What is halo effect? One may ask; halo effect is a term that was first used by Edward L. Thorndike who was an American psychologist. The halo effect is a term that essentially refers to a pervasive tendency of the information processing system favoring a certain stimulus material as opposed to another. In other words it is a term that refers to a cognitive bias. In this scenario the perception of the one trait is directly influenced by the perceptions of the traits prior to it, which comes in a form of interpretation sequence.
In brand marketing it is a tool that is effectively used especially where the positive perception of one brand or item is meant to have an extended effect on the broader brands that the company produces. One good example where these halo effect has been utilized successfully is the ipod, which has had a positive effect on Apples other products. This came about because of the positive perception that the ipod created. The ipod has sold approximately 58 million units across the globe, leading to a positive spiral effects on the other products that Apple offers.
In Apples situation, the popularity of the ipod has continued to have significant positive effects on other Apple’s line of products like the famous Mac Computers. Mac computer sales increased up by 26% to sell over 1 million computers in the first quarter of 2005. Since its inception Apple’s growth had been unprecedented in the P. C market. However in the 1990s its market share started falling because of the onslaught from Microsoft windows and the IBM pcs that would eventually dominate the market.
Also the drop in market share could be attributed partly to a series of major flops in the products and missed deadlines increasing Apple’s vulnerability. After the release of Windows 95, the drop in sales was more pronounced. Because of this reason Apple decided to branch out into a different field of consumer electronics. The company diversified into other products like the Quick Take digital camera, the personal digital assistant or the PDA that was introduced in 1993. However, these products failed to impress the market but created a pathway for other products like the Palm pilot, Pocketpc and later the iphone.
Therefore the PDA acted as its front-runner for these later products. Later in October 23, 2001, Apple launched the portable media player or Ipod, which was to become its best selling brand in the digital music players. Since its inception, the Ipod has continued to play a very major role of sustaining the almost fanatical Apple consumer base especially in America. Halo effect therefore can have far reaching positive effects for any brand as can be seen from ipods case. Similarly, the effect can equally be negative to some extent. The halo effect corollary is called the ‘devil effect’ (or the horns effect).
The devil effect is a term that seeks to describe a situation where an individual or an item’s negative perception goes towards ‘spoiling’ the entire brand or product line that the particular company produces. Thus when relying on one product or a brand to have a halo effect for the entire brand name maybe a very high risk because when it fails to meet the perceived expectations the other brands suffer as well. In the case of Apple’s ipod a survey was conducted by Gere-Munster of Piper Jafferay, the survey uncovered some risks. Initially, as the survey revealed only 0.
5% of the respondent said they were unhappy with the ipod. This percentage was to jump to a high figure of 9. 5% during the survey. The average satisfaction response declined from 8. 9 to 7. 8 on a scale of 1-10 points. The findings of the survey clearly indicated that Apple as company was loosing some of its ardent customers; they were becoming more and more dissatisfied. This negative down turn the survey indicated was brought about as the respondents put it to the ‘battery life, durability problems’, combined with other general ‘glitches’ related to the hardware in the ipod and the iTunes software.
www. macobserver. com/stockwatch/2006/07/25. 1. shtml. Such a negative decline is bound to have adverse affect on other Apple brands. Already customers are complaining that Apple is not meeting the customer’s needs. The halo effect has continued to help to increase the customer base but this has also contributed to a situation where it is becoming increasing hard to ‘shoehorn all its customers into the same corner’ www. macoobserver. com/editorial/2008/01/24. 1. shtml
Therefore it is important for the company to realize that its customer base would be threatened when the customers start realizing that the ipod is being utilized as a tool to put them in a ‘corner’. It is imperative therefore for Apple, as a company to device new ways of responding to its customers needs instead of relying on the ipod’s halo effect alone. One the other hand, the other brands might fail to meet the ‘hyped’ ipod expectations, which would leave the consumers feeling cheated. It so easy for the company to depend so much on the halo effect to an extent it neglects the other important customer service aspects.
Situation that could lead to a negative halo effect Loss of image Loss of image sometime comes swiftly with disastrous effects especially when the company is found flat-footed. When a company is enjoying the positive effects that are derived from the halo, it is easy for it to forget about the competition and ride on the crest of the popularity of its products. This situation could lead to complacency on the part of the organization which would probably lead eventually to customer dissatisfaction and loss of image when the product fails to meet customer expectations.
www. macoobserver. com/editorial/2008/01/24. 1. shtml The loss of the brand could eventually lead to the extinction of the company because of what would be termed as ‘guilt of association’. In the customers’ eyes the company would likely be associated with the failed brand which will then be herded together with other lines the company manufactures.
www. macobserver. com/stockwatch/2006/07/25. 1. shtml: Accessed on 31 January 2008 www. macobserver. com/stockwatch/2006/07/25. 1. shtml. Accessed on 31 January 2008