Expert advice from Dr. Rachel Shinnar, a professor of management in Appalachian State University's Department of Management, was recently featured in a WalletHub piece about Cheap Car Insurance in North Carolina.
Here's what Dr. Shinnar had to say:
What does it say about car insurance companies that so many have celebrity endorsers?
Celebrity endorsements are used in marketing because celebrities have referent power. When people (celebrities) are well-liked, respected, or admired, this gives them referent power. We are likely to follow individuals whom we respect and trust, which gives us confidence in their recommendations. Thus, someone I respect and admire has referent power over me, making me more likely to follow their recommendation, whether it is for car insurance, a pair of sneakers, or shampoo.Do you think car insurance companies try to mislead customers, or is it just marketing?
When making decisions, consumers are often overwhelmed by the amount of information; this is why we often "satisfice"—meaning we look for a solution that is satisfactory and sufficient, one that is "good enough." Making the best or utility-maximizing decision would require us to evaluate many different variables, which can be overwhelming. When it comes to insurance, we have to understand cost, coverage, deductibles, and many other factors. If an insurance company can identify the salient variable for consumers, it can highlight that variable and persuade consumers to buy from them.
Read the full article at https://wallethub.com/cheap-car-insurance/north-carolina.
About the Department of Management at Appalachian State University
The Department of Management offers undergraduate and graduate degree programs to prepare students for various managerial responsibilities in today's dynamic environment. The student who is studying management will acquire relevant knowledge and skills necessary for success in a variety of small, medium, and large organizations. The department offers two undergraduate Bachelor of Science in Business Administration degree programs: the major in Management and the major in Hospitality and Tourism Management. The department also offers minors for both business and non-business majors in entrepreneurship, human resource management, and sustainable business. At the graduate level, the Industrial-Organizational Psychology and Human Resource Management (IOHRM) program is an interdisciplinary Master of Arts degree program offered jointly by the Department of Management and the Department of Psychology. Learn more at management.appstate.edu.
Rachel Shinnar
Appalachian State University