In a recent collaborative study, researchers propose that psychological ownership is a driving cause for the evolution of consumption and should be the focus of marketing strategies. The study was recently published in the Journal of Marketing.
Current innovations in technology involve new products, services, and targeting new markets to meet consumer needs. Aside from creating value for consumers and firms, they disrupt psychological ownership or the feeling that the product is "mine."
According to the authors, the first key dimension of psychological ownership means "replacing legal ownership of private goods with legal access rights to goods and services owned and used by others." Second, "solid" material goods are replaced with 'liquid" experiential goods."
As a result, changes in consumption have three effects on psychological ownership. The feeling of "mine" can either be threatened, shift to other targets, or open new ways to keep ownership. The changes can then be examined within the major trends of marketing: shared economic growth, digitization of products and services, and expansion of personal data.
The Evolution of Consumption
Consumption is continuously evolving. In general, privately owned goods are being openly shared with others. For example, services like UberPool, Uber's carpooling service, have replaced personal car ownership. Another example is that printed photographs in frames and wallets have become digitized and kept on phones or social media platforms.
Instead of carrying cash, card or cardless transactions are becoming more common in urban settings. Nearly 50% of the global population can buy, sell, generate, and consume goods or information online. In the process, personal data and consumption patterns are generated in large quantities.
Today's consumption trends have many advantages such as convenience, lower economic costs, better sustainability, and better preference matching. As a result, legal ownership of physical private goods has become less appealing. For example, the rapid growth of online selling saves entrepreneurs from paying rent if they run their business from home.
However, there are consequences when consumers no longer have psychological ownership and are losing the feeling that anything a person owns is actually theirs. Carey Morewedge from Harvard University said that "Psychological ownership is not legal ownership," but is an asset for both firms and consumers. Enhancing the feeling that something is "mine" enhances customer satisfaction, attachment to the good, and perception of its worth.
Read Also : Study Suggests People Are More Focused on Expressing Themselves Than Engaging With Others
Enhancing Marketing Strategies
Other consequences of fulfilling psychological ownership include word of mouth (typically on social media), loyalty, and increased demand. On the downside, the loss of psychological ownership occurs when good are streamed, rented, or cloud-based - such as online subscriptions. As a result, consumers may transfer brands such as choosing between Netflix and Hulu or between YouTube Premium and Spotify Premium. Based on the performance of firms, there can be huge losses or wins of entire communities, such as gaining an entire fan base based on brand representatives.
The paper is a psychological ownership framework that opens the door for new research for marketing strategies. Companies can then understand, forecast, and manage consumerism which are largely influenced by psychological ownership.
Read Also: Personality Traits Can Now Be Predicted Using Smartphone Data
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