The Michigan Daily - Monday, May 6, 2002-9
Newcomer discounts on products,
services displease old customers i
By Kim Benedict
For the Daily
According to a recent study conducted by
the University Business School, companies
that lower prices to promote business from
new customers may actually be losing busi-
ness from their loyal consumer base.
Companies that inadvertently target
"switchers" could see profits decrease by
about 9 percent, while their competitors may
see profits rise by the same amount, market-
ing Profs. Fred Feinberg and Aradhna Krishna
concluded.
Feinberg and Krishna, along with Prof. Z.
John Zhang of Columbia University, found
that customers who feel betrayed by their pre-
ferred company are 12 percent more likely to
take their business elsewhere, even though the
consumer may not gain by switching.
Krishna said offering price cuts to bring in
new customers has been a recent practice in
the mobile phone business and telecommuni-
cations companies as well as in other busi-
nesses.
"Specifically, we frequently find this hap-
pening in services with long periods between
payments," Krishna said.
According to the study, companies that
ignore the effects of betrayal and jealousy on
behalf of the consumer are seen as failing to
show appreciation for loyal customers.
LSA junior Benjamin Frank said he does
not feel betrayed by cellular phone compa-
nies, but instead feels that promoting lower
prices to target new customers is just a part of
the business, although he recognizes it is frus-
trating for loyal customers.
"I've switched my cellular plan a million
times looking for the best deal. It's just
annoying and a waste of time. It seems like
bad business for the customers already there,"
Frank said.
LSA sophomore Courtney Kennedy said
she looks for the best prices, regardless of her
history with the company. "It's just switching
phone plans, not trading family members,"
she said.
As far as prevalence in Ann Arbor, Krishna
said nationwide advertisements and promo-
tions make their way into small towns and
influence the consumer's decision to buy, but
the decision to buy is not generally based
solely on price.
"By providing good service and value to
the customer, a company may still be able to
keep their loyal customers," Krishna said.
'U' donates $400,000 Somel
to city for fire truck
By Morgan Caputo
For the Daily
The University will donate
$400,000 to the city of Ann Arbor
for the purchase of a new fire truck,
according to an announcement last
Monday
The gift is a part of the ongoing
cooperation between the University
and the city to improve the quality of
life and protection within Ann Arbor,
a relationship that has been greatly
strengthened recently, Ann Arbor
Mayor John Hieftje said.
University Director of Communi-
ty Relations Jim Kosteva said an
element of "mutual interest" exists
between the city and the University.
"It's indicative of the cooperation
that has been occurring on a number
of fronts over the past few years,"
Kosteva said.
"We've known for a certain period
of time that fire protection has always
been a concern for the city," he added.
The donation, "demonstrates the
mutually beneficial ways in which
the relationship between the city and
the University has grown and
respects the challenges we face in
providing a quality environment in
which to work and live," interim Uni-
versity President B. Joseph White
said in a press release.
Many residents from the community
support the University's decision.
Ann Arbor resident Jason Florence,
who survived a five-alarm fire that
burned down his workplace in down-
town Brighton three years ago, said he
is in favor of the University's gift.
"I think it's fantastic. As a victim
of a catastrophic fire in the past, it
is very refreshing to see the Univer-
sity helping the city's public servic-
es with such a generous donation,"
he said.
DEBBIE MIZEL/Daily
Law student David Boyle is trying to gain support so he can
be added to the congressional ballot for the 15th District.
Student seeks
line on ballot
for primary
By Megan Hayes
For the Daily
Though he is hundreds of signatures short of official candi-
dacy and knows his chances of winning are slim, University
Law student David Boyle still plans to run for the U.S. House
of Representatives from Michigan's 15th District.
He said that while incumbent candidates John Dingell (D-
Dearborn), who is the senior member of the House, and Lynn
Rivers (D-Ann Arbor), who has served the community for four
terms, are more qualified and more likely to win, winning is
not a direct indicator of his success.
"I don't necessarily see myself winning," Boyle said, who
will run against Rivers and Dingell in the Aug 6. Democratic
primary. "I want to make some points even if I don't win."
He said he is running a "protest candidacy" to give a voice
to what he feels democracy should be about.
Boyle said he wants to "show that you don't have to be 40 or
50 years old with a zillion dollars" to earn a position in Con-
gress.
He is pro-choice, pro-union and, among other things, dis-
agrees with tax breaks for the wealthy. "I agree with Democrats
on most things and, on some issues, go even further," Boyle
said.
His platform consists of four issues, including the Universi-
ty Board of Regents delegating more power to themselves, the
absence of a student regent, the lack of diversity in University
presidential choicesand a concern over the University's sexual
harassment policy. Boyle said an important aspect of his cam-
paign is that he cares about the community. "People like to
have someone conce ed forthem," Boyle said.
While he feels he will enjoy student support, he said he
speaks to the entire community and addresses issues that affect
everyone. "There is ample reason for people, not even stu-
dents, to be concerned (about these issues)," he said.
LSA senior Matt Nolan said he is excited to see a student -
interested in running for public office. "I think it's great,"
Nolan said. "Our generation has had a problem with people
not getting involved with the political process."
Nolan said he believes that Boyle's political interest shows a
reversal in that trend. Nolan added that he thinks opening up
the political realm with a wider range of individuals as candi-
dates is a positive step. "Breaking down barriers is normally
not a bad thing" Nolan said.
Michigan Student Assembly President Sarah Boot an LSA
junior, said she understands the point he is trying to make by
entering the election. She said she feels that by running, Boyle
will "bring issues pertinent to college students to the forefront
(of political discussion)."
"Hopefully, he can give the House of Representatives a
fresh perspective," she said, adding that if nothing else, "maybe
he'll get the vote out more."
The filing deadline for signatures is June 11 and the general
election scheduled for Nov. 5. Boyle still has to get over 900
signatures before he can run for the position.
LSA junior Conal Roche and Engineering junior David
Spencer bounce on a trampoline earlier this week.
Two University professors accepted to the
prestigious National Academy of Sciences
By Layla Jade Merritt
For the Daily
The National Academy of Sciences, one
of the nation's most prestigious scientific
organizations, recently elected two new
members from the University. Biological
chemistry and biophysics Prof. Rowena
Matthews and Psychology Prof. Richard
Nisbett, who were among 72 new members
recently elected to the NAS.
Matthews, a protein chemist said she was
elected because of her pioneering research
that discovered how vitamins essential for cell
growth and development reduce amounts of a
compound associated with heart attack, stroke
and birth defects.
As a female scientist, Matthews said she
was thrilled to be elected to NAS. Out of
the 24 members of the NAS from the Uni-
versity, Matthews is only the third woman.
Although women only make up about 10
percent of NAS membership, Matthews
acknowledged Midwest scientists are
probably the most underrepresented group
in the academy.
"Most people in the NAS are from the east
or west coasts," Matthews said. "It's a frater-
nity. You pick your own."
Nisbett said he was also pleased to be elect-
ed from a field he feels is underrepresented in
the NAS.
"It is an honor and I am very pleased about
it from the standpoint of a social psycholo-
gist," Nisbett said. "(NAS) has been reluctant
in recent years to elect social scientists"
Nisbett's recent research focuses on cogni-
tive differences in perception between East
Asians and Westerners. "We're analytic and
they're holistic, but I think we're not nearly
holistic enough," Nisbett said.
He has also been commissioned by the gov-
ernment to research cognition as it would
relate to the present Middle East crisis.
"I have been a consultant on that sort of
thing and I anticipate further involvement in
the future," Nisbett said.
Students also said they benefit from
University professors involved in ground-
breaking professors
"I think it's really amazing," LSA soph-
omore Friedman said. "It constantly
impresses me that Michigan is strong in so
many areas."