In times of terrorism, home is where the consumer is

The tragedy of a terrorist attack and the extravagance of a $2,000 espresso maker may not be as unrelated as they seem, according to research by Michal Herzenstein, assistant professor of business administration.

Herzenstein, who specializes in marketing and consumer behavior, has conducted experiments to examine the effect that frequent terror attacks—or the fear of such attacks—have on consumers. She and Sharon Horsky, a colleague in Israel, have focused on that country and on a recent period of years in which numerous attacks occurred there, often in the form of suicide bombers targeting buses, coffee shops, markets and restaurants.

A great deal of psychological research has already found that when people are thinking about death and considering their own mortality, they are apt to also consider buying high-status, luxury items such as Rolex watches or Armani suits, Herzenstein says. That’s why, she notes, viewers of television news shows covering wars and murders might see more ads for high-end cars than for soft drinks.

“But, what we found is that when people think specifically of dying in a terror attack, they aren’t interested in those same kinds of luxury items that make them feel important,” she says. “Rather, they will spend their money on items that will make them feel safe. The ‘death-related-to-terrorism mindset’ is different from the ‘general-death mindset.’”

One notable difference, she says, is that most people would like to forget that they are destined to die eventually, but people who live in areas of frequent terrorism want to remember that they may become victims of such attacks. This is because they believe they can learn from the survivors of previous attacks and do certain things to reduce their own risk of becoming victims.

During the period of frequent attacks, Herzenstein says, Israelis learned to take such precautions as sitting at a table in the back of a coffee shop or restaurant, because suicide bombings generally occur near the entrance. At the same time, business owners began eliminating glass storefronts that could give possible bombers a clear view of the interior.

“But the biggest precaution you could take to minimize your risk of being a victim was simply to stay home as much as possible, and that’s what a lot of people did,” Herzenstein says. That’s where the $2,000 espresso maker comes in.

In one of the studies she and Horsky conducted, they devised two mock advertisements for the top-of-the-line espresso machine. One ad touted the many features and capabilities of the machine, while the other conveyed the message: “Invite your friends to the coffee shop in your living room.”

The second ad, designed to suggest that purchasing the machine would enable the buyer to continue to have a fun social life (and good coffee) while avoiding the perceived danger of sitting in a coffee shop with friends, was significantly more effective among those research participants who had a high awareness of terrorist attacks, Herzenstein says.

To get the participants into a particular mindset, Herzenstein and Horsky used a series of statements to which each was asked to respond. One set of statements is designed to raise the awareness of death, another to focus that awareness on terror attacks and a third scale, designed to create lower-level anxiety, centers on visiting the dentist.

Other examples of luxury products with similar appeal to those with the “terror mindset” include home theatre systems and top-quality furniture. On the less costly end of the scale for those seeking to avoid public places, Herzenstein says such items as DVD rentals and home-delivered restaurant meals soared in Israel during the period she studied.

“It makes sense,” she says. “If people feel safer at home, they’re going to spend more time at home, and they’re going to buy items they can use there.”

Although the research was conducted in Israel, where Herzenstein was born and raised, she points out that the findings have larger implications.

“Terror-management theory is a new theory in marketing, although it has existed in psychology for over 15 years, and interest in it is growing,” she says, adding that she and Horsky aren’t suggesting that it’s desirable or ethical for marketers to prey on consumers’ fears. “Terrorism is a worldwide phenomenon, and terror attacks don’t even have to actually occur in order to affect people’s behavior. Just the threat of an attack can be enough. When the terror threat level was raised to orange in August 2004, Washington, D.C., looked like a city under siege; streets were empty and monuments vacant.”

For their next research project, Herzenstein is negotiating with a chain of coffee shops in Israel to obtain detailed sales data from several years, including those with frequent terror attacks, for analysis.

“People in Israel seem to be starting to feel safer again, which is a good thing,” she says. “But hearing threats of attacks is enough to remind us of the actual attacks we witnessed.”

Herzenstein earned a master’s degree in applied economics and a doctorate in marketing, both from the University of Rochester’s Simon Graduate School of Business, and bachelor’s and master’s degrees from the University of Tel Aviv. She joined the UD faculty in September 2006.

Ann Manser, AS’73