Modern Australian

how we value the fruits of our labour over instant gratification

  • Written by Gary Mortimer, Associate Professor in Marketing and Consumer Behaviour, Queensland University of Technology

There are some anecdotes just so good that almost every story about a particular economic principle begins the same. So too this article begins with cake mix.

In the 1950, the story goes, US food company General Mills wanted ideas on how to sell more of its Betty Crocker brand of instant cake mixes. It put psychologist Ernest Dichter – the “father of motivational research” – on the case.

Dichter ran focus groups. Change the recipe, he then advised the company. Replace powdered eggs in the cake mix with the requirement to add fresh eggs. All-instant cake mix makes baking too easy. It undervalues the labour and skill of the cake maker. Give the baker more ownership in the final result.

And the rest is history.

Add eggs! Betty Crocker cake mix advertisement.

It’s likely this story is extremely overegged. Inconvenient facts include another company, Duncan Hines having a cake mix recipe using fresh eggs (developed by food chemist Arlee Andre) as early as 1951. And in 1935, the company P. Duff and Sons was granted a patent for a cake mix using fresh eggs.

how we value the fruits of our labour over instant gratification The P. Duff and Sons in 1935 patent. US Patent and Trademark Office

“The housewife and the purchasing public in general seem to prefer fresh eggs,” the patent reads, “and hence the use of dried or powdered eggs is somewhat of a handicap from a psychological standpoint.”

Even the book sometimes credited as the source of the Dichter anecdote, Something from the Oven: Reinventing Dinner in 1950s America, by Laura Shapiro, says that “if adding eggs persuaded some women to overcome their aversion to cake mixes, it was at least partly because fresh eggs made for better cakes”.

Nonetheless it is the story of Dichter making a profound psychological insight into consumer behaviour that has passed into legend.

Almost seven decades later, the idea of making things more laborious to get consumers to value them more is an established marketing tactic.

We now know it as the “IKEA effect”.

Testing the IKEA effect

The IKEA effect – “that labour alone can be sufficient to induce greater liking for the fruits of one’s labour” – was named in a 2011 paper in the Journal of Consumer Psychology by Michael Norton, Daniel Mochon and Dan Ariely. They chose the name because products from the Swedish manufacturer typically require some assembly.

Read more: The Ikea effect: how Ingvar Kamprad's company changed the way we shop

Their paper also begins with the cake-mix story. It concedes there might have been other reasons General Mills increased its sales – an alternate view is that the icing on the cake was, in fact, the icing on the cake – but the authors were still enthused by the idea that “infusing the task with labour” was a crucial ingredient.

To empirically confirm this phenomenon, and its limits, they conducted experiments that involved assembling IKEA boxes, folding origami and building with Lego. The results showed participants valued items they assembled themselves more than items assembled by someone else.

The following graph shows the results from one of the experiments, in which participants were asked to fold origami cranes or frogs and then bid to buy the creations. The bidding phase also included origami made by expert folders. They tended to see their own creations as much more valuable than those made by other participants, and almost equal in value to the expert origami.

how we value the fruits of our labour over instant gratification Results show participants’ willingness to pay (WTP) for origami frogs and cranes made by themselves or others. Participants saw their amateurish creations as similar in value to experts’ creations, Harvard Business School, CC BY

The experiments also showed the effect had limits.

When participants spent too much time building or deconstructing their creations, or failed to complete the task, their willingness to pay for the item declined.

The following graph shows the results of the experiment in which some participants built an IKEA box, while others were allowed to complete only half the steps required to build the box.

how we value the fruits of our labour over instant gratification Results shows participants’ willingness to pay (WTP) for assembled IKEA boxes. Those who built their boxes bid more for their creations than did incomplete builders. Harvard Business School, CC BY

Those who got to complete their box valued it much more, shown by their willingness to pay to keep it. “Most importantly,” the paper notes, “this increase in valuation was not limited to only participants who considered themselves DIYers.”

Related, but different, concepts

The IKEA effect is connected to, but not quite the same as, a number of other important economic behaviours.

First, there is the endowment effect, in which simply owning a product increases its perceived value. Though this effect has long been recognised, it was formally named by economist Richard Thaler in a 1980 paper. Since then many studies have demonstrated that individuals usually want more money to give up something they own than they are willing to pay to acquire a similar item from someone else.

Second is the psychological idea of effort justification. This goes back to studies in the 1950s. The idea is that an individual who makes a sacrifice to achieve a goal rationalises the effort by attributing greater value to the achievement. In one celebrated study, for example, women made to undergo an embarrassing initiative to join a social group subsequently rated membership of that group higher than those who did not.

Third is personal preference, which is expressed in consumers being attached to particular brands. Being involved in the creative process might be regarded as an extension of this attachment to individual tastes, something companies seek to leverage through customisation options.

Read more: The paradox of choice. Why made-to-order might not solve the fashion industry's problems

In their experiments Norton, Mochon and Ariely were very careful to control for these effects. For example, none of the items they had participants assemble entailed customisation.

Their findings have been supported by subsequent studies that disentangle ownership and personal preference from valuing the fruits of one’s labour.

Having customers do most of the work, feel great about it, and at the same time perceive they have attained “greater value for money’” is the Holy Grail for marketers.

Even if the Dichter cake-mix story is more legend than history, food and grocery brands are using the IKEA effect to attract new “value-seeking” customers.

Consider the “ready-to-create” meal kit – prepackaged raw ingredients you prepare and cook yourself. These meals seek to balance the desire for convenience with concerns about about healthy eating and the pleasure of cooking.

how we value the fruits of our labour over instant gratification A typical meal kit. Blue Apron

Brands getting in on the action include YouFoodz (known for its convenient “ready-made” meals) launching “ready-to-create” options, and Pataks (known for its “pre-made” curries in a jar) offering “curry kits”.

Market research company Nielsen estimates more than one million Australian households will buy meal kits by the end of 2019.

While many retailers focus their efforts on speedy deliveries and ready-made, convenient solutions, the IKEA effect suggests the secret to success may be to make things a little more challenging.

Authors: Gary Mortimer, Associate Professor in Marketing and Consumer Behaviour, Queensland University of Technology

Read more http://theconversation.com/the-ikea-effect-how-we-value-the-fruits-of-our-labour-over-instant-gratification-113647

NEWS

As the dust of the election settles, Australia's wildlife still needs a pathway for recovery

The Darling River near Louth NSW, April 2019, in the midst of a drought compounded by upstream irrigation policies.Jaana Dielenberg, Author providedThe environment was a keyconcern in the recent federal...

The long and complicated history of Aboriginal involvement in football

Over the next two weekends, the Australian Football League celebrates the contribution of Indigenous peoples to the history of the game. At the same time, a new documentary will show...

Curious Kids: why are there waves?

Nina Maile Gordon/The Conversation, CC BY-NC-NDCurious Kids is a series for children. If you have a question you’d like an expert to answer, send it to curiouskids@theconversation.edu.au You might also...

Why Sydney residents use 30% more water per day than Melburnians

Melbourne's water supplies are running low after years of drought.shutterstockThis week Melbourne’s water storage dropped below 50%, a sign of the prolonged and deepening drought gripping eastern Australia. Sydney is...

Friday essay: YouTube apologies and reality TV revelations

A little over a year ago, former Australian cricket captain Steve Smith made a tearful confession and apology to the public, having been banned from cricket for 12 months for...

six ingredients of successful public policy

Australia’s national policy response to HIV/AIDS has been lauded as one of the best in the world.ShutterstockIn the lead up to the recent federal election, there was plenty of negative...

Population DNA testing for disease risk is coming. Here are five things to know

Screening millions of healthy people for their risk of disease can be cost-effective. But it raises ethical and regulatory concerns.from www.shutterstock.comDNA testing to predict disease risk has the potential to...

How the dangerous evolution of Pakistan’s national security state threatens domestic stability

Protests followed the terrorist attack that killed more than 40 Indian military personnel in the disputed state of Jammu and Kashmir. AAP/Jaipal Singh, CC BY-NDIn February, a terrorist attack by...

the tall buildings of Australia show why we need strong design guidelines

Towering canyons of concrete and glass are an increasingly dominant feature of fast-growing cities like Melbourne.ymgerman/ShutterstockPrivate enterprise has shaped the skylines of Australia’s cities, and the names of their highest...

If you think less immigration will solve Australia's problems, you're wrong; but neither will more

More by luck than design, recent recent levels of immigration seem to be in a 'goldilocks zone' that balances economic, social and environmental objectives.www.shutterstock.comAre we letting too many or too...

Let them play! Kids need freedom from play restrictions to develop

Playing in nature improves children's learning, social and emotional skills.MI PHAM/unsplashYou may have heard of play. It’s that thing children do – the diverse range of unstructured, spontaneous activities and...

Gamers use machine learning to navigate complex video games – but it's not free

Playing Dota 2? You can do better with a little help from machine learning.Shutterstock/hkhtt hj Some of the world’s most popular video games track your activity as you play –...

Popular articles from Modern Australian

EXYRA eyewearShould you get a hair transplant in Turkey if your hair is grey?Do You Need a Tummy Tuck or Just Liposuction?Best 4 Sassicaia Wine with Soothing Taste and AromaMarvelous Makeover - 5 Tips to Revitalize Your Look This SummerWhat to Expect When Recovering from Gynecomastia SurgeryClickClack Pantry Range | Helping Australians save time & moneyThe Gentleman’s Guide to Wearing Custom TiesGynecomastia – Understanding the Facts and Treatment OptionsIs Coffee Good for you10 Foods Which Reduce Blood Sugar Levels4 Unexpected Reasons Why You Could Be Losing Your HairWhat to Do When Traveling From Australia to USAWhat we should know about ‘nitric oxide’ and why we need more of itDownsizing: What Is Too Small?