have been using prestige products since they were young. They have particular brands they like and they have high brand loyalty in their own

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way. For the Daily-life type, prestige products are not special. They do not like other people mentioning prestige products as something special. The Daily-life type people have their own sense of sophisticated style (Figure 9.8). These are usually people who are given VVIP treatment at the department store. They do not display their style or prestige products to others.They show themselves as they are. For them prestige-product consumption is not a special event but is a familiar consumer behavior. They have long experience of purchasing from a particular brand, they make their own personality or style very clear, and they enjoy a self-centered and an individualistic life. People who are included in this type consider the management of their image and living standard as very important. This means they value their style more than recognition or interest from others. The majority of prestige product shops introduce newly released products in advance of the season launch show to this kind of customer. These people have a high level of knowledge regarding prestige products and have various information channels.They don’t really pay attention to what others have to say on prestige products because they have abundant experience and philosophy on prestige products. If it is a style they like, they purchase it without being restricted by the price. They shop a lot, not only domestically but also overseas. It can be seen as the consumption pattern of the group that is included in the saying, “Korea’s top whatever percent.”

Unconditional type: I like it even if it is just the appearance If the Daily-life type is the ideal affluent consumption form admited by the Korean general public, then the Unconditional type clearly shows the process of the universalization of prestige-product consumption in the suddenly-affluent Korean society. For them a prestige product symbolizes everything that others say is good, something that I wish other people would recognize.

FIGURE 9.8 Hong, Ra-hee (left), Director of the Leeum Samsung Museum and wife of Samsung Group Chairman, Lee, Kun-hee

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A well-made imitation is a good, okay product to purchase. If a man is knowledgeable about prestige products, it gives the impression he is a very sophisticated person. When I buy prestige products, I show them off to people. When people do not recognize that I am wearing prestige products, I become upset. Luxury is laziness or vanity. I can’t trust whether prestige products sold domestically are the real thing or not. When I carry prestige products I feel like I’ve become someone much better. I feel uncomfortable when I go to the prestige product store. There is no regret if I buy something that others say looks good on me instead of buying what looks good to me. I meticulously read other people’s reviews of a product when about to purchase prestige products.

The person who has the Unconditional type of psychology code is clearly differentiated from the Display or Fantasy types. With these kinds of people, there are a lot of cases where they do not have something that clearly reveals who they are and that defines their identity. However, the Fantasy and Show-off types seek what is ideal by linking prestige products to what they want to gain, like economic capability or social position. But in the case of the Unconditional type, they chase what other people say is good.They envy what others have, unconditionally, despite their personality or identity. They are the kind of people who feel it is difficult to create their own identity, life values, and lifestyle on their own. They try to earn a lot of money without an aim, but in their own lives they try to live according to circumstance, adapting to matters as they come. People who are included in the Unconditional type judge others by the standard of whether that person uses prestige products or not, and what kind of products they use frequently. That is, they use the fact of whether that person can consume prestige products or not as the standard for figuring people out.They think a person is very refined if he is knowledgeable about prestige products, and after purchasing prestige products they become impatient to show them off. The Unconditional type, that has a desire to possess a high awareness of and preference for prestige products. They can correctly guess the brand name of a friend’s prestige product just by looking at its silhouette. However, they do not have taste or the knowledge to fully use prestige products. When someone says they are buying prestige products, the Unconditional type is ready to help with enthusiasm. They also let you know whether it is real or fake, like an expert. They do this even though they themselves carry around imitations because they do not have the ability to purchase prestige products. They see prestige products as something that needs to be had or that must be carried around to show other people. So there are a lot of cases where they see this as an acknowledgement of wealth or a means of display (Figure 9.9). Therefore, they go wild over famous celebrities or

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FIGURE 9.9 A duty-free shopping mall—a favorite destination for the Unconditional type

famous brands. They prefer big and noticeable logos or tags as long as they are on the same prestige product. They are especially affected by advertising or promotions like star marketing. They have an illusion about prestige products and they unconditionally prefer something that is said to be a prestige product.They believe without question that prestige products will be good and they also believe this because they think it is good if it is expensive.

Self-realization type: consume with my own taste As prestige-product consumption became popularized some started to debate how rational this kind of consumer behavior was. Then the marketing area started to mention the rational reason for consuming prestige products. At this time the most apparent and appropriate reason that was suggested was personality. It was the perspective that sees prestige-product consumption as the expression of personality, or the satisfaction of personality. It is the stance that looks at prestige products not as luxury items but as products that differ depending on the individual consumer’s taste. The group that represents the effect of this kind of marketing is the Selfrealization type. • • • • •

It is very important to have my own personality that is different from others. Instead of dressing up entirely in prestige products, it is classier to mix and match with inexpensive outfits. It is not suitable to carry around prestige products without having one’s own image, fashion sense, or intellectual appearance. I have my own standard about prestige products that does not take account of whether someone else acknowledges it or not. I buy classic items when it comes to buying prestige products instead of buying trendy pieces.

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Showing spiritual luxury, such as sophistication and erudition, is real consumption of prestige products. Since not all prestige-product brands are good quality, I purchase them with caution. It is better to invest in self-improvement than prestige product shopping. There is a prestige product brand that I particularly like. An environment-friendly life is the truly luxurious life.

People with the Self-realization type of psychology code have very distinct tendencies and personalities. It is hard to say that they have much economic power, but above all they know how to guard their taste and they are quite obstinate in their consumption. They maintain and follow what they prefer instead of the general consumption trend. They consider their style is distinct. So they are not conscious of other’s glances and they consume specific designs or brands, like ethnic style (the style that reflects Africa, the Middle East, South America, Asia and the uniqueness of other area’s traditional clothing) prestige products. The Self-realization type is not bored with daily life because they pursue their own tastes in life. To others they seem like the passionate type who enjoys life to the full. In a lot of cases they live alone because they seek a lifestyle with a distinct identity and style. To them prestige products are nothing more than tools to show their own personality. To them prestige product consumption is an extension of the personality they aim for or an image of life they want to show. So, instead of blindly following the trend they pay attention to a brand or a particularly designed product that makes them stand out. In Korean society it is not easy to consume prestige products as a Self-realization type. However, due to an aggressive marketing effort, the Self-realization type has come to claim that the luxury brands represent themselves regardless of the image of brands. A good example of the Self-realization type is the pattern in the consumption of prestige products best represented by Michelle Obama’s fashion style (Figure 9.10). It is the attitude that one pursues one’s identity through prestige products but one can use any product that suits oneself comfortably even if it is not a prestige product.

Avatar type: You are my ideal. I will be your avatar The Avatar type reflects a composite character of the Fantasy, the Show-Off, and the Unconditional types. However, the Avatar type are different from them because they are more focused on the self. They think the luxury brands make them someone they dream of.They become somebody they want to feel like or seem like with those products. The prestige products must be purchased because they make the person. • •

When I purchase prestige products, I show them off to other people. I get upset when people don’t recognize I have prestige products on.

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FIGURE 9.10 Not conspicuous, but humble. It is a description of First Lady Michele Obama’s fashion style. It is also a way that Self-realization types manage prestige products for their own taste

• • • • • • • •

I buy items that famous people use. I can’t trust whether prestige products sold domestically are real or not. If a man is knowledgeable about prestige products, he gives an impression of being very sophisticated. I ask what the most popular product is when I walk into a prestige product store. I enroll in an education or information exchange community about the prestige product I want to have. It feels like I’ve become a much better person when I have prestige products on. When purchasing prestige products I buy after meticulously reading other people’s reviews. I buy what many other people buy as well.

These people like prestige products and frequently purchase them. But in most cases they are people who aren’t able to establish a clear identity. To them prestige products are something that makes them somebody’s avatar. They symbolize a famous celebrity, figure, or a person of considerable wealth. They anticipate that their own social status will improve by using the prestige product that the chosen person uses. In the case of the Avatar type, prestige products fulfill their desire to increase in social status and are also representative symbols that show a more upgraded version of themselves. Their taste in and knowledge of prestige products is relatively low, but they have a very high preference and desire for prestige products. When other people have prestige products they think it is shallow, but they believe they become much more elegant when they have them.

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In Korean society, most college students or young women in their twenties have the minds of the Avatar type (Figure 9.11). Since the economic power of most women in their twenties is still very small, it is hard for them to start using designer goods. But by thinking, “If I carry it like that, if I wear it like that, then I think it will look great,” they will try to have the prestige product even if they have to over extend themselves. They want to be socially recognized through prestige products because their identities and their lives are uncertain. For a person with a high desire to live elegantly and with sophistication, there is a high probability of being the Avatar type. It is highly likely that for people in their twenties, which is an age group that has a lot of unemployment, the consumption of prestige products is an unfamiliar spending activity. Yet, if these people still try to engage in consuming prestige products, nine times out of ten they reveal an Avatar mind. The Avatar type first considers how other people perceive a particular prestige-product. They think that if others say it is good they should have it as well and show the trend-follower tendency where if the majority of people do it then they want to do it as well. They do not know their style or

Poster for the movie Little Black Dress, based on the novel My Black Mini Dress—Dreams of Luxury Brand, but Outlets in Reality, reflecting the mind of the Avatar type

FIGURE 9.11

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personality, but they think it is revealed through prestige products. However, if anyone says their consumption pattern is the Avatar type they will be offended. As observed thus far, there are clear differences between the eight types (Table 9.2). The Self-sufficient type has the ability to buy prestige products while the Fantasy type doesn’t. While the Self-sufficient type has rationality, planning ability, and selfacceptance, the Fantasy type is dependent on others.The Noble and Show-off types are fundamentally different in what they think is important. That is, if they first think of class and culture then they are the Noble type and if they prioritize economic power and social recognition they are the Show-off type. If the Daily-life type uses prestige products in daily life to reveal their lifestyle or tendency, then consumers in the Unconditional type think that all prestige products are great and if one only had enough money one could buy prestige products.The Self-realization type is fundamentally self-centered. The Avatar type, instead of not having a personality will try to reveal themselves through prestige products. This is because they have the expectation that they will seem greater and finer if they use prestige products.

New prestige product marketing When you come to understand each different consumer group then it is possible to understand how things changed in the past and how they are changing now. And you are also able to identify the current dominant consumer group. The current group that consumes prestige products shows the kind of consumption that looks for a justification, an answer that elegantly satisfies desires. In the past, however, desire was emphasized much more directly, but criticism of prestige-product consumption was strong too, with the tendency to make the phenomenon into a social issue. Back then, many Koreans were extremely reluctant to have a desire that had to be hidden from others, or to reveal their innermost thoughts. Also, they thought it was vulgar to reveal one’s unconcealed desire, although that kind of atmosphere has been mitigated recently. Prestige products have a different meaning for each Korean, such as: something I buy once in a while after working hard to earn the money for it; something needed to naturally enjoy dignified culture; something I use naturally in daily life; or something special that I use to express myself and my individuality. The Selfsufficient, the Noble, the Daily-life and the Self-realization types all focus relatively on the present and emphasize themselves. On the other hand, the Fantasy, the Show-off, the Unconditional and the Avatar types are all consumer groups that were clearly visible in the past. To Koreans, in the past, prestige products satisfied life’s fantasy and were something you had to have at least one of to show off to others, a must-have if others had it or (like the Avatar, there is no self here) owning something special and expensive that filled in for who they were. These consumer groups all have in common the fact that they are all agreement oriented. There are people who show this kind of characteristic even now.

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TABLE 9.2 Psychological code of eight luxury-brand consumer types

Self-sufficient type “Buy it according to my capabilities”

Fantasy type “Celebrity X carries it around”

• necessary accessories for social life and rewards that one gives oneself • assigns a practical reason and legitimizes the product itself • although seeks own style, doesn’t have a distinct individuality • consumption depends on economic capability

• has a lot of interest in prestige products but cannot purchase easily • ambivalent feeling about prestige products (great, reasonable vs. showy, vain) • sensitive to famous people and trends

Noble type “It should be highly cultural and artistic”

Show-off type “Do you know how famous and expensive this is!”

• purchase based on artistry and history of product • does not cling to brands themselves • familiar with purchase of prestige-products and considers cultural and artistic dignity • high cultural and artistic knowledge

• reveals wealth and success through prestige products • usually has a weak self-identity • prestige products are a tool for showing off

Daily-life type “I know what that is!”

Unconditional type “It is good if it is expensive!”

• prestige products are just a part of daily life • individualistic and self-centered life • has knowledge and philosophy on prestige products • loyal to favorite brand

• must be carried around to show others • believes there is no correlation between purchasing capability and standard of living • can accept fake item • clings to famous people and brands • does not have taste or knowledge of prestige products

Self-realization type “It should be able to represent me!”

Avatar type “It will take me to a higher place!”

• has very distinct tendencies and personalities • emphasizes maintaining and following own preferences • self-satisfaction consumption • always looks for something unique and brand is not important to them

• anticipates social status will improve by using a prestige product • has weak self-identity and characteristic • prestige products will enhance identity • simple mind who tries to find self through prestige products (delusion, vanity)

In the consumer psychology of prestige product, for the Korean living in the twenty-first century, the present and past psychology, discussed above, appears as a mix. This means that the present Korean mind, that thinks of prestige products as something that anyone can have, and Korean desire in the past to show something different from others through prestige-product possession, are mixed up.

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Unfortunately, these two desires do not separate perfectly in reality. What kind of significance does this phenomenon have? Which marketing strategy has to be chosen to enter into the rapidly expanding Korean consumption of prestige products? From here on, with this concern, I will review who is the leading group in the consumption of prestige products in Korean society. As observed previously, Korean consumption groups of prestige products are subdivided into eight types. However, it is hard to know which group is currently leading Korea’s prestige product consumption culture. Which group among these eight prestige product consumption groups do you think is the greatest? Or is there a type you think you want to be like? The reason I ask this is simple. Korean consumption groups of prestige products greatly emphasize individuality and the self.They will, nine times out of ten, use a strategy that strengthens the image of using this prestige product because “it makes me shine and it simultaneously shows and satisfies my personality.” Of course, they have been doing that up to now. The Self-realization type is the very group that best reveals the Korean desire to pursue elegance in life and become graceful. Even if they are not like this in real life, the majority of people wish for this kind of life and seek it out. What people in marketing actually discuss the most are the Self-sufficient and Self-realization types. However, after categorizing the prestige-product consumption groups, the life mode that all people ultimately aim for is the Noble type. Among the eight groups, the Daily-life type does not put much meaning on consuming prestige products, so they are excluded from becoming marketing’s subject. The Noble type is also difficult as a marketing target because they have the objective of increasing the class level of their lives and they look at prestige products as if they were an artwork and not just a product. Who are the core consumer groups that lead prestige-product consumption in the Korean market? They are precisely the Self-sufficient and Self-realization types. Korea’s prestige-product market is led by young people and shows the characteristics of being spread rapidly and forming groups. It is a phenomenon that compares to the Chinese consumption of prestige products led by the Show-off and Unconditional types. China’s consumption pattern of prestige products is similar to Korea’s of ten years ago. It is in this vein that Chinese visitors buy five times more prestige products than Japanese visitors do. How should a marketing strategy be formed not only to consider the most receptive audience, but also to have a widespread impact on various consumer groups? Let’s think of Howard Moskowitz’s research once more. In the Pepsi and spaghetti sauce experiments, he was able to confirm that there is no single flavor that satisfies everyone’s taste, but that there are a variety of flavors that satisfy a variety of people. It is the same with prestige-product marketing. There is no one sort of marketing to satisfy all eight consumer groups. Therefore, companies have to clearly determine which consumer group they are going to appeal to first when developing a new product or establishing a brand strategy. This is because each consumer group has different values when consuming prestige products (Table 9.3).

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TABLE 9.3 Different values by luxury-brand consumer types

Self-sufficient type “Buy it according to my capabilities” Something that one is able to purchase Noble type “Do you know how famous and expensive this is!” Elegance and style Daily-life type “I know what that is!” History of stable life

Self-realization type “It should able to represent me!” Expression of self-identity

CAPABILITY

Fantasy type “Celebrity X carries it around” Something that one has to maximize one’s capability

LEVEL

Show-off type “It should be highly cultural and artistic” Expression of one’s wealth

CONDITION

IDENTITY

Unconditional type “It is good if it is expensive!” When my budget allows me to buy it Avatar type “It will take me to a higher place!” Prestige products take over self-identity

The Self-sufficient and Fantasy types value ability, the Noble and Show-off types value status, the Daily-life and Unconditional types value conditions, the Self-realization and Avatar types value the self. If a certain brand were to decide to do brand management that considered the consumer group’s ability, standard, tradition and self-identity, and manage all of these consumer groups, then they actually wouldn’t be able to appeal to any consumer group. If a certain brand does this then the only standards that are left would be how famous the product is and what the price is. There are actually many diverse marketing strategies related to prestige products in our society.Table 9.4 mentions various examples related to each psychology code, according to each type. In the Fantasy type case, star marketing stands out. In the Daily-life type case, the superstar or VVIP strategy works. The Unconditional type use the belief that prestige products must be bought. The Avatar type responds to aristocrat marketing because they want their avatar substitutes to live like aristocrats. The group that purchases prestige products within big supermarket chains is highly likely to be the Self-sufficient type who values rationality and practicality. The Noble type usually purchases such items as air conditioners designed like artwork or Andre Kim’s refrigerators under the pretext of the collaboration between art and prestige products. However, the Daily-life type makes purchases in the prestige product market around a particularly successful brand or product. These people have brand loyalty so they mainly use independent stores called flagship stores.These types of people think of shopping in department stores as inconvenient because when they go to a flagship store the manager treats them as a VVIP and recommends new products without having to ask. These people

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TABLE 9.4 Different marketing strategies used for luxury-brand consumer types

Self-sufficient type • rationality, practicality (duty-free shop, outlet) • have interest in prestige products store at shopping mall Noble type • emphasize the artistry • collaboration of prestige products and artistry

CAPABILITY

LEVEL

Daily-life type • brand loyalty (flagship store) • most popular brands and products

CONDITION

Self-realization type • differentiated strategy • creative concept (creativity is the prestige)

IDENTITY

Fantasy type • celebrity marketing (use media contents) • core target of celebrity marketing of prestige products Show-off type • celebrity marketing + high price strategy • top celebrities,VVIP strategy Unconditional type • high price strategy • bicycle ($10,000) Avatar type • attracted by noble marketing • top 1% marketing without recession

naturally consume new products through this process.To the Self-realization types, select shops are recommended as a differentiated strategy. Like this, it is possible to know the different store type each consumer type prefers and sticks to. The representatively successful prestige product marketing that could be held up as examples are star marketing, high priced strategy, star marketing + high priced strategy, and aristocrat marketing. Of course, these appeal to different consumer groups as well.

Upgrade your life story Brittany Kim is a, so-called, sammonim that everyone envies. Her husband, as the marketing department head of a major company, has the highest salary among the same age group. Her husband occasionally does special lectures due to his long, specialized career. Since he uses the money he earns from those lectures, she uses his entire salary for living expenses. After getting up in the morning and sending her children and husband off to school and work, she drives her Lexus to the exclusive fitness club that overlooks the Han River. She plays golf twice a week with mothers whose children are in the same class as hers. Once or twice a month she is called by the manager of the department store’s select shop and does some newrelease shopping. She lives by the motto of using prestige products without being vulgar, of not making the prestige products shine but using the prestige products to make her life and the whole family shine like prestige products. She, who grew up so-so under a father who was an elementary school teacher and married a husband

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who attended a topnotch university thanks to her good looks, says she is happiest when she drives an elegant car, carries a luxurious handbag wears and Italian designer shoes. She is happy in this moment when she is living not as the youngest daughter in the so-so household of the stingy teacher, but as the elegant wife of the marketing department head at a major firm. She believes she will have the ultimate, most successful life if her husband advances to a higher position and if the children study well. To Koreans these days prestige products not only signify luxury goods. To them prestige products have a significance beyond material good. This is because by purchasing prestige products they want their lives to become upgraded like prestige products. When debating the psychology related to the Korean’s consumption of prestige products this is a point that must be considered. To Koreans, the consumption of prestige products does not end at purchasing luxury goods, but is a realization of the way of life each individual wants to pursue and achieve in daily life.The behavior that best shows the Korean equation of prestige-product consumption = way of life, is the admission into prestigious universities. People commonly feel satisfied buying and possessing luxurious handbags. They do not consider it important to know what kind of history or what kind of cultural significance that product has. They do not try to know. They do not even know what they have to do to manage and use the expensive product well and what the particular characteristics of the product are. It is like considering admission to a good university as important without thinking deeply about the quality of the university’s education or curriculum after that admission.These days protests that urge decreased university tuition fees happen quite often. When thinking of this problem, as related to Korean consumption of prestige products, the outcome is very unexpected. The demand to decrease the price of tuition wouldn’t occur if students thought the university they attended was the most prestigious (= prestige product) university. But after exerting one’s utmost to be admitted to the prestigious university, the students find out that there is not much difference between their university and other universities. The people who teach the students who attend the school are of the same sort. Here, we can read the somewhat bewildering mind of Koreans related to prestigious universities and prestige products. Actually, the stores that sell prestige products offer discounts as little as possible. It is part of the capitalist society’s marketing strategy for prestige products that tries to keep those prestige products prestigious. Even if they are occasionally discounted—as rare as a seed sprouting during a drought—only a very few special customers receive notice. Some consumers confess that they do not buy discounted prestige products. This is because the prestige product that has become popularized is no longer that special something. On the other hand, the students of prestigious universities, that are the, so-called, prestige product of education, demand discounted tuition very strongly. Tuition is a cost that is paid to buy the product that is called college education. In some contexts, to the students of Korea’s prestigious universities, prestigious education seems to be on the same level as cheap goods sold in Dongdaemun market.

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Students who are being educated in Korea’s prestigious universities requesting decreased tuition show the fact that they currently do not recognize the education they receive as prestigious. It means they think of it as a product that can be bargained for at the market rather than a prestige-product. No matter how much the colleges claim to be prestigious and how they provide a prestige-product education, if the consumer buying that product recognizes it as a discount store or market product, then that college becomes a place that sells fakes. Looking at how college tuition becomes a societal issue and how each college responds to student demands to decrease tuition, it is possible to realize that the majority of prestigious universities definitely find themselves in a similar situation as stores that sell imitation products.The actions of the students, who are the consumers buying the products, make it possible to know the store’s nature and the level of the products sold there. If they thought the college education they were receiving was a product that could only be purchased at the prestige-product counter at an exclusive department store then they wouldn’t throw a tantrum asking for a discount. It is possible to argue that it is the psychology of thinking of it as a prestige-product but wanting it at the most inexpensive price possible. It is like the psychology of buying prestige product brands at outlet stores. How the prestige-product consumption psychology Koreans show is reflected in its society’s various issues, and how that shows our way of life is not limited to the decrease in college tuition fees. We are each directly related to what living well in this society means and the problem of how to live. Prestige-product consumption is an interesting indicator sign of who you are and how you live. Also, it informs what each of our beliefs are about life and how this appears in what kind of consumer behavior. A while ago an acquaintance said to me, “Professor, the reason you are able to adapt well to Korean society even though you have a lot of attribute that stand out from others is because of your educational background.” It is a diagnosis that says, “You are able to survive because your educational background makes you stand out like a prestigious brand purse and it also protects you well from rebukes and attacks even if you do something that draws people’s attention from this society.” It means that in Korean society educational background is like an expensive luxury bag that adorns a person to make them look great and help one live well. Likewise in our society, prestige-products go way beyond the meaning of being an expensive product provided by a luxury brand. It makes your life different from others. It even has the connotation of protection. We often use the expression it item to mean that it is an item we must have. If we look at the various expressions about prestige-products (such as: in order not to feel small compared to others; something that one ought to have at least one of; at least one considering the gaze of others) Koreans seem to prefer to purchase prestige products not because of the characteristic of the product itself but in order to answer to the gaze of others.They want their lives to be seen as more refined, upgraded stories. Ultimately, prestige products have become a very important symbol to Koreans, that show not a particular brand’s product but a slightly exaggerated version of our lives.

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Prestige-product consumption: prestige-product life Prestige-product consumption in Korean society is one of the easiest ways to show how much money you have. Let’s understand this fact. After this there will be no objections to thinking of Korea’s prestige-product consumption from two directions. First, to Koreans, prestige-product consumption is one of the necessary and sufficient conditions that compose the way of life they consider to be right. That is, it is no different from the life pattern of people whose lives are considered correctly lived. So even people who cannot economically afford it strong relate the prestige product’s characteristic to their own individuality. In this case, regardless of economic situation, they try to present their lives as being as elegant as possible through the simple act of prestige-product consumption. Here I want you to pay attention to the expression I am elegant. No matter how much money one has, Koreans think it is vulgar to reveal it directly. So they try to present their lives as elegant and as luxurious as possible. They go to prestigious universities, prefer employment at major companies and try hard to form a marriage with a good household—they enroll in a marriage bureau, paying tens of thousands of dollars in application fees to arrange it—at the very least, they try to carry around a prestige-product purse. Everyone tries to look for the appropriateness of prestige-product consumptions, as if they themselves become a prestige-product if they possess prestige products. Secondly, Korean society’s current prestige-product consumption reveals the mind that wants to say, “Look at the outside since there is no inside.” It means when the two minds are revealed (different on the inside than on the outside), they become one. So if what is shown to others is prestigious then even if the reality is a well-made imitation product, they do not think it matters much. Most Koreans do not clearly realize their individuality or style. This is because they have been pressured to live a life that kills individuality and have unceasingly received an education that emphasizes not standing out. All they think they know about individuality is by showing it through a couple of brands they favor. On top of that, nine times out of ten they think something expensive is something good. The majority in our society thinks like this. In other words, instead of standing out with a lifestyle full of individuality, they tend to look for life’s answer by engaging in consumption that follows the majority in society. It is the consumer behavior of the, so-called, wannabes who think, “I want to become someone and receive attention and recognition.” So they follow the trend and purchase “it” items to draw attention or receive recognition from others. To them prestige-product purchase is the safest and the most elegant way to satisfy the desire to be recognized. It can be seen as the manifestation of the desire to follow the majority while still expressing one’s individuality. Unfortunately, each individual’s identity does not appear clearly. While investigating prestige-product consumption psychology, you come to know the core desire of Koreans and how to satisfy it. Some can be hostile to the

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idea of revealing everything about their minds. However, exploring your motivation is another kind of pleasure. This is because great insight into humans can be gained. You can discover what the reason for one’s existence. Our lives are actually a process of expressing desire and satisfaction and prestige-product consumption is what helps each individual to express their desires in a more roundabout and elegant way. In the past caste system of Korean society, there was a fixed way each person could satisfy desires according to their social standing. Regardless of how much money one had, if one’s social status was low then it is a given that there is a limit to one’s desires. However, it is different now. Now it is possible for each individual to express their desire and satisfy it from a relatively limitless level. Although, this kind of behavior makes us pay! Above all, desire does not give us satisfaction that lasts. Desire brings a similar level of loss, remorse, and regret comparable to the pleasure of satisfaction. The moment the desire is satisfied, one tastes the despair of loss or remorse, and this is the cost that ought to be paid by humans. I see that money and achievement best reveals people’s desires, especially in our country. When looking at people without money who consume prestige products, workers in the adult entertainment industry come to mind. This is because it is not a consumer behavior that confirms one’s identity, but a Show-off type consumption that is carried out following pressure from others. It confirms having money through prestige products or trying to gain societal recognition through this kind of consumer behavior. Therefore, what they talk about on the outside is a Birkin bag from Hermès but the key point is actually money and societal recognition. Likewise, prestige-product consumption in Korean society is that something special that reveals one’s existence, that special but very accessible channel. Previously, we have observed eight kinds of consumer types in prestige product consumption. The Self-sufficient type consumes through their one’s ability. The Fantasy type consumes by trying to emulate while following celebrities.The Noble type pursues spiritual prestige products, and the Show-off type emphasizes the prestige-product image by showing off to others.The Daily-life type is very used to using prestige products as part of in their lives. On the other hand, the Unconditional type focuses on the expensive price. The Self realization type thinks of what suits them best as important (but this type is rare among Koreans). The Avatar type confirms one’s status through consumption. To them it is most important to determine where they lie. I will talk about my case. I aim for the Noble type but I occasionally show the image of being the Self-realization type. Because I aim toward the Noble type some might see me as the Show-off type. Like this, determining which type one is while looking at the prestige product consumption types is a new opportunity to discover one’s self in daily life. Which type are you?

Note 1

Veblen,T. B. (1899).The Theory of the Leisure Class. An Economic Study of Institutions. London: Macmillan Publishers.

EPILOGUE I exist, therefore I am happy

Consumer psychology study for a special Korea You have finished the long journey of investigating people’s consumer psychology. The people are clients from the company perspective and are consumers from each individual’s perspective. If they gather around similar dispositions, characteristics, or reactions then they are the public. With everyone as the subject, we have categorized them into groups according to whether they have particular and similar dispositions or their diverse reactions to various phenomena, organized them according to type, and observed their characteristics.Through that process we have determined if the marketing of the past pursued that one thing that appeals to everyone, then the marketing in the present is going in the direction of valuing the minds of many. The psychological analysis of consumption phenomenon or consumer behavior in the past was an investigation of the psychological process that is part of people recognizing a product and then purchasing it. It was a result that met the expectation of the psychologists and management scholars who believed that consumers would be logical and reasonable. However, that expectation has long been shattered. Today’s consumer psychology research is more interested in why a client has more interest in a particular product, how consumers try to show themselves through consuming a particular product, and how the people called the public build their lives. Instead of focusing on what product is sold well, they try hard to understand who are the people who buy particular products. For example, they do not study which smartphone sells well, but first they become interested in who uses the iPhone, who uses the Galaxy S, who uses the Galaxy Note and who uses the Optimus View. In other words, it is having an interest first in the person who chooses the Optimus View. They dispense with the vague assumption that people (the consumer’s mind) are rational and reasonable, and they investigate the consumer’s mind

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under the realization that humans are emotional and their minds and actions are often irrational and diverse. Consumer psychology research, above all, shows well who each person living in this society is and how the various social phenomena occurring in this society are related to their lives. We humans who live in a capitalist society solve our life problems and satisfy our desires through consumer behavior. So as we chase the point of contact between satisfaction of desire and life’s problems we can gain insight into who we are as people living in this society and how we have to live. Through the diverse cases explained previously, we have determined many facts. It was possible to determine how many things we consume throughout our lifetime, how much time and effort is spent in worrying over possessing something, earning money for it, and consuming it as we desired, and how many different lifestyles there are according to consumer behavior. Then let’s momentarily reflect back on life’s problems. In proceeding through school, employment, marriage, parenthood, and so on, when we are confronted with life’s various problems how much effort do we put into living as we want to? Do we worry over it as seriously as when we buy our first prestige product handbag with our saved monthly salary, or when we buy our first car? Are you not steering your life blindly in follow mode, like the time when you bought something that others said was good without knowing exactly what you wanted? Like buying at least one of the “it” items that everyone needs to have to be seen as presentable to others! No matter how much research is done, no matter how many diverse investigations are conducted, if the outcome is not directly related to people’s happy lives it is of no use. Even if people cannot readily answer the question of how they are living these days by saying it is amazing, the majority of Koreans ask why one is living so diligently and are answered nine times out of ten with, “In order to become happy!” This is the reason I placed the final goal of my consumer psychology research as each individual’s happy life” It is because I read this mind. Now it is time to end the journey. In the epilogue I look at what kind of effect consumer psychology research can have on ensuring that Koreans’ have happy lives through looking at the two issues of politics and life’s values.

The reason communication and voting are consumer behavior The TV advertisement for POSCO that started to air in March 2012 was very striking (Figure E.1). It was one of a series of advertisements that was broadcast as part of a communication campaign. Mr Choi, the head of the advertisement department, learns the shuffle dance in order to get along well with the younger employees. It is a move that seems easy but when you actually try to do it your legs become tangled because his arm and leg movement are uncoordinated. When looking at Choi, you even start to feel pity as he works hard on the moves, despite looking awkward. But Choi is having a good time while learning the shuffle dance and stepping to the music with his young colleagues. For now the shuffle dance communication is a success. Of course, the problem of communication is

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2012 POSCO TV-CM campaign on the theme of mutual understanding and communication

FIGURE E.1

not solved with just the shuffle dance, but through learning the shuffle dance and dancing together, Choi understood the young people’s psychology of liking rhythmical dances. Communication was possible because of that. Like this, the problem of communication has to start by confirming exactly what each other’s minds are in the process of resolving, in big and small daily occurrences. I have studied what each different reaction and psychological code means to particular issues and incidents in Korean society over the past ten years. At some point, people started to speak out saying that there was no communication in Korean society and that they wanted to communicate well. Everybody said that they had been taking the problem of communication seriously. They complained that communication was poor because each person has different thoughts. The representative expressions that reflect this thought are ideological words like leftist, rightist, and liberals, and conservatives. Is thinking different thoughts, having difficulty communicating and fighting each other and seeing each other as enemies all because of ideological or regional differences? In the past we saw the obstacles to communication that were commonly experienced as a social phenomenon, as either an ideological or regional issue. This conventional way of thinking is stale. It originates from the frame of thought that believes most people’s minds are different depending on age, sex, or region. But these kinds of standards are not fit to be used as tools to study people’s minds. This is because each individual’s difference reflects the different psychological codes in each person. If the psychology code is different, not only is it hard to communicate, but it is difficult to understand and there is an enormous difference in their thinking and behavior patterns. Koreans are very poor at revealing their exact thoughts and feelings on a particular issue or matter.The biggest reason is because they cannot diagnose the exact problem and understand it. The second biggest reason is because not only do they not know their own psychology code, but they cannot read the psychology code of others that show a different mind from theirs.

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The most dramatic situation where each different psychology code expression materializes is during an election.When seen from the aspect of consumer psychology and consumer behavior, elections are actually not much different from the action of choosing the most tolerable product among the products out in the market. If consumption in the present appears as various products, then elections show what consumers think of a particular figure or party. Formally, elections are part of a political action that elects a figure that represents the nation. However, this is clearly a very specific consumer behavior that expresses each different consumer’s mind. Let’s say you were participating in an election. When you say you support a certain candidate, can you really say that the person represents you and your thoughts well? Have you ever thought of what he or she could do specifically for you after he or she has been elected? Probably not.Then what is an election to you? An election might not be electing someone that represents your thoughts. Let’s think about presidential elections. By experiencing a fierce publicity campaign, you collect information from a particular product (party). If you are someone who has a lot of interest in politics then you will voluntarily collect information and do a comparative analysis, and if you only have a so-so amount of interest you will gain information through TV debates or public programs such as campaign speeches. There will probably be people who also turn off their interest saying, “Damn it, screw politics,” or “It is like choosing the lesser evil.” This time let’s suppose it is a situation where you have to buy something that you like, which you haven’t done in a long time. It doesn’t matter if it is a situation where you have to pick out a gift rather than buy something for yourself. You will certainly look for information by comparing products online to buy that very nice something that you have wanted for a while. You will study your friends’ reactions and you will thoroughly read other buyers’ reviews. There is almost no one who suddenly buys a high-priced brand item saying, “Hmm, I’ll have this one!” This is because purchasing something means satisfying one’s mental desire while bearing economic loss at the same time. Now, let us compare selecting a particular candidate for president and buying a luxury-brand wallet at the department store. Which one is more important? Of course, everyone will answer that it is the presidential election. However, in reality we attach greater importance to going to the luxury section in the department store and buying one more designer wallet (the national election commission will probably say that citizens should seriously consider electing the president as important above all, but our actual behavior is not like that). Maybe you think of presidential elections not as the country’s regular event but as election day = day you rest after voting. So you might not collect information about the candidate and stay up the night before voting. Likewise, when comparing each individual’s behavioral aspect towards elections and spending, the psychological energy spent on the election is much weaker than the energy spent on buying a nice wallet at the department store. Here I am not trying to deal with the issue of why that is, nor am I saying that electing a president is less important than buying another luxury item. All I am trying to remind people of is that presidential elections from

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the consumer psychology perspective of an individual’s choice and decision can be less important to the individual than going to the department store and buying another wallet. This is because both elections and consumer behavior are issues of choice that depend on each individual.

What we want from the nice and incompetent guy next door It was not long after President Roh, Moo-Hyun was inaugurated (Figure E.2). The presidential aide contacted me saying that he wanted to know people’s minds regarding the president. At the time, the Blue House (the presidential residence) knew that of the entire nation, 20 percent supported the president, 20 percent opposed the president and 60 percent were uncertain about the president.The Blue House was curious to know if this result was real. He said he wanted to know people’s thoughts in more detail. This is because they thought they had to know what the people’s thoughts and feelings about the president were exactly to tailor his image. Now let’s switch perspectives. If you were the president, which group would you put more interest and energy into among the three different types of people? I hope you won’t say something like Confucius and say, “Shouldn’t the president embrace everyone and go towards integration mode?” This is because it is not a problem of which group the president regards with hostility or embraces, but it is asking what the image of the president is to a particular group and what kind of image should the president promote. What does it mean for the president to have a clear image that can be recognized by the people? From a marketing perspective (when thinking of the president as a product), is it not establishing a selling and marketing strategy while focusing on a particular consumer group? Many people actually say, “Isn’t it right to have a policy or image that focuses on the people who support you?” But the people who support the president will support the president no matter what he does. So they are not the subject of the worry over the problem of the president’s image. At the time, Roh’s aide also knew this much. He also said that he knew quite well how the classes of people who support him see the president and what kind of expectations they have. Additionally, he said he knew to a certain degree what the kinds of thoughts people who oppose the president had.

Former President Roh, Moo-Hyun, who had the image of a nice and humble man next door

FIGURE E.2

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He confessed that since they will oppose whatever the president does, he will have to give up on them for a while. So what the Blue House really wanted to know about was the minds of the 60 percent of people who neither supported nor opposed the president.They were curious about their innermost thoughts and how they perceived the president. He said they anticipated focusing on those people’s psychology code and establishing the president’s image and policy direction towards their way in the future. At the time, I was curious what kind of image Roh had among the people. So I first determined the psychology code about the president in people’s minds, and I was able to inform the Blue House aide that the people who are moderates see the president as the guy next door. At the same time, they think of him as a slightly incompetent figure. If our neighbor man was someone very capable and successful would we be as comfortable with him? Probably not. If someone who lives next door is superior to me, it won’t just be one or two of his attributes that will make me uncomfortable. Tiredness will come like a tsunami when thinking of each and every aspect of daily life that will draw comparison. In daily life it is better to deal with average people who are just so-so.Then what can the comfortable but slightly incompetent guy do to capture the hearts of the people next door? How can he gain their trust in undertaking such an onerous task? This was the task of establishing the marketing strategy that could sell the president. Someone is the leader of an organization and that person is nice and comfortable, but he is incompetent. Now, how can that person capture the hearts of the members of the organization? How will people respond if asked this question? People will probably think if he is the leader of an organization then he has to display his capabilities. But if he is incompetent then there is a problem with the leader. In order to perform the role of the leader well, it is necessary to gain the trust of the people first and be competent before being someone nice. But if everyone perceives him as incompetent, then it is a big problem. For a leader to demonstrate leadership it is a problem of abilities; above all, it is an issue of how people around the leader perceive that person. People surrounding the president at the time actually thought the president should show the people his abilities. They considered that people perceived the president as incompetent or disregarded him as a big problem. They came to think that he had to clearly show his abilities, that a clear change should be prepared for as a result. However, that kind of big change does not happen overnight. Even if that kind of change occurred, it is unlikely that the nation would participate in it with one heart. In this situation, with what kind of mind will the people see the comfortable but seemingly incompetent president? We usually become anxious when someone in the neighborhood who is nice and easy going, but incompetent, tries to do something big. We will wonder why is he trying to do something big when he should just do what he is comfortable with.We also worry whether he won’t get himself into some kind of trouble.What an easy-going guy next door can do is put his neighbors at ease. He can exist quietly and take care of small but important work. He can select the work that the people

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can sympathize over and handle it. If he determinedly shows himself doing good deeds, such as cleaning up the streets and making meals for the homeless, then people will slowly come to acknowledge his ability. Then it might be possible that the people will ask him to do something bigger. Then the nice and comfortable but incompetent guy next door will start doing that work as he says, “Although I don’t have much capability, I’ll try my best.” Wouldn’t it be best to go in this natural direction? I said this to the aide, but he did not seem to like it. Maybe he thought that it was necessary to change his country’s impression quickly. Ultimately, Roh, Moo-Hyun came out to the market as a product called the president but he did not gain much popularity. He ended up being a product that was very good but there was no way to publicize it so ultimately he wasn’t sold very well. This case can be said to be marketing’s failure where, although the people’s reactions and minds were read, superiority was handed over to conventional thinking. However, once he returned to being an easy-going guy next door, people even accepted his being incompetent as a good thing. Now he has become the most respected president (excluding Park, Chung-hee, who was president for 18 years) in Korea, despite the fact that he was president for only five years, and that he received the first storm of presidential impeachment during his term.

Benjamin Franklin’s thirteen virtues of life How do the values an individual seeks and pursues reveal one’s life trajectory? When an individual’s values and society’s values collide, what do we choose? If this moment of choice becomes decided on values, then how do our values come to be? Benjamin Franklin is an important figure to the American people. He, one of the Founding Fathers, is also the figure on the highest-value bill in America, the $100 bill (Figure E.3). He was actually a scientist who invented the lightning rod. He had worked in a printing office since he was little because he wasn’t able to receive proper education. He learned how to read there and later he earned a lot of money. Afterwards, he founded the University of Pennsylvania and became the most reputable and wealthy person in the eastern Philadelphia area, which was still England’s colony back then. How was he able to succeed when he came from a family in a difficult situation and he didn’t receive a proper education? How did one person encompass the roles of politician, ambassador, and scientist and carry them out so well under a colonial power, having to work to gain independence

Benjamin Franklin, who appears on the US$100 note

FIGURE E.3

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from Britain, and being at the forefront in the early years of the nation’s founding? The answer is in the life values he set out, because he led his life through the clearly established values he set. Values are what expresses oneself above all. The values Benjamin Franklin collected over the course of his life amounted to thirteen, among which he counted moderation as the most important and he expressed it in his own way (Table E.1). Moderation to him was avoiding excessive eating and drinking. Imagine the life of a person who had made moderation a virtue since they were young. Think of how this person might seem to others when knowing how hard it is to avoid drinking and eating excessively and whether this is representative of them. After succeeding in moderation, he chose silence as his second virtue. To him silence was “speak not but what may benefit others or yourself.” That is, it was his principle not to say useless words. That was silence. Afterwards he set out each virtue, such as order and resolution, and kept to them.The method was to establish one value and after it became familiar establish another virtue. The last virtue he put up was humility. Benjamin Franklin tried to emulate the lives of Jesus and Socrates. If it is a person’s values are to be as humble as Jesus and Socrates then he was probably already an object of envy or an enormously successful person. So no American objects to learning about and teaching Benjamin Franklin’s life.

TABLE E.1 Benjamin Franklin’s 13 virtues1

Temperance Silence Order Resolution Frugality Industry Sincerity Justice Moderation Cleanliness Tranquillity Chastity

Humility

Eat not to dullness; drink not to elevation Speak not but what may benefit others or yourself; avoid trifling conversation Let all your things have their places; let each part of your business have its time Resolve to perform what you ought; perform without fail what you resolve Make no expense but to do good to others or yourself; i.e., waste nothing Lose no time; be always employ’d in something useful; cut off all unnecessary actions Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly Wrong none, by doing injuries or omitting the benefits that are your duty Avoid extremes; forbear resenting injuries so much as you think they deserve Tolerate no uncleanliness in body, clothes, or habitation Be not disturbed at trifles, or at accidents common or unavoidable Rarely use venery but for health or offspring, never to dullness, weakness, or the injury of your own or another’s peace or reputation Imitate Jesus and Socrates

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Also, no one argues against using his virtues as the basis of education. This is because he is the best mentor that shows how much one’s life can change by basing one’s life on the values everyone respects and how actively embracing those values can change one’s life.

Values define the individual What are the values we pursue? Values literally mean usefulness and importance. It is also a word we add while designating a thing, belief, or person. It is also an expression that is sometimes used in metaphysical debates. Now, let’s think of what will be the most expensively purchased thing in our lives. Most people will think of their cars or houses. However, the most important and expensive thing in life is our lives. It means the most important things are how much one is investing in one’s life, how one will evaluate one’s life when one has to leave this world, and what kind of meaning one will grant it. There is probably no one who wants to demean judging their lives by comparing it to mere cars and houses.Then how will you assign the most value to your life? Or will you make your life precious so that no one will be able to put a price on it easily? This kind of work is the process of assigning meaning to one’s life. Looking at the value list in Table E.2, write down the five things that are most important to you and that reveal you best. It is also good to write down something that is not on the list, but that you usually think of as being important or something that shows you off well. I hope you will write down what you thought of as the most important standard when answering the question, “How will I live?” Even if you are used to evaluating life’s meaning with only money, here I hope you will look for something beyond that, like: “Should I do this or that?” “Should I stay at

TABLE E.2 List of values that help you to make critical decisions and that can be a

guidance in your life Responsibility Humor Pleasure Loyalty Justice Service Intuition Fairness Adventurousness Cooperation Security Autonomy Curiosity Self-trust (Health)

Aloofness Sympathy Love Development (Happiness) Sincerity Harmonious family Appreciation Success Belongingness Obedience Simplicity Beauty Creativity Dignity

Humility Financial stability Contribution Positive attitude Persistence Will Endurance Mercy Liberty Emotional stability Career achievement Admiration Honesty Knowledge Independence

Wealth Faith Conviction Friendship Professionalism Innovation Wisdom Quality Balance Generosity Improvement Authority Morality

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this company or should I quit?” How do you manage your life and according to what kind of values or standards do you move when worrying over these kinds of concerns? Choose the values without which your life will become difficult or meaningless. The only condition is not to choose the items in parentheses because those are items that everyone chooses. What everyone chooses is hard to give your life special meaning. They cannot be a value that makes your life special. Some people chose positive attitude, growth, faith, enjoyable life, and passion. Let’s imagine what kind of person he is using those value words. Among these values are there some that go well together and some that do not? Don’t you think that faith stands out on its own? If the value of faith is taken out, this person’s life can be easily imagined. Positive attitude, growth, passion, and an enjoyable life are all concepts that have something in common. This person is probably a person who lives an enjoyable life and happily does what he likes. But the moment the factor of faith comes into this person’s life the situation becomes uncertain. Of course, some could say, “Do you know how enjoyable it is to have faith? You can live much more passionately!” In that case, you can think of the life of a missionary or the clergy. This person will definitely live very happily, enjoyably, and satisfactorily if only faith is removed from his life. It might be possible that he thinks he lives so enjoyably that he might be committing a sin, so he goes once a week to a religious organization to pray for absolution. Regardless, the four values he chose and faith do not seem to have any similarities. Let’s look at another person’s values this time. What he chose were positive attitude, enjoyable life, passion, diligence, and beauty. Maybe this person tried to live enjoyably and then decided to to live more diligently. He chose diligence with a remorseful mind. If he lives with a positive attitude, passion, and an enjoyable life as a motto then he will appear beautiful to others as well. Just knowing these values is living diligently enough. However, by mentioning diligence once more it reveals the psychological state of not having much pride and confidence in one’s life now. It is possible to know what kind of a person somebody is by looking at what a person expresses as their values.

The presidential candidates’ leadership that can be determined by value words A month away from the 17th presidential elections, a newspaper asked me to study each and every side of the presidential candidates. After becoming president, what kind of leader will that person be (Table E.3)? And what kind of action will they take as a leader? At first I thought it was silly, but I granted it because I thought if this kind of study was possible then it would be possible to confirm that person’s politics and figure as a leader a few years later. It seemed like it would be an interesting study in its own way. The research method was simple. It was to determine their leadership pattern after surveying what kind of meaning the presidential candidates assigned to their lives and what they considered the core values that dominated their lives. I first

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TABLE E.3 Leader types

Candidate A Positive attitude, Consideration, Honesty, Creativity, Appreciation

Candidate B Leadership, Humility Consideration, Conviction, Passion

Candidate C Justice, Honesty, Respecting Elders, Conviction, Consideration (about human dignity)

confirmed whether the newspaper was able to cooperate in collecting the information. First, we requested each presidential candidate to choose five values they considered as the most important and that best revealed them. Now I will show the candidates named A, B and C and the values they selected. Do not think of who that candidate is, let’s just evaluate that person through the values they have selected. Interestingly, there was a common choice made by political leaders who tried to become president in 2008: it was consideration.What kind of significance does the value of consideration have to do with Korea’s being political leader? Does it mean they have come into the presidential election to be considerate of the people? Or does it mean that they expect the people to be considerate and give them one more vote? What is clear is that the topic of conversation at the time was consideration. There was even a book titled Consideration that became a best seller. Ultimately, whether Korea’s politicians blindly pursue something that appeals to the public, or whether they show that kind of tendency was able to be determined first. The value of consideration was not a value that they considered most important or one to reveal themselves best. It was only a value chosen according to the situation at that time and that was chosen from the level of following others since others said it was important. It is the same with values like getting along with the family, health, and happiness. Unfortunately, the Korean people were in a situation where they had to choose among political leaders who did not even have their own clear set of values as a president. Maybe they thought people would see them as being worthy if they chose the value consideration. Now let’s guess the future leadership and activities of each candidate with the remaining four values. Candidate A chose positive attitude, honesty, creativity, and gratitude after excluding regard. Let’s determine which values go together and which values do not. After taking out the value creativity, what kind of person comes to mind when looking at the items positive attitude, honesty, and gratitude? That is right. It is the image of a religious person. It is like a member of the clergy. If someone who wants to show the life of a member of the clergy suddenly speaks of creativity, how would you evaluate that person? Would you not think of a person who outwardly seems to live an honest and grateful life like a member of the clergy, but who at heart use all sorts of tricks? If that isn’t it then there begins to be a doubt that what that person seeks at heart does not coincide with the image he shows on the outside. If someone revealed this kind of value, then it is hard to see them as honest above all. This person especially speaks of wanting to be seen as honest and positive, but people will start to suspect his words and will have constant doubts about his actions.

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No matter how great the things this person says, the people will think that this person has another agenda. Or that there is no honesty in what this person says.This is candidate A’s leadership confirmed by the value words he has chosen. Let’s look at candidate B.With the exception of consideration, he has chosen leadership, conviction, humility, and passion. But among these values humility seems a little strange. Leadership, conviction, passion show the figure of a relatively young candidate who actively informs other people of his thoughts. However, in Korean society it is likely that the more a person who seems young emphasizes leadership, conviction, and passion as values, the more he will be perceived as someone who is arrogant. This is probably the background for B choosing the value of humility. B chose how he wants to be seen because of the thought that others see him as arrogant. A similar pity can be felt in the case of leadership as well. Leadership is not a value that decides an individual’s life direction in itself. This is because leadership is the outcome that people come to perceive after a leader has performed the role of leader successfully. Still, the reason people comment on leadership is from the desire that leaders will perform their roles better and that they will achieve a clear outcome. (Leadership itself cannot be a value. No matter how much one claims to have leadership if the people around the person do not follow that person, then it seems as if that person has no leadership.Therefore, it is likely that people without leadership emphasize leadership more.) In this person’s case, most people are made uneasy the more B tries to put himself out there. So B mistakenly thinks that humility is even more necessary. Candidate C selected justice, honesty, respecting elders, conviction. What kind of person is this? Does it not come to mind that this person might be considerably older? If looking at the mention of respecting elders, this person seems sensitive to the order that is set by age. When looking at the choice of justice as a value, it is likely that this person’s job is related to the law. Justice is certainly an important value. However, in order for justice to operate as a value, the agreement that has been drawn from the members of an organization has to become its standard. If there is a common ground looking at this person’s value words, it will probably be respecting elders. It might be possible that this person is the oldest among the candidates. The belief that justice is decided by age is probably this person’s mindset. What is unfortunate is our society is in an age that does not even know what ethics like respecting elders and Confucian “Samgang Oryun” are. It is difficult for the kind of justice this person wants to be realized. So is it possible to determine who each person is? Candidate A is Lee, MyungBak, Candidate B is Jang, Dong Young, and candidate C leader is Lee, Hwe Chang. Is that how you guessed? What percentage of your guess was incorrect? One person among them has become president and the rest appear in a political column once in a while. It is interesting work to link the value words the three candidates have chosen and their words. And it is possible to check how the values they have chosen in the past are displayed in the future. It is also possible to observe their life trajectory and at what points the values they have expressed matched and at what points they didn’t. It is likely that the person whose behavior showed the best match is

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reigning as a relatively respected leader and the candidates who are not probably lost the interest of the public. It is as if the product which is introduced in the spotlight for a moment, is quickly forgotten.

Koreans’ values are ambivalent Spending is an action I commit to by using all available resources to let people know that I am a person that is valuable and important. Usually, when we talk of value, everyone tries to convert it into money. But in our lives there are moments where that something is more important than money. This is value other than money. The key point to consumer psychology is knowing exactly what the values other than money are and how they appear in the actions or judgments of the consumer. Money is a thing that changes in value according to how it is used. The tens of thousands of dollars donated as scholarship money can be much more valuable than the hundreds of thousands of dollars sitting in the vault. Likewise, when we know that there are a variety of values that make life abundant and meaningful, we know how diverse and plentiful is the life we can live with money. And we are able to find a way to live happily. What kind of significance does value have in our daily life or consumer behavior? I was curious as to what that answer was, so I studied it with the Yonsei University students who were in my consumer psychology class a few years ago. In VALS, created by America’s Stanford Business Institute, if the innovative and survival types appeared as the symbolic values and lifestyles that represent America, then among the items that represent Korean people’s values, the desire to become someone wonderful and the tendency to want to live life as someone who satisfies desires became most clear (Table E.4). In the case of America, it is the majority’s value to pursue innovation. The value that the minority pursues is survival. However, Koreans’ values were wonderful person and desire satisfaction, and the majority of people seemed to pursue both of these at the same time. Seeming wonderful or great is satisfied by specifically realizing each TABLE E.4 Korean identities: Cool guy and Nobody

Cool guy The image that they want to show

Nobody The identity of desire satisfaction

• • • • • • • • •

• I am dark and depressed • I have no interest in arts • It is very hard to stay in one place for a long time • I prefer simple and repetitive tasks • I am a passive person • I can’t impress others • I am rude occasionally • I can’t accept new things • I am irritable and am distracted easily

It is great that I am willing to help others I am reliable I am impressed easily by simple favor or gift I am lazy occasionally I complete my task responsibly I can catch the point that others couldn’t I am kind to most people I like to talk with others I can easily read and sympathize with others’ emotions

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person’s various desires in reality. Usually, they want to be seen as wonderful people, while at heart they try to realize their desires if possible. This is the Korean psychology that could be determined from the values that Koreans express. The characteristic of the values that Koreans pursue lies in the fact that, above all, there is a difference between what is shown on the outside and what is trying to be satisfied on the inside. In other words, what needs to be shown on the outside is different from what the heart wants on the inside. It is the dilemma of desire. In this case, even if one is able to satisfy one’s desire one is not satisfied. Even if one’s desire becomes satisfied, one denies that it was what one really wanted. So they first experience contradiction internally before anything else. They do that even if no one made them do it. Thanks to that they show a very ambivalent side in the process of pursuing what they believe is important in reality. They feel dissatisfied in their state even if they have achieved what they want. This is the reason why Koreans continue to cry out about life’s difficulties and feel that they are unhappy despite the fact that they enjoy relative economic abundance after escaping a state of extreme poverty.

Korean life values and lifestyles In order to understand the life values that Koreans show it is necessary to first understand what standard the lifestyle and the values previously mentioned in VALS is categorized by. This is because Koreans’ values and lifestyle are expressed in a similar way to the concept structure of VALS. America’s values, which are differentiated by the innovative type and the survival type, divide people by those who have passion and those who do not. However, in the case of the Koreans, at least when it comes to values, the majority and minority all have a clear passion for life. This means that they have a clear desire for wanting to show others and wanting to achieve for themselves. However, in the case of Korean values, the two dimensions are not united. Rather, they are a chaotic mix of what one wants to display to others and what one truly desires at heart. It means the majority and minority appear together in one person’s life rather than showing through different groups. It is expressed as a person’s inside and outside not correspnding. In contrast with the US, in Korea an individual cannot be distinguished as a majority or minority. Korean values are not something that clearly reveals one’s life but are the result of considering how oneself will seem to others. Thus, a Korean individual can be revealed by how different one’s superficial appearance is from what one truly pursues at heart. Many Koreans desire to seem like a great person who has achieved all his or her desires, but they are faced with the paradox of not knowing clearly what those desires are. Hence, the majority of Korean society lives in pursuit of ambivalent, two-fold values. Of course, the ambivalent value expression does not only apply to Koreans. A similar tendency appears in Japanese psychology as well. It is honne and tatemae, the difference between inner feelings and public behavior. The discussion of the mind’s ambivalence that is different on the outside than it is on the inside naturally

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appears in the context of Eastern culture, where relationships are important and an individual has to fulfill a role under the pressure of the larger group. It could be an individual’s psychological mechanism in order to easily adjust to the reality if seen from the aspect of how an individual forms and maintains their identity. In this situation, if someone insists that one’s outside appearance and one’s heart should be the same then that is only an obvious convention or a duty that follows the rules of enlightenment. It is at the level of Eastern saints insisting on one’s knowledge and conduct becoming one, but in their daily lives that idea just becomes a duty. Therefore, it is not simple to distinguish whether value in Eastern culture is simply a matter of duty, or whether it means an individual’s normal psychological and behavioral state.When Koreans say they want to show others as being great, that appearance can be divided into petit bourgeois, eom-chin-ah (an abbreviation of “my mother’s friend’s son,” a buzzword from around 2010, the implication being “why can’t you be more like him?”), and the nerdy guy. The petite bourgeois seeks recognition from others and voluntarily follows authority. Their basic mode is adapting to reality. Not only are they faithful to their lives, but they try to live peacefully, harmoniously, and happily with the people around them. Eom-chin-a shows the elegant, sophisticated, and successful life. The nerdy guys do diligently what they are ordered to do. As revealed in the study of Korean values, the values that reveal people best are different from the values that they consider most important. Everyone is playing the duet of values. Maybe it is possible that what one wants to show and the desire one pursues at heart becomes united under the name of I. It is like the protagonist in Oscar Wilde’s novel The Picture of Dorian Gray (Figure E.4). The combination appears in two different forms. Each form appears as a link that connects the ambivalence of the difference between the outside and the inside. If someone shows the appearance of being a petite bourgeois to others, then how that person wants to be seen at heart is as well-off. He wants to be seen as an eomchin-a, but the life he pursues at heart is an unconditional and ascetic life, like a monk. In the heart of people who want to be seen as model citizens, there lurks a fanatic mind that blindly follows a particular ideology, group norm, or religious

FIGURE E.4

The Picture of Dorian Gray by Oscar Wilde

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belief. What are the attributes and properties of the lives of people who have this mixture of ambivalent values and how are these properties expressed in what specific values in other people’s lives? In order to know specifically what kind of values a person has, we will have to utilize a 100 percent of the knowledge and experience we have on humans.

What kinds of values do the cool people in Korea pursue? Values directly reflect the lifestyle of the person living in Korean society.“How should I live and what should I live for?” is an indicator of what that person considers most important, because values define what one aims toward and what kind of life one desires. Let’s say someone says her values are peace, wisdom, faith, gratitude, and sincerity. That person will definitely emphasize being considerate and honest as well. It could be someone we can easily find around us, such as a neighbor who lives simply and diligently, or a friend.These are people who embrace their lives with gratitude and who think of their neighbors. People like our neighbors, who we encounter often and who are nice and kind, we usually call petite bourgeois. Then what do these people who want to show themselves as petite bourgeois really think deep inside? There are people who say that power, authority, competition, innovation and perfection are most important to them and also best describe themselves. They themselves claim to be petite bourgeois. However, the more they claim to be petite bourgeois, the more likely it is that they are not. The former mayor of Seoul, Oh Se Hoon, who noted that he had more than US$6 million in his property registration for public officials, once wrote that he sympathizes with college students protesting for half-priced tuition, saying that he almost broke his back paying for the tuition of his two daughters. Did he really? This example shows the mistake of a person who is very successful in Korean society who absurdly presented his values as a petit bourgeois. Korean society is a society that best shows how a person who wants to satisfy the desire of being seen as well-off at heart has to seem a humble person on the outside. The second group that has the clearest clash of values is the type that appears as an eom-chin-a on the outside but struggles on the inside to satisfy the desire to live a moderate and devoted life like a monk. Here there is a need to understand the word monk.There is no need to understand this in a religious sense.This is because the term refers to people who suppress their present desires with an ascetic mindset preparing for the state examination or public servant examination for a stable future. These people try to gain the values of economic stability, success, improvement (growth), and a positive attitude by sacrificing today and while imagining the enjoyable life that will come sometime in the future. And they want to show this side of themselves armed with these kinds of values and virtues to others while they anticipate spirituality, loyalty, faith, purity, and mercy in their hearts. When determining Koreans’ lives through values, the groups that are most devoted to reality are the nerdy guys and the blind pursuers. The core values they display on the outside are passion, effort, sincerity, confidence, and responsibility but the

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values in their hearts are divinity, simple life, faith, appearance, and authority. In Korean society, the faith that these people blindly pursue is not religious. Rather, they blindly pursue values like money that can definitely be gained rather than stability or recognition. Of course, while maintaining the appearance of a nerd as much as is possible. The nerd is the image of a wholesome young person like who appears in the energy drink commercials. But the young person’s individual life is not revealed there. It is not clear what she lives for, what she aims toward, and what her thoughts and perspectives are. It only shows a life like the parts of a machine. She is only shown as a cool young person without knowing who she is or what her name is—these things don’t even seem to matter. What kind of life do you live? Which mindset do you live with: petite bourgeois, eom-chin-a, well-off monk, the blind pursuer …?

Be myself, be yourself! Our lives are the item that we should spend the most on, as if it were a product out in the market. When we shop, if there is something that catches our eye, we first study it well then we decide whether to purchase it or not. We pay a fair price for the item itself and purchase it. Just as we made conjectures on the future political activities of the presidential candidates by the five value words they chose, we are likely to pay various costs in life to meet the values by which we measure it. All Koreans want to earn a lot of money. They want to live a decent successful life. However, they do not know what the actual cost of their lives is and how much value their lives have. Every time they are faced with an important decision, they request help saying, “What should I do?” In this situation most people would say, “Do what you want to.” If calculated in terms of money, it is a word of advice that is worth about ten cents. It is certainly great advice. However, to the person receiving the advice it is not welcome nor are they grateful for it. Let’s say you toss ten cents to a beggar on the street. Even though ten cents is still money, even the beggar makes light of it saying, “What can I do with ten cents?” From the perspective of the person trying to make a decision, the problem lies in not knowing what they actually want to do. Telling someone to do what they want, when they don’t know what they want, is not valuable. And there is another concern. When some young person tries to blindly do what he or she wants the question they hear most is, “Why are you doing that?” If the person who receives this question answers it by saying, “Just because it’s fun,” then this kind of reply will come flying back, “How are you going to get along by doing something like that? You can’t live by doing what you want.” Then what should be done? It is a very minor example, but this is what occurs in Korean society and is a reflection of our lives in Korea. When faced with this kind of dilemma, most people ultimately select a stable life. Half of them do what they want and the other half do what they do not want to. It is not that different

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from buying an imitation product because one cannot afford what one really wants. Thus, there is no way the shopping of life is enjoyable and it is hard to have much attachment to the life one selected. Spending shows the life I want to live, whilst also showing the life that follows what others say I should live. People often give the advice to become free from other people’s glances to become happy, to make your own joy, to embrace the fact that everyone is different, to listen to your heart and express it actively, to be consistent, and to boldly pursue happiness. Let’s say you received this kind of advice. Could you really live like that? If someone around you lived a life like that, what would you think looking at this person? If you observe that that person has become completely armed by individualistic values and that she is also pursuing them in real life, then you have properly understood. It is the secret of happiness often chosen by people who consider individualism more important than collectivism and who are willing to pay any price for an individual life. From what perspective will you pay what cost for life’s happiness? The issue of consumption gives an answer to this question. Consumption allows one to know exactly what kind of life the consumer is living and what kind of life the people around the consumer are living. Let’s express the Korean people’s life identities in terms of values based on everything discussed so far. It could probably be said in a sentence, to be seen as a great and decent person to people around me while also being seen as an inherently superior person. What does it look like to live as a great and decent person? The life that Koreans picture as great and decent is economic abundance and having everything materially and spiritually that is needed and a family-centered life. But this kind of person speaks more of appropriateness than their own thoughts. These people also believe that one has to work hard on self-improvement and building relationships to achieve a life like this. It could be the life that most people aim towards.When one thinks one is superior to others or when one wants to make a display of one’s wealth or power, consumption becomes the easiest means that one can choose. The Swiss author Alain de Botton calls this kind of life philistinism. In the life Korean people currently pursue, philistinism appears very distinctly. I’m not disparaging it as something bad. It is only that we have to face this as how we really live. When we admit this reality we are able to understand ourselves in new ways and discern our lives. Living a superficial life and claiming not to is like wanting to gain recognition through prestige products but putting forth only the history or culture of prestige products while hiding one’s inner thoughts. It is the same with studying consumer psychology and marketing strategy.There is no need for books that say the events that happened in America will occur the same way in Korea. There are probably interesting stories and good examples in those books. However, those books do not deal with Korean consumer behavior and the life that people in Korean society want to show or live. In order to understand the 50 million people living in Korea and to determine their consumer psychology, it is necessary to know what their minds are like. No, you have to

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know what kind of behavior is believed to be allowed and what kind of beliefs we have about ourselves. Knowing exactly our way of life and values, and what we believe about the various behaviors that reveal ourselves, is the most accurate study of consumer psychology.

Note 1

http://en.wikipedia.org/wiki/Benjamin_Franklin

INDEX

4Ps 40–1 apartment xvii, xix–xx appetite 27, 29 attention clues 71–2, 74–6 audio recorder 33 beauty xviii Big 42–3 Binet, A. 7–8 brand xxii, 22, 135 brand cognition model 135 business 12–13 capital 23 capitalist society xxvi, 117, 126, 178, 183 categorizing 35, 92 celebrities xi–xii, 10–11, 155 Charcot, J. 3–4 chasm 131, 145 cluster analysis 46–8 communication fees 94–5, 97 Company man 124, 127 competion 29, 49, 50 consumer behavior xiv–xviii, 12–18, 33, 45; World War II 8, 12 consumer habit see consumer behavior consumer psych xii, xv, xxiii, 26–7, 33–4 consumer segmentation 31, 33 consumer sentiment see brand cognition model consumption xii, xxiii, xxv, 12, 15, 194 contradiction 195 conveyor belt 26

corporate 13, 121 culture xix, xxiii, 156, 175, 196 creativity 125 crowd xvi decision-making 12–13 deduction 19 demographic 31, 45–6 Descartes, R. 20 desire xxiii, 195 Dichter, E. 8, 10–11 digital consumer 136–8 diversity 62–3, 122 e-commerce 146 envy xvi experimental study 67–8 external factors 13–15 factor analysis 75–6 Ford, H. 27 Franklin, B. 188–9 Freud, S. 4–6, 8, 10 game 148–9 George Soros 119 happy 183 Holmes, S. 19–20 ideal 56 imitation product 162 impulse buying xxii impressionist 113–14

202

Index

individual see individuality individuality 17, 20, 170, 173–5, 180 internal factors 13–15 Jacoby, J. 12 James, W. 9 Korean xxiii, 10, 13, 22–3, 35, 56, 58–60, 120–1, 142–3, 178; ambivalence 195–6; communication 184; consumer market has changed 153; Loser 155; university 178 Kahneman, D. 38–9, 63 Let’s be a mother 37 libido 10 life 190 life share 49, 50 lifestyles 34–5 loss aversion tendency 38 luxury xvi, 23; Avatar 172; foreign brand 153–4; royalty 150; individuality and the self see self; shopaholic 155; spiritual luxury 163;Veblen Effect 158 mainstream 115–17, 119–20; Lee, Myung–Bak 115–16 market segmentation see consumer segmentation market share 49–50 marketing 17, 29–30, 188; IPTV 131; marketing mix 13–14, 32–3 Mind MRI 70–3, 76–7; research process 74–6 money 117–18 Moskowitz, H. 51–6, 61–3, 69–70, 175; rule-developing experiment 69 no-pants fashion trend 21 non-mainstream 117, 119–20, 123, 144; Neo-renaissance man 125–6; Roh, Moo-Hyun 115–16, 122 option 30 others xvii, 56, 119 paradigm shift 61, 114–15 philistinism 199

phone bill see communication fees portal 146 positioning see targeting psychography 34–5 psychology code 185 prestige product 158, 173–5 pride xv product concept 29 promotion see marketing psychoanalysis 8 public service 108 Q methodology 74–6 qualitative research method 67 question 67 ramen: KoKoMyun 57–9; Shin Ramen Black 59–60 reality 38 recognition 165 Rogers, E. 131 Samsung 121 self 9, 175 selling concept 29 shopping 20 smartphone 133–4 socio-demographic 73–4, 136 special 30 spending see consumption sportstainment strategy 83 target group 48 targeting 31–2 The Hudsucker Proxy 39–40, 68 The Principles of Psychology 9 trend 21, 29, 35, 59–60, 117, 119; Korea 120–3 values 35, 189–91, 194–6; presidential candidates 192 Values, Attitudes and Life Styles (VALS) see values World War I 27 Wundt, W. 6 Zeno’s paradox xxiii