Nav: Home

How creating an "empathy lens" makes P2P marketing communications more effective

August 01, 2020

Researchers from The Ohio State University published a new paper in the Journal of Marketing that examines whether to focus sharing economy marketing communications on the platform or on the provider.

The study, forthcoming in the the Journal of Marketing, is titled "Providers vs. Platforms: Marketing Communications in the Sharing Economy" and is authored by John Costello and Rebecca Walker Reczek.

Over the past decade, a growing number of firms have found success using a peer-to-peer (P2P) business model (e.g., Uber, Lyft, Airbnb, and TaskRabbit). P2P brands are expected to drive much of the sharing economy's future growth, with experts projecting a market size of $335 billion by 2025 for the overall sharing economy, up from $14 billion in 2014. Marketing communications represent the company's "voice" to consumers and offer a key way to shift consumers' purchase perceptions and behaviors. Although P2P brands face many important decisions about their marketing communications, a new study in the Journal of Marketing explores one specific, but consequential, decision for P2P marketers: whether to focus on the platform or on the provider in marketing communications. Both strategies are used among P2P brands in the marketplace, but existing research offers no insight into whether platform- or provider-focused communications are more effective and why.

Consumers interact with two distinct entities in a P2P purchase. The first is the platform, typically a for-profit firm that acts as an intermediary for exchange between consumers and providers of goods and services. The second is a peer provider, an individual who offers a good or service and connects with the consumer through the platform. We find the P2P model leads consumers to perceive high provider-firm independence where providers are viewed as relatively independent from the platform(s) on which they offer goods/services. Given the perceived independence of the provider and firm for P2P firms, P2P marketing managers may choose to focus on either entity in their marketing communications.

Through experiments and a field study conducted in collaboration with a real P2P company, the research team demonstrates that when P2P brands use provider-focused marketing communications versus platform-focused marketing communications, consumers perceive a purchase as helping an individual provider to a greater extent. This mental shift increases consumers' likelihood of purchase and app download as well as willingness to pay (WTP). Costello explains that "This is because provider-focused marketing communications in this context lead consumers to think about their purchase from the provider's perspective. We call this tendency an empathy lens, which is being aware of another person's internal state or putting oneself in the place of another. We also show that our effects do not extend to traditional firms because consumers do not view these purchases through an empathy lens."

These findings have practical implications for marketing managers of P2P brands, public policymakers, and consumers. From a managerial perspective, they identify the importance of provider-focused marketing communications as a way to drive important brand outcomes and should be particularly helpful for marketers at start-up P2P brands. These new brands face increased spending from established P2P brands and a relatively high failure rate, thus making informed decisions about marketing communications particularly important.

The research also suggests that there may be an opportunity for policymakers to educate consumers about how their perceptions about P2P purchases may be influenced by firm actions like marketing communications, and thus may not match economic reality. Reczek says that "Our studies show that consumers often view purchases from for-profit P2Ps as helping an individual provider. However, this perception could have negative consequences for providers. For example, if consumers already believe they are helping through their purchases, they may be less willing to support regulations that help protect these individuals financially or may be less willing to provide other support such as tipping." This point is particularly timely as experts recently reported that the threat of COVID-19 has dramatically decreased the usage of popular peer-to-peer (P2P) brands like Uber and Lyft, leaving many P2P providers in a difficult financial position. While some P2P brands are pivoting to services like food delivery to keep drivers active, consumers should remember that perceptions of helping do not always match reality.
-end-
Full article and author contact information available at: https://doi.org/10.1177/0022242920925038

About the Journal of Marketing

The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the American Marketing Association since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Christine Moorman (T. Austin Finch, Sr. Professor of Business Administration at the Fuqua School of Business, Duke University) serves as the current Editor in Chief.

https://www.ama.org/jm

About the American Marketing Association (AMA)

As the largest chapter-based marketing association in the world, the AMA is trusted by marketing and sales professionals to help them discover what's coming next in the industry. The AMA has a community of local chapters in more than 70 cities and 350 college campuses throughout North America. The AMA is home to award-winning content, PCM® professional certification, premiere academic journals, and industry-leading training events and conferences.

https://www.ama.org/

American Marketing Association

Related Consumers Articles:

Is less more? How consumers view sustainability claims
Communicating a product's reduced negative attribute might have unintended consequences if consumers approach it with the wrong mindset.
In the sharing economy, consumers see themselves as helpers
Whether you use a taxi or a rideshare app like Uber, you're still going to get a driver who will take you to your destination.
Helping consumers in a crisis
A new study shows that the central bank tool known as quantitative easing helped consumers substantially during the last big economic downturn -- a finding with clear relevance for today's pandemic-hit economy.
'Locally grown' broccoli looks, tastes better to consumers
In tests, consumers in upstate New York were willing to pay more for broccoli grown in New York when they knew where it came from, Cornell University researchers found.
Should patients be considered consumers?
No, and doing so can undermine efforts to promote patient-centered health care, write three Hastings Center scholars in the March issue of Health Affairs.
Consumers choose smartphones mostly because of their appearance
The more attractive the image and design of the telephone, the stronger the emotional relationship that consumers are going to have with the product, which is a clear influence on their purchasing decision.
When consumers don't want to talk about what they bought
One of the joys of shopping for many people is the opportunity to brag about their purchases to friends and others.
As consumers, how do we decide what's 'best' when it's not clear?
Imagine you are choosing between two resorts for your island vacation.
Effects of ethnocentrism on consumers
Aitor Calvo-Turrientes, winner of the prize for End-of-Degree Project in Sustainability in 2015 awarded by the Faculty of Economics and Business of the UPV/EHU-University of the Basque Country in Vitoria-Gasteiz, is the author of the paper 'The valuation and purchase of food products that combine local, regional and traditional features: The influence of consumer ethnocentrism,' published recently by the prestigious journal Food Quality and Preference.
Organic consumers mean business
Groundbreaking research from Aarhus BSS shows that organic consumers are standing fast and are buying more and more organic products following an increasingly predictable pattern.
More Consumers News and Consumers Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Debbie Millman: Designing Our Lives
From prehistoric cave art to today's social media feeds, to design is to be human. This hour, designer Debbie Millman guides us through a world made and remade–and helps us design our own paths.
Now Playing: Science for the People

#574 State of the Heart
This week we focus on heart disease, heart failure, what blood pressure is and why it's bad when it's high. Host Rachelle Saunders talks with physician, clinical researcher, and writer Haider Warraich about his book "State of the Heart: Exploring the History, Science, and Future of Cardiac Disease" and the ails of our hearts.
Now Playing: Radiolab

Insomnia Line
Coronasomnia is a not-so-surprising side-effect of the global pandemic. More and more of us are having trouble falling asleep. We wanted to find a way to get inside that nighttime world, to see why people are awake and what they are thinking about. So what'd Radiolab decide to do?  Open up the phone lines and talk to you. We created an insomnia hotline and on this week's experimental episode, we stayed up all night, taking hundreds of calls, spilling secrets, and at long last, watching the sunrise peek through.   This episode was produced by Lulu Miller with Rachael Cusick, Tracie Hunte, Tobin Low, Sarah Qari, Molly Webster, Pat Walters, Shima Oliaee, and Jonny Moens. Want more Radiolab in your life? Sign up for our newsletter! We share our latest favorites: articles, tv shows, funny Youtube videos, chocolate chip cookie recipes, and more. Support Radiolab by becoming a member today at Radiolab.org/donate.