Halo effect?

Reader question:

Please explain “halo effect” as in “the halo effect of Apple products”.

My comments:

Halo is a rainbow like circle of light. In religious paintings and pictures, we often see some holy figures, such as Jesus Christ or the Buddha wear a halo over their head and shoulders.

People like Jesus Christ and the Buddha himself are hard to come by, to be sure. When we think of them, especially if you believe in their doctrines, we conjure up all sorts of nice things about them. That’s why people award them the halo in the first place.

The long and short of it is, when we see someone wearing a halo, we tend to think well of them in every way.

That’s halo effect, in a nutshell.

American psychologist Edward Thorndike coined the phrase “halo effect” in 1920, to describe the situation where one’s positive attitude towards a person can lead to bias in their favor, or vice versa.

Namely if we see some young man tall and handsome we often tend to think that he has a good moral character too, even though one’s physical makeup don’t necessarily have anything to do with one’s moral fiber.

In terms of Apple, the gadget maker, its halo effect works in a similar way:

Over the years, people have associated Apple with good quality, which is fair and square because the original Macintosh PC, among others, is a wonderful piece of work.

Now that it’s gained that reputation, it finds it easy to market new products. In the same way we look at people wearing a halo and believe they can do no wrong, we think the next line of Apple products will be as good as those that came before.

That is bias in Apple’s favor. It can be misleading. I, for one, don’t find the iPod easy to use at all. It never allows you to load or remove a file without raising a major fuss. Someone gave me an iPod as a present. I played with it for a few days and eventually abandoned it, and I think, for good. I don’t think I’m going to buy an Apple product any time soon because of that experience. Its difficulty to use makes me think poorly of Apple as a whole.

Call it the halo effect in reverse, but you get the point.

I’m in the minority, of course. For a lot of Apple owners, their gadgets have not lost any luster at all. To them, Apple’s halo is as shiny as ever.

Just a warning though. Before you guy the next line of Apple products, beware and think twice. Apple’s halo, as the halo of anything or anyone, can be misleading.

Alright, here are media examples of “halo effect”:

1. iPhone owners may grouse about AT&T’s service, but the “halo effect” of Apple’s smartphone significantly boosts the U.S. carrier's customer satisfaction levels, not just its revenue, an analyst said today.

“Consumers experience services through devices, so if they love the device, they’re going to love your service,” said Carl Howe, director of consumer research with the Yankee Group. “That’s not intuitive.”

And people love the iPhone.

“The iPhone is the first Apple product to provide a halo effect beyond Apple itself,” said Howe, referring to the term that describes tangible and intangible benefits created by a successful product. Apple’s first halo effect came courtesy of the iPod, which analysts contended boosted sales of the company’s Mac computers.

“The iPhone halo effect is interesting, it’s a new phenomenon, and something that other carriers have to take into account,” said Howe.

- iPhone halo effect shores up AT&T, ComputerWorld.com, July 20, 2010.

2. Shortly after taking over as CEO of British Petroleum (BP), Tony Haywood said, “We have too many people [at BP] who want to save the world…we need to concentrate on our primary goal: creating value for our shareholders.” Similarly, a well known anti-tobacco advert features an actor playing a tobacco company executive saying to its customers: “We’re not in business for your health.” Tobacco and oil companies are easy targets, the first causing completely preventable disease and death, the latter consistently befouling the environment and killing endangered species as an integral cost of doing business. Public health, by contrast, is in business “for your health” and in the context of global health, “to save the world”. Are these two enterprises totally incompatible, as editor William Wiist suggests in the title to this collection, or is it possible that the energy of corporations can be directed and managed in ways that can protect and promote the health of the public in a meaningful way?

...

In The Bottom Line or Public Health, Wiist accepts the view that making money for its shareholders is the sole purpose of the corporation. Although a common belief, this is simply not true. And treating it as true makes meaningful government regulation more difficult and lets the managers and boards of directors off the public health hook in terms of their responsibilities. As John Kenneth Galbraith and others have accurately noted, corporations have many more stakeholders than their shareholders, including their customers, managers, employees, suppliers, and even society at large. Many corporations may act as if the only value they care about is their stock price, but there is nothing in the law or the theory of corporations that mandates this obsession with stock price and short-term financial gains. A private-public dichotomy that places corporations in the private sphere also cannot adequately account for the activities of corporations that are entirely owned by governments, such as global Chinese corporations and almost all oil companies, or transnational corporations that are largely owned by government-run investment funds.

There are also general characteristics of corporations that make them both especially powerful and potentially troublesome. First is our tendency to treat these entities like real people. In the USA this has most recently led to the Supreme Court affording corporations almost the same free speech rights as individual citizens. Second is the reason corporations were created in the first place: to provide investors with a place to invest money without risking everything they own. But even more important are the characteristics that make corporations different from people, specifically, potential immortality, and the ability to create an unlimited number of children (subsidiaries) and siblings (joint ventures). These characteristics turn out to be most important in the global sphere where transnational corporations can dictate to the governments that should regulate their activities. Although inanimate, corporations have paradoxically become the dominant life form on the planet. And this is why they are important to public health—not only to the health of global populations, but to the health of their customers, employees, suppliers, and the people living in areas affected by their activities.

So Wiist is especially persuasive in arguing that “externalization of costs is a major corporate activity with a direct effect on human health and the natural environment” from effects as diverse as air and water pollution, to causing specific diseases, to avoidance of taxes and corruption of government officials. The book’s contributors focus on five major corporate sectors that seem to have been especially damaging to the public’s health: tobacco, alcohol, agribusiness, automobiles, and the pharmaceutical industry.

Protecting and promoting the public’s health is predominantly a function of governments, but governments have been joined by others, especially non-governmental organisations (NGOs), in this activity. So it should not be surprising that corporations themselves have tried to co-opt NGOs and use them, and their “halo effect”, for their own purposes. BP, for example, gave millions to the Nature Conservancy over the years, many of whose members now express horror at these gifts in the wake of the Gulf oil spill. Private-public-NGO cooperation can make sense; but such cooperation is not necessarily consistent with public health goals, and each joint project should be judged on its own merits. The working assumption should probably be that corporations are much more likely to corrupt NGOs than NGOs are likely to get corporations to engage in meaningful public health activities.

- Corporations, profits, and public health, TheLancet.com, August 21, 2010.

3. Taking advantage of its presence in the industry’s fastest growing country, Starwood Hotels & Resorts has released intentions to open one new hotel in China every two weeks.

With over 70 properties already standing in the country, the hotel Group said it intends to open a further 90 new hotels to keep up with the growing market….

While the Starwood originally launched in China in 1985 to target inbound Western visitors, more than 50 percent of the guests today are domestic travellers.

Starwood president of global development Simon Turner added that the country is quickly becoming a “major global travel force” and is expected to see up to 100 million outbound travellers by 2017.

“For some perspective, that is more people than visit France each year, which is the number one international tourist destination in the world,” Mr Turner said.

“When they travel abroad, the Chinese will stay with the hotel brands they know from home, which underscores the significance of our growing footprint of flagship hotels in China and its halo effect on Starwood’s hotels around the world.”

- Starwood’s fortnightly expansion into China, eTravelBlackboardAsia.com, June 13, 2011.

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Zhang Xin