BUSI 600 LR Paper - Fan 1 BUSI 600 Literature Review-Halo...

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Fan 1 BUSI 600: Literature Review-Halo Effect Zhengrong Fan Liberty University Dr. Gene Sullivan October 7, 2014
Fan 2 Abstract This article will introduce a very famous business topic, halo effect. Halo effect has a long history and has been used in every sides of people’s live. Halo effect means that the company only 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 it can explains by psychology behavior. This paper will classify the current situation of halo effect and information that necessary to understand the topic. Then, the article is going to focus on the history of halo effect and try to look how halo effect was born. Next, the article will explain and analysis halo effect in psychology, marketing, and business ways. Lastly, the article will focus on the further question of halo effect.
Fan 3 Introduction and history of Halo effect What is the halo effect? Let’s show an example in here first, if a customer buys product A which is made by company C, not because of the benefits of the product or how good the product is, but because he or she had a favorable experience with product B-another produce which is made by company C. This kind of action is very general in people’s every day live. Another obvious example is that if one person who bought an IPHONE which is made by Apple Computer and has a very good experience with it, he or she may become a fan of Apple computer and may continue buy other Apple’s product. The action of purchased item is said to be acting because of the halo effect. So, basically, the halo effect is driven by brand equity. The article 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 “Halo effects refer to the widespread human tendency in impression formation to assume that once a person possesses some positive or negative characteristic, other as yet unknown qualities will also be positive or negative, in other words, consistent with the existing impression.” (Halo effect, 2007) Halo effect is an obvious action is human psychology, it influences a person’s expectations about other’s unknown qualities. (Halo effect, 2007) Edward L was the first person who described the halo effect in the 1920s. Simon Laham and Joseph Forgas (2007) present that physical appearance is the first described of halo effect. “Physically attractive women were judged 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 a highly constructive process, people usually construct a meaningful image that fits in with what they already know; people is less like to choose a product or something from what they are
Fan 4

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