Eric D. DeRosia and Ryan S. Elder (2019), “Harmful Effects of Mental Imagery and Customer Orientation During New Product Screening,” Journal of Marketing Research, 56 (4), 637–651.
ARTICLE:
Journal of Marketing Research
SUPPLEMENTAL MATERIALS:
Journal of Marketing Research
EXTENDED ABSTRACT:
Managers who are evaluating an idea for a new product to launch need a clear-eyed and neutral assessment of the likelihood the product will succeed. Too often, managers are unrealistically optimistic about new product ideas, and they develop products that should have been rejected early on. In this research, we discover a problem that contributes to this unrealistic optimism, and we demonstrate how managers can avoid it.
Whether due to their intuition or training, managers often assess new product ideas by asking themselves questions such as “Would this product meet a customer need?” Of course, considering such questions makes perfect sense: one of the core tenets of marketing is that managers should try to satisfy the wants/needs of customers, and a product that would not satisfy any important customer need is likely to fail.
However, in our studies we find that when managers deliberate such questions, they experience a cognitive bias that makes them unrealistically optimistic about the new product idea. More specifically, our findings indicate that when managers attempt to anticipate how consumers would respond to a product, many managers spontaneously engage in “visual mental imagery” of customers interacting with the product. This visual mental imagery is known by a variety of names, such as visualization, imagination, and mental simulation. A variety of psychology studies have shown that when people engage in visual mental imagery about an event occurring, they are more likely to believe the event will actually occur. In our studies, we find that when managers spontaneously engage in visual mental imagery about the targeted customers interacting with the product, the manager’s optimism is increased in a variety of ways. Merely imagining target customers will increase the manager’s expectation for how common those target customers will be in the general population. Imagining how target customers would respond when encountering the product in the marketplace (e.g., on a retail shelf) will increase the manager’s expectation for how commonly such encounters will occur. Imagining customers using the product will increase the manager’s expectation for how commonly customers will use the product. Optimism will be increased even further if the manager imagines the product will satisfy – even partially – the wants/needs of customers. Because all these influences tend to increase managerial optimism due to artifacts of cognition rather than any objective information about the product, the optimism they generate is unrealistic.
We looked for evidence of this unrealistic optimism by asking experienced managers to evaluate new product ideas for possible further development. Across a variety of studies, we tested eight products ideas, including ideas for strong products and ideas for weak and fundamentally flawed products. We evaluated the manager’s evaluation of the new product ideas in a variety of ways, including their “best case,” “worst case,” and “most likely” sales forecasts, their overall assessments of the product ideas, and their committee votes on whether to promote the idea for further development. The overall conclusion from the studies is that attempting to consider whether a new product idea will satisfy the wants/needs of customers prompts managers to engage in visual mental imagery about customers interacting with the product, which in turn increases the manager’s unrealistic optimism about the new product idea.
Unfortunately, this is a cognitive bias that is not prevented by diligent effort. Indeed, we observed in one study that managers who were more careful and vigilant in evaluating a new product idea were especially vulnerable to the problem. These managers were particularly detailed and systematic in their visual mental imagery about customers, so the cognitive bias intensified, and these managers became particularly optimistic about a new product idea that was fundamentally flawed and should have been abandoned.
These results are a paradox: managers must consider whether a new product would satisfy the needs of customers to prevent poor products from being pursued, but actually performing that consideration creates a cognitive bias that pushes managers toward unrealistic optimism.
Fortunately, knowing the theoretical mechanism that causes the problem allows for the creation of a preventative solution. We find that the unrealistic optimism is eliminated if managers simply avoid visual mental imagery about customers while considering how well the product would satisfy their needs/wants. That is, managers can still consider customers, their needs, and how the product might satisfy them, but managers should perform all those considerations without visual mental simulation. This method reduces unrealistic optimism where other methods (e.g., informing the managers about the bias and asking them to adjust for it) failed to do so. In three studies (1, 2 and 6), we find that this visual mental imagery about customers is under the voluntary control of managers, and their unrealistic optimism is reduced when managers follow the technique. In this way, this research identifies a simple change in managerial approach that can yield more accurate evaluations of ideas for new products that are being considered for development and launch.
– Eric DeRosia