CULTURED MINDS

REGULATORY FOCUS

 

The effects of using a certain regulatory focus (see appendix) appear constant regardless of whether researchers measure culturally nurtured tendencies or prime a specific regulatory focus in their subjects e.g by asking them to complete a pronoun circling task (Agrawal & Maheswaran, 2005; Chen et al., 2005) Individuals are more persuaded by information that is compatible with their regulatory focus; they also remember it better (Aaker & Lee, 2001).   

 

 

Enhancing Perceived Value

(Higgins, 2002) asserts that tailoring products and product messages to suit individuals’ regulatory focus actually enhances perceived value of the product. The paper make an interesting point about different (and often overlooked) ways that consumers can derive value from products. ‘Outcome value’, the utility gained from consuming/owning a product, is only one of three main avenues from which consumers derive value from goods. Value can also be derived from ‘fit’: how well the goal suits one’s promotion/prevention focus. There is also ‘value from proper means’ when the means of goal pursuit are in agreement with rules/norms.

 

 

Mental Accounting

Regulatory focus can have strong effects in the domain of financial decisions (which is important since consumption cannot take place unless consumers adequately manage their wealth). As an accounting shortcut, most people use ‘mental accounts’ (Thaler, 1985; 1999) which are non-fungible (money from one account cannot easily be transferred into the other) e.g money from the ‘rent-payment’ account is not easily moved into the ‘food-bill’ account. Following from this, (Zhou & Pham, 2004) propose that for financial decisions consumers use 2 broad mental accounts: a promotion focused one and a prevention focused one. They associate different types of decisions and financial products with each account; for example, retirement might be placed in the prevention-focused account whereas yearly bonuses fall into the promotion-focused account. Levels of risk-taking and loss-aversion vary according to which mental account the money/product/decision is associated with. Merely evaluating different financial products was enough to activate distinct promotion/prevention orientations and doing so directed investors’ decisions toward financial products that were consistent with the activated orientations.