The "halo effect" - is anyone really that dumb?

[nicolasb]

There is a "point" that is "made" repeatedly in these fora. Consider the following statement:

"I'm going to buy the worst possible product available in my price range because the company that makes that product also produces the best possible product in a completely different price range."

Does anyone ever actually think like that?

It's been stated over and over again that having the performance-leading product in a market supposedly helps the sales of products lower down the price scale by association. But I've always had a great deal of difficulty believing this claim.

It seems to me that if someone is actually sufficiently stupid and/or ignorant to make a purchase on that basis, he is probably so stupid or ignorant that he isn't even aware of who the current performance-leader is: he probably won't even know what the word "benchmark" means, he'll be the kind of person who wanders into PC World and buys a video card because he likes the picture on the box. I can believe people might be stupid enough to buy by brand name alone, but I can't believe there is a sizeable number of people who are stupid enough to buy by GPU brand name but not stupid enough to be unaware of which is "best" brand anyway.

So, I have to ask: where's the evidence that this alleged "halo effect" actually exists?

 

[_xxx_]

Definitely. Just go to the next best computer store, find a nice position near the GFX section and enjoy the show for an hour or so. You'll see many people buying low-end cards from ATI or NV based on the fact that they know about the brand from magazine ads or such. So they'll usually go for the low-end models with much memory (however useless that may be). Salespeople aren't very helpful there either as you may imagine.

 

[tongue_of_colicab]

I dont have any evidence, but I do think some people think like that. Its a sort of marketing afterall. Its like Toyota winning NASCAR (or what is that one important race called?) and the day after they'll be selling a ton of cars because of that while obviously a racing car is something totally different that the pick-up people are buying but as it has Toyota on it they think its good. I think it works that way with other products too especially with the average consumer who doesnt really look into what he is buying.

 

[nicolasb]

Maybe I need to change the subject line of this thread. :smile2:

I can perfectly well believe that people will buy a video card on the basis of (say) adverts in magazines. What I have a problem with is the idea that they will buy on the basis of detailed benchmarks conducted on a completely different product.

Imagine a bloke going into PC World.

Bloke: "I want to buy a video card, please."

Salesman: "How much did you want to spend?"

(Bloke thinks about it and eventually comes up with a "mid-range" price)

Salesman: "Okay, well, at that price level you'd probably be best with either an Nvidia 8600 or a Radeon HD600XT."

Now, at this point I can imagine the conversation might go two ways.

1) Bloke says "Oh, right, which do you recommend?" and then goes with the salesman's suggestion.

2) Bloke makes a note of his options and then goes out and does some research to see which is the best.

Now, I can easily imagine that plenty of people will be in group 1 and plenty of people will be in group 2. That's fine.

But what I am being asked to believe is that vast numbers of people are sufficiently well-informed and sufficiently energetic that they will actually go out and do research, read video card reviews and check out benchmark numbers (i.e. they're in group 2) and yet are also simultaneously stupid enough to buy a product as a result of reading reviews of a completely different product.

That's what I have a problem with. If someone knows enough to know that (say) 8800GTX is better than R600, then surely he must also know enough to realise that 8600 and 2600 are different products? If he is sensible enough to do some research before buying , how can he simultaneously be stupid enough to research a completely different product from the one he's thinking of getting? Surely either he is sensible enough to research the correct product, or he is stupid and lazy enough not to do any research at all?

I just can't believe there's much overlap between people who are knowledgeable enough to read benchmarks and people who are ignorant enough not to realise that mid-range and high-end products are two different things.

 

[3dilettante]

I can perfectly well believe that people will buy a video card on the basis of (say) adverts in magazines. What I have a problem with is the idea that they will buy on the basis of detailed benchmarks conducted on a completely different product.

That pushes the definition of the halo effect you are discussing further from the definition.

The halo effect isn't about detailed analysis of anything.

It's more like a person hears that Manufacturer X got the highest marks in Big Benchmark Y, so the psychological perception of the manufacturer is more positive.

Why do you think 3dMark is so important as a marketing bullet point?

When faced with a purchase decision on otherwise unknown products, that perception carries over.

To find examples of people making purchase decisions on half-remembered second-hand information and first instinct, see "Management".

 

[pelly]

Take a look at some market research numbers and you'll see that this is definitely the way most consumers think..as scary as that is...

Financial analysts put a significant amount of emphasis on the flagship performance crown for this very reason....Historically, you can typically expect the company which fails to capture the high-end performance crown to take a significant hit on their stock due to the overall effect it will have upon the entire product line in the minds of "most" consumers...

A quick (and likely poor) analogy would be "supercars" that are $90k and up...come with insane horsepower, and can do 180mph or more......People read about these cars in magazines (or online) and see that company A's supercar beats company B's offering. They they assume that company A's $40,000 car is better than company B's $40,000 car....when in fact, it could be the exact opposite...

Again, it seems insane to make purchases based on these things to those who do their homework and research in advance...Unfortunately, that is far more effort than most are willing to make...

 

[Bouncing Zabaglione Bros.]

The halo effect is all about using your top-of-the-range product to market your company name. If you produce the best car/clothes/GPU/CPU/etc, then your company name becomes associated with being "the best" in the mind of the potential purchaser.

It may not be the case that their cheaper products are the best in that market segment, but the point is that the halo effect makes you think they might be. It's instant brand recognition, and in some fields (eg fashion), the name itself becomes desirable above and beyond what the product is, because the company has developed such a reputation, that ownership of the brand alone gives kudos amongst your peers or in your mind.

 

[poopypoo]

I hear what you're saying, OP, but you're forgetting the legions of people who get benchmark scores -- but not from even medium-quality review sites like H-OCP, but instead get theirs from crap magazines like MaximumPC. Zines where they benchmark with one game, and no indication of settings used. Magazines that come off as authoritative, when all that's really different about them is the more modern graphic design. And then they get to CompUSmush, and ask for that exact model number, but they don't get that model number -- thanks to MasturbatorPC, they're all sold out! Instead they get whatever the salesman can foist on them. Like the nV part with a crippled membus or yeah, a 10 MHz gpu with 130950932 MB of GDDR3. You have to really stop and think like a mouth-breather to really understand marketing.

 

[3dilettante]

There are some possibly related examples in the graphics industry.

I'm sure Trident, SIS/XGI, PowerVR, and S3 would have liked a nice halo effect at various points in their history.

There were obviously many factors involved in each individual case, but a number of them had relatively competitive parts in the mainstream price segments.

Drivers were an issue for a number of them, but they were problematic at different times as well for the market leader.
Making a name for oneself at the high end does seem to have an effect.

 

[archie4oz]

The halo effect is all about using your top-of-the-range product to market your company name.

Close but not quite... It's not necessarily your top-of-the-range product (which could be terribly unpopular). It's about perception. Where popular perception of a brand's particular (most popular/successful) product, extends to that of other products under that brand (therein to that brand as well). Basically it's just one form of cognitive bias.

Take a look at some market research numbers and you'll see that this is definitely the way most consumers think..as scary as that is...

Like I said, it's just simply a form of cognitive bias. As a consumer you're not generally aware of it. As for people poo-pooing "idiotic consumers" for their spending habits, just remember, you're a consumer too, and I'm pretty sure every person posting in the thread is guilty of falling into that trap in one form or another (be it cars, computers, clothing, food, etc.)... As much as we take pride in ourselves for being "informed consumers" I'm pretty sure nobody here does extensive market research on every little thing they buy....

 

[AlexV]

Close but not quite... It's not necessarily your top-of-the-range product (which could be terribly unpopular). It's about perception. Where popular perception of a brand's particular (most popular/successful) product, extends to that of other products under that brand (therein to that brand as well). Basically it's just one form of cognitive bias.



Like I said, it's just simply a form of cognitive bias. As a consumer you're not generally aware of it. As for people poo-pooing "idiotic consumers" for their spending habits, just remember, you're a consumer too, and I'm pretty sure every person posting in the thread is guilty of falling into that trap in one form or another (be it cars, computers, clothing, food, etc.)... As much as we take pride in ourselves for being "informed consumers" I'm pretty sure nobody here does extensive market research on every little thing they buy....

Quite certainly so...we`re all idiotic when it comes to buying stuff, let`s be realistic about this. That`s why sometimes we`ll buy stuff against all logic, just because it`s made by or whatever. That`s why we`ll go to supermarkets and hipermarkets to get two things, and come back with the car filled with junk we simply saw(and even though we`re aware of doing this, we`ll keep on repeating and repeating the behaviour). I don`t think this was under scrutiny

 

[digitalwanderer]

is anyone really that dumb?

Yes, quite a few people actually. You will almost never go wrong over-estimating the amount of stupid people in the world, there are always a whole lot more than you think there are.

As a general rule; people = sheep.

 

[AlphaWolf]

Its just brand recognition. The average person won't spend months researching a purchase (or even an hour), they go by what they remember hearing. They walk into a store they look at whats available and they remember, oh I heard good things about brandx, they buy based on that information. That or they ask a friend, who also heard good things about brandx.

 

[Geo]

I can tell you how my brother-in-law, who is a very successful and bright electrical engineer with his own business, bought a video card for his new home theater.

When I say "home theater" I mean for real too. I'd estimate he's got about $20k into that thing not counting the fact that its dedicated square footage in his house.

He's got the 1080 projector, he's got the monster screen on the wall, he's got 8 leather arm chairs in two rows, stadium style (i.e. back row higher). He's got the LG Blu-ray/HD DVD combo player. Etc, etc. When I sat down in it for the first time on Sunday I said, "Where's the popcorn maker?" because I couldn't think of anything else to razz him about not having.

I'm not bragging on my brother-in-law here, I just want you to get the picture. This is a very intelligent, educated, and rich dude.

So how did he buy a vid card for the HTPC portion of his home theater? By price. He bought a 8800GTS, because it was one down on the price range and he wanted the best features-wise, but figured he didn't need a gaming card (i.e the absolute best performance-wise).

Of course, it turns out that both graphics IHVs are actually putting their best video goodies in their midrange offerings these days, rather than high-end. But oh well.

So, yeah, I do think the halo effect makes a difference. I know the execs at both companies think so too, because I've heard them say it often enough.

Does it sell every card? No, of course not. Does it sell (and, when you don't have it, not sell) some significant portion of cards? Yep, sure does.

And, no, he didn't ask me first. And this last weekend I had to explain to him what he probably really wants is a HD 2600 XT the begining of July.

 

[trinibwoy]

"I'm going to buy the worst possible product available in my price range because the company that makes that product also produces the best possible product in a completely different price range."

Your first statement renders your whole question invalid IMO. You are presuming that your protagonist knows that the product is inferior. The halo effect is an "assumption" of superiority of a product because an associated product dominates in its segment. It has nothing to do with buying a product in spite of knowing better

 

[trinibwoy]

That's what I have a problem with. If someone knows enough to know that (say) 8800GTX is better than R600, then surely he must also know enough to realise that 8600 and 2600 are different products?

Think of the myriad number of ways one can come to know/believe that the 8800GTX is better than R600 and you'll have your answer.

 

[Davros]

Beleive it people are that dumb

i once passworded someones bios because they were going on holiday and had builders in the house and she didnt want them snooping in her pc

so when she gets back i get a phone call

"i cant get past the password"

have you spelled it right

"yes"

so i look at my notes and she hasnt
so i give her the correct spelling

"it still wont except it "

ok is it saying inccorrect password

"no"

what do you see on screen
"password then ******"

do you have the capslock on

"how do i tell"

is there a light on the top right of the keyboard


"the keyboard has no lights"

it was one of those keyboards that didnt

ok press the capslock and retry the password

"did that nothings happening"

ok i need you to make sure the keyboard is plugged in properly

"it is"

ok let me think

"Oh dav you know after ive typed in the password should i press the enter key ?"
DOH......................

heres another one

"Dav my pc is running dead slow"

so i have a look at it and ask how come it has windws xp on it

"i put it on, xp's better isnt it"

not an a 300mhz celeron with 64mb of ram

 

[digitalwanderer]

"Dav my pc is running dead slow"

so i have a look at it and ask how come it has windws xp on it

"i put it on, xp's better isnt it"

not an a 300mhz celeron with 64mb of ram

Yeah, you know what I'm talking about. Sounds like you've spent a bit of time in the trenches too.

 

[poopypoo]

Yeah davros! that's a good one!

One other thing about the halo effect in graphics cards, is it seems to me, it preys primarily on people who don't realize just how quickly things change in the industry. I've had a number of fairly computer-savvy friends go and get this or that gpu because they were pretty sure, four months ago, that it was top-of-the-line. Or because they walked into a store and said "I'm ready. I want the top-of-the-line brand X." Of course, in the former cases the gpu they bought was now former generation (and, in brick-and-mortar stores, often not very discounted). And in the latter cases, the GPU they were proudly buying was now of a completely different generation, one that would (for example) see their beloved grpahics behemoth go out of business.

What surprises me even more is the sheer number of these people buying things like graphics cards via brick-and-mortar. I'm always like you work in IT. You order stuff for your company all the time via newegg. they have a humongous selection and pretty damn good prices and a great return process. Why would you go into Best Buy nd just get whichever graphics card they have leftover? they always say something like "well i wanted it right now".

I myself even almost fell for the halo effect once. It was my first graphics card in a while and I'd never heard of this company called nVidia. Luckily my irc buddy showed me what was up and I learned a lot about graphics card reviews that week. So there isn't much separating me from the gpu-buying-masses, no.

 

[Skrying]

To me it comes down to one of my biggest problems with people in general. There seems to be this idea that: 1.) Expensive equals quality. 2.) If company makes good product A then the rest of their products must be good. 3.) Research takes to much time. Especially hands on reviews done by people with experience of multiple products.

For instance Bose comes to mind. Talk to any number of audiophile who have experience with hundreds of audio products and Bose is consider vastly over priced and not even close to worth it. However, people with their new iPod (again, not even close to being a good value...) are so happy with their new Bose Triports. Of course, when they show you and you tell them that some nice AKG, Sennheiser, Beyer, Ultrasone, whatever headphone would have been half the price and just as good sounding if not better.... they get angry. I take major offense from blissful ignorance. There is no excuse to not be informed, you're simply lazy if you spent $150 on a pair of headphones that beyond the paid magazine review is considered crap and then you're angry when I tell the truth!

Maybe its a bit to personal, but frankly the "halo effect" is most certainly out there and everywhere. If you haven't seen it then you're probably experiencing it. People will always listen to the easy voices and never dig deeper. Even those who you would think are educated in the matter (the above Bose story, a close friend who is a musician...) come up apparently brain dead.