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Fan 1BUSI 600: Literature Review-Halo EffectZhengrong FanLiberty UniversityDr. Gene SullivanOctober 7, 2014
Fan 2AbstractThis article will introduce a very famous business topic, halo effect. Halo effect has a longhistory and has been used in every sides of people’s live. Halo effect means that the companyonly need to focus on one most valuable products and let the halo effect for rest of product line.Halo effect is not only a representation of market but also an action of human psychology. So itcan explains by psychology behavior. This paper will classify the current situation of halo effectand information that necessary to understand the topic. Then, the article is going to focus on thehistory of halo effect and try to look how halo effect was born. Next, the article will explain andanalysis halo effect in psychology, marketing, and business ways. Lastly, the article will focus onthe further question of halo effect.
Fan 3Introduction and history of Halo effectWhat is the halo effect? Let’s show an example in here first, if a customer buys product Awhich is made by company C, not because of the benefits of the product or how good the productis, but because he or she had a favorable experience with product B-another produce which ismade by company C. This kind of action is very general in people’s every day live. Anotherobvious example is that if one person who bought an IPHONE which is made by AppleComputer and has a very good experience with it, he or she may become a fan of Applecomputer and may continue buy other Apple’s product. The action of purchased item is said to beacting because of the halo effect. So, basically, the halo effect is driven by brand equity. Thearticle is going to talk about the relation between brand equity and halo effect later. Halo effect is a special customer action that is affected by people’s psychology behavior.Simon Laham and Joseph Forgas present a psychology definition about halo effect is that “Haloeffects refer to the widespread human tendency in impression formation to assume that once aperson possesses some positive or negative characteristic, other as yet unknown qualities willalso be positive or negative, in other words, consistent with the existing impression.” (Haloeffect, 2007) Halo effect is an obvious action is human psychology, it influences a person’sexpectations about other’s unknown qualities. (Halo effect, 2007) Edward L was the first personwho described the halo effect in the 1920s. Simon Laham and Joseph Forgas (2007) present thatphysical appearance is the first described of halo effect. “Physically attractive women werejudged to have more desirable internal qualities than homely, unattractive looking women.”(Halo effect, 2007) The reason that halo effect occurs is about human social perception is ahighly constructive process, people usually construct a meaningful image that fits in with whatthey already know; people is less like to choose a product or something from what they are