Tuesday, March 2, 2010

Consumer's Reaction to Nostalgia - does it matter?

Before coming back to school I was working in Mexico with a snack manufacturer, mainly with their brand of hot sauce and salsas. In northeast Mexico, where the company is located, this brand has been successful in the market and is a much recognized brand and sells well; much so that in the past 7 years, sales in the rest of the country have grown considerably and is now a nationally known brand. Apart from maintaining growth domestically and gaining competitor market share, the next viable growth step was to start exporting to the United States, and I was involved in this process.


Now, here is where I connect this past work experience with the theme of my class report (although you will notice later that I have already altered my initial intention of the topic). A big reason that my former employer wanted to expand this product to the US is the fact that we could take advantage of the “nostalgia factor” that is involved when selling our brand in the US. I will briefly try and explain myself. The hot sauce selling in Mexico was already an undoubtedly popular product that Mexicans bought regularly. The Company looked to capitalize on the fact that about 814,000 Mexicans immigrate yearly into the US, with a population of about 11.5 million residing there. Most of these immigrants arriving into the US yearn for products that remind them of Mexico and make their transitioning lifestyle more bearable. Mexican immigrants in the US tend to fall back on available Mexican products (specially food and drink) in this transition.

At the time we decided to launch this product as an export to the US it only made financial sense to do so if advertising was cut to a minimum, more specifically, zero. The only way we would do this was based on the fact that we knew that immigrants would respond to the product if the placement of it was effective (Mexican restaurants, supermarkets, specialty stores, word of mouth, etc). And this is exactly what happened, a successful distributor relationship and therefore good initial placement of our product in the Mexican US markets.

So this past experience left me curious to know more about the topic. I initially wanted to concentrate on the subject related specifically to Mexican products in the US, but after doing some research I think what interests me is in general terms: I have. How companies are using this sense of nostalgia to advertise and promote their products.
Have you noticed the current tendencies to fall back on the past: blockbuster movie remakes, reviving of the Mustang, Camaro and MiniCooper cars, come-back tours of popular rock band such as Sting and the Rolling Stones?

A couple of big questions for my research that I would like answered are:
- What is causing this tendency of advertising with nostalgic references?
- What type of companies are employing this methods and is it more successful in certain industry or products?
- Is this method really working?

I think that it is imperative that companies that focus on memories and past experiences to explore with their advertisement have a very thorough understanding of their customer base and insights that might make them attractive to this method. I believe that exploring with personas could make this technique much more successful since the company advertising can have a much clearer idea of what it is that customer segment remembers and values about the past. Doing this right will be much more valuable to the customer and therefore be more of a success for the company.

I plan on learning more on the subject and hopefully expand on it with the help of valuable existing research papers on the topic. This topic is fairly new and I think this time this could work to my favor since I can explore more upon it. I have found resources that start addressing this issue such as:
“The Power of Reflection – An Empirical Examination of Nostalgia Advertising Effects” by Darrel D. Muehling and David E. Sprott
“The Use of Nostalgia in Television Advertising: A Content Analysis” by Lynette S. Unger, Diane M. McConocha, and John A. Faier.

The “The Power of Reflection” article is very helpful since it attempts to empirically validate the effects of nostalgic advertising through an experiment involving 150 undergraduate students. This article also digs in somewhat into the psychological factors that fit in with this type of advertising. My biggest take away from this article is reflected in a sentence from their abstract:

“While the managerial relevance of such an investigation is obvious (i.e., to test the relative efficacy of nostalgic ads), the findings of this study have theoretical significance as well, for they contribute to our growing understanding of how processes and factors related to nostalgia may influence consumer judgments.”

I will also try to address another part of nostalgic selling which is not so close to topics like advertising, but more related to my initial idea that this can be used extensively within a cultural context, mainly in food related products with immigrants across the world.
Salud! R