Unintended effects of incentivizing consumers to recommend a favorite brand

Marketers often use incentives such as coupons, rewards or special membership discounts in order to motivate consumers to purchase or recommend a particular brand. This practice is based on the underlying assumption that an increase in incentives will lead to an increase in consumer response – an idea which has been at the core of traditional economic thinking for decades. Some psychologists have claimed, however, that under specific conditions an increase in incentives can reduce (rather than increase) one's willingness to perform the behavior which is being incentivized. If materialized, the possibility that extrinsic incentives may diminish consumer willingness to recommend a favorite brand could have important theoretical and practical consequences in the context of word-of-mouth or buzz marketing. This study tests that possibility in the context of an experiment about Apple computers, a favorite brand among US college students. Participants were asked to recommend the brand to a friend (1) in absence of any monetary reward and (2) for a small monetary incentive. Students who were promised a small monetary reward experienced a decrease in intrinsic motivation and wrote shorter recommendations than those who were not promised any incentives. Data also suggest that the quality of the recommendation may decrease when incentives are offered. The results are discussed in line of their possible theoretical and practical significance.     

Measuring and managing the essence of a brand personality

Brand managers constantly face the dilemma of adapting their brands to changing consumer taste without diluting the brand’s essence. This study presents an approach that can be used to establish which features constitute the essence of a brand, and how candidate new features would affect the perceived essence of the brand. We build on Ahn’s (1998) causal status hypothesis, which holds that the essence of concepts (e.g., brands) consists of those features perceived to cause most other features of the brand. We empirically illustrate how this approach provides important information about consumer perceptions of envisaged changes to an existing brand.     

Too much of a good thing? Consumer response to strategic changes in brand image

The current research investigates a potential disadvantage of building brand associations that resonate with consumers' identities and facilitate consumer–brand bonding. The authors propose a theory of consumer response to changes that either dampen or augment the associations central to brand image (e.g., due to brand acquisitions or repositioning). The results show that consumers with a high degree of self–brand connection respond more negatively than others do to changes that dampen brand associations. Counterintuitively, changes augmenting brand associations can also lead to unfavorable consumer sentiments in certain instances. When brand connection was linked to an ideal self-identity (i.e., self-enhancement motives), changes that augmented the brand image increased the brand's ability to signal an ideal identity. Conversely, when brand connection was linked to the actual self-identity (i.e., self-verification motives), augmenting brand image reduced the perceived similarity between the self and the brand, thus causing brand identification to deteriorate.     

Competence Enhancement and Anticipated Emotion as Motivational Drivers of Brand Attachment

Focusing on the motivational processes underlying consumer attachments to brands, this research examines how competence enhancement and anticipated emotion (anxiety and joy) contribute to attachment. Personal attachment style (attachment anxiety) and type of motivation (intrinsic vs. extrinsic) are included as individual differences. Employing two field studies across different contexts indicates that competence enhancement leads to stronger attachments with anticipated anxiety (avoidance) and joy (approach) mediating this relationship. Analyses of moderated mediation further show that the effect mediated through anticipated emotion is stronger under conditions of high extrinsic and low intrinsic motivation, and when individual attachment anxiety is low. Implications for brand attachment research and management are discussed.     

The effect of overspending on tariff choices and customer churn: Evidence from mobile plan choices

Understanding the relation between consumer overspending, tariff choices and customer churn is extremely important in many industries. If consumers are insensitive to their overspending and keep making mistakes in tariff choices, firms may profit from overspending and do not have to worry about customer churn. In this paper, using a rich panel data from a major mobile network operator in China, we show evidence that consumers respond to financial incentives and try to reduce overspending by switching to another plan or terminating the relationships with the operator. Given the trade-off between profiting from overspending and reducing customer churn faced by the operator, we conduct a simple policy simulation and show that the operator should encourage consumers to reduce their overspending. We also show that the effects of switching decisions on future overspending and the hazard of churn differ among upward switchers (i.e. consumers who switch to a larger plan) and downward switchers (i.e., consumers who switch to a smaller plan). Specifically, we find that consumers who switch down are more likely to reduce their future overspending, while consumers who switch up are less likely to churn.     

Does attitudinal loyalty influence behavioral loyalty? A theoretical and empirical study

Despite a plethora of studies on brand loyalty spanning over last three decades, the research paradigm is unique in its inability to produce generalizable results. The research suffers from a lack of agreement over the operationalization of the construct of the brand loyalty. Many researchers [e.g., Kahn, B.E., Kalwani, M.U., Morrison, D.G., 1986. Measuring variety seeking and reinforcement behaviors using panel data. Journal of Marketing Research 23, 89–100; Ehrenberg, A.S.C., Goodhardt, G.J., Barwise, P.B., 1990. Double jeopardy revisited. Journal of Marketing 54, 82–91] have defined brand loyalty only from a behavioral perspective. They assumed that repeat purchasing can capture the loyalty of a consumer towards the brand of interest. Other researchers [e.g., Day, G.S., 1969. A two-dimensional concept of brand loyalty. Journal of Advertising Research 9, 29–35; Dick, A.S., Basu, K., 1994. Consumer loyalty: towards an integrated conceptual approach. Journal of the Academy of Marketing Science 22 (2), 99–113; Baldinger, A.L., Rubinson, J., 1996. Brand loyalty: the link between attitude and behavior. Journal of Advertising Research 36 (6), 22–34; Rundle-Thiele, S.R., Bennett, R., 2001. A brand for all seasons: A discussion of loyalty approaches and their applicability for different markets. Journal of Product and Brand Management 10 (1), 25–37; Rundle-Thiele, S.R., 2005. Elaborating customer loyalty: exploring loyalty to wine retailers. Journal of Retailing and Consumer Services 12 (5), 333–344], however, have suggested that attitude should be included along with behavior to define loyalty. In particular, Dick and Basu (1994) were precise in suggesting that a favorable attitude and repeat purchase were required to define loyalty. By viewing loyalty as an attitude–behavior relationship in their framework, Dick and Basu (1994) were able to investigate the concept from a causal perspective thereby permitting the identification of the factors that influence loyalty.Our research extends the idea proposed by Dick and Basu (1994) in two ways. First, we provide a conceptually clear, and an operationally meaningful way of segmenting the market on the basis of attitudes that govern this behavior. To be specific, we offer a unique way to measure attitudinal loyalty. And we use a unique survey data with a large sample of 1800 respondents that includes both behavioral (purchase) patterns and attitudes of the respondents for all major brands of toothpaste, to demonstrate that behavioral loyalty is influenced by attitudinal loyalty across many brands of the toothpaste category. Finally, we propose that a third behavioral pattern—non-user—should be also included along with two known behavioral patterns viz. single user and multiple user. This is because a non-user has the potential to become a consumer in future.     

The dark side of up-selling promotions: Evidence from an analysis of cross-brand purchase behavior☆

This research investigates how up- and down-selling promotions affect customers’ cross-brand purchasing and churn behavior at a multi-brand retailer. We employ a hidden Markov model that accounts for the dynamics of customers’ latent brand preferences and attrition and captures the resulting purchase behavior in response to promotional offers. Using data on coupon promotions and purchase transactions from an online retailer, we find that coupons for a higher-end brand increase customers’ likelihood of purchasing the brand. While this suggests that the retailer can increase its short-term revenues by sending coupons for the higher-end brand to customers of the lower-end brand, we find that customers up-sold via coupons are more likely to switch back to the lower-end brand, in comparison to other customers of the higher-end brand, limiting the positive effect of up-selling promotions in the long term. Moreover, lower-end brand customers’ promotion-induced brand switching leads to their increased attrition from the retailer, which negatively affects long-term purchase behavior and revenues. In contrast, when triggered by down-selling coupons, customers’ brand switching does not impact their attrition. Based on these findings, we demonstrate how our model-based approach can assist marketers’ multi-brand couponing decisions.     

Religiosity, Attitude Toward Business, and Ethical Beliefs: Hispanic Consumers in the United States

Growth of the Hispanic consumer population in America is changing the marketplace landscape. Due to their considerable buying power, a better understanding of Hispanic consumer behavior has become a necessity. The marketing literature has examined issues regarding religiosity and attitude toward business in regards to consumer ethical beliefs as well as research differentiating consumers on the basis of ethnicity due to their inherently different religious principles. Therefore, the present study contributes to the existing consumer ethics literature by examining the roles of religiosity and attitude toward business in determining consumer ethical beliefs. Furthermore, this study compares the relationships among religiosity, attitude toward business, and ethical beliefs at the sub-cultural level (i.e., between Hispanic and Anglo-American consumers). Survey data compare a sample of 187 predominately Catholic Hispanic consumers with a sample of 127 predominately protestant Anglo consumers. Results suggest a positive relationship between intrinsic religiousness and beliefs that questionable consumer activities are unethical. However, extrinsic religiousness does not impact consumer views as to the ethicality of consumer practices. Hispanics exhibit higher levels of extrinsic religiousness than Anglos, but no difference in terms of their intrinsic religiousness. Results also suggest that Hispanics have a more negative attitude toward business than Anglos do. Implications of these results are discussed.     

The Role of Logo Recoloring on Perceptual Fluency in Cause-Related Marketing Campaigns

Abstract

This article investigates the influence of brand esthetics on consumer response to cause-related marketing campaigns. Drawing on brand visual identity and advertising research, a processing fluency perspective is explored in the relationship between stimulus characteristics and consumer judgment. Processing fluency suggests color enhances the ease with which consumers recognize and process brand elements, and more broadly, cause-related marketing campaigns. Brand logos were recolored to enhance the perceptual fluency of the two entities. Its joint effect with conceptual congruence (e.g., fit) indicate that both low and high fit brands benefit from enhanced processing fluency, with a more robust outcome for high fit brands. These effects were mediated by logo evaluation, leading to a new path of fit perceptions in CRM initiatives.     

Exploring ethnic consumer response to crossover brand extensions

This research uses a social identity theory approach to investigate the impact of cultural identity on ethnic consumer response to ethnic crossover brand extensions—brands associated with one ethnic group that crossover into a product category associated with another ethnic group (e.g., McDonald's Café con leche). Study 1 demonstrates that the manner in which crossover brand extensions blend ethnic consumers' in-group and out-group cultural representations impact brand extension cultural fit and parent brand attitudes, and perceived ethnic target market impacts brand extension attitudes. Study 2 demonstrates that high ethnic embeddedness extensions strengthen ethnic consumers' self-brand connections. These findings provide managerial implications for practitioners considering a crossover brand extension strategy.     

The Influence of Consumer Degree of Knowledge on Consumer Behavior: The Case of Spanish Olive Oil

This article analyses the influence of perceived quality measured across intrinsic and extrinsic attributes on satisfaction and consumer loyalty for a traditional food product as with PDO (Protected Designation of Origin) olive oil “Aceite del Bajo Aragón.” In addition, the article highlights the influence of consumer's degree of knowledge on these relationships. The results suggest that the main drivers to explain consumers' satisfaction and loyalty are the perceived quality of the intrinsic attributes (color, appearance, flavor, etc.). However, when consumers are classified attending to their degree of knowledge the main explanatory variable of satisfaction and loyalty of the more experienced consumers are the extrinsic attributes of the product (brand name, place of origin, images associated to the product, etc.). These findings allow us to develop important managerial implications for building a brand image for a PDO.     

The Psychological Mechanism of Brand Co-creation Engagement

Co-creation for brand innovation is an intriguing and rapidly growing trend in the current competitive market. Past research emphasizes the economic gains of consumer co-creation, with limited research focusing on the psychological effects engendered in the process of consumer brand co-creation. Drawing from self-determination theory and implicit self-esteem theory, the present research proposes an integrative framework for synthesizing the perceived psychological benefits and distinctive motivations in the brand co-creation process. The results indicated that brand self–connection and three perceived benefits of brand co-creation tasks (autonomy, competence, and relatedness) facilitate consumer motivations to participate in brand co-creation campaigns. These motivations facilitate the establishment of brand co-creation engagement, which in turn leads to strengthened brand relationship behavior. This research exemplifies that a well designed brand co-creation contest is a potent means which can not only enhance consumer engagement with the co-creation contest, but also turn engaged consumers into intangible assets for brand innovation.     

What drives consumers to customize products? The mediating role of brand experience

Brands are increasingly seeking ways to engage consumers in deep and meaningful brand experiences. As technological advances have developed, brands have an increasing arsenal to draw on in creating brand experience. One increasingly common tactic is product customization, whereby consumers are provided the ability to create their own products from a set of options. With this study, we seek to understand the mediating role of brand experience in consumer decisions to customize products. Specifically, we investigate the interplay of non-brand drivers (those intrinsic to the consumer) and brand drivers (those extrinsic to the consumer) in the context of customization. In doing so, we develop an understanding of consumers' intention to use a customization toolkit and their subsequent intention to purchase customized products. We find brand experience drives intention to use a customization toolkit, mediating the relationship between individual factors and usage intentions. A customer's prior experience and their intention to use a customization toolkit are also direct drivers of customized product purchase intention.     

Results May Vary: Overcoming Variability in Consumer Response to Advertising Music

Although listening to music seems effortless, it actually involves many separate psychological mechanisms. This article describes and extends the multimechanism framework proposed by Juslin and colleagues, highlighting how the operation of psychological mechanisms leads to two general types of variability in consumer response to advertising music. First, the risk of between‐consumer variability (individual differences) in musical response is moderate or high for most mechanisms, and it often depends on each individual's particular history of exposure to music (listening biography). Second, within‐consumer variability occurs when different mechanisms have contrasting effects, so that an individual consumer's musical response is often mixed (e.g., guilty pleasures, bittersweet feelings, pleasurable sadness). Both types of variability can negatively impact advertising objectives (message reception, recall, acceptance, brand attitudes, etc.). The article offers preliminary suggestions for how marketers can use a multimechanism approach to successfully incorporate music in commercials and reduce the risk of unanticipated consumer responses. It ends with proposals for further research.     

Contextualized representations of brand extensions: Are feature lists or frames the basic components of consumer cognition?

According to the common view in consumer behavior, consumers represent brands and product categories mentally as lists of independent product features and engage in feature matching when they evaluate brand-product category compounds such as brand extensions. However, we demonstrate that brand extension concepts are subject to context effects and largely contextually organized — empirical evidence which suggests that they are represented by more flexible mental structures than independent feature lists. As an alternative, brand extensions (e.g., McDonald's Theme Park) may be viewed as conceptual combinations in which the original brand or company name (e.g., McDonald's) acts on the head concept of the extension category (e.g., theme parks) as a modifier. Moreover, we suggest that the contextual and relational structure of brand extensions may be explained more adequately by mental frames than feature list representations.     

What drives brand love for natural products? The moderating role of household size

Natural products, including food, cosmetics, and other fast-moving consumer goods, are becoming increasingly popular, and their health-related benefits are widely recognized. Despite the growing awareness and use of natural products, little is known about the enablers and barriers that influence consumers' brand love toward them. The present study attempts to address this gap and better explain consumer behavior toward natural products by utilizing the stimuli-organism-response (S–O-R) theory. The study rests on the premise that certain stimuli influence the internal state of consumers (i.e., the organism), which, in turn, shape their response to products and services. This study uses health consciousness and environmental concern as the stimuli, both facilitators (natural content and regional product) and inhibitors (usage and image barriers) as the internal state of the ‘organism’, and brand love as the response. Based on analysis of 720 responses, the study empirically reveals that health consciousness and environmental concern significantly influence the consumers' internal state, as represented by the identified facilitators and inhibitors . Three of these, namely, regional product, image barriers, and usage barriers, are found to shape brand love for natural products. The moderating role of household size on brand love is also confirmed.The findings of the study contribute to the literature on consumer behavior and practice.     

Projecting corporate brand image and behavioral response in business schools: Cognitive or affective brand attributes?

This paper considers corporate brand image, focusing on cognitive and affective brand attributes in the context of business schools. While previous research on university or institutional branding has studied these elements separately via cognitive (e.g., service or educational quality attributes) or affective criteria (personality traits of the corporate brand), this study investigates them jointly through behavioral responses (leading to positive recommendations about the corporate brand). This is important because brand equity such as positive word-of-mouth (or mouse) is derived from both attitudinal components, rather than being based on only one component. Drawing on an empirical survey of postgraduate (MBA) students from four business schools, the findings reveal that both cognitive and affective attitudinal components appear equally important in shaping corporate brand image. Further, when the mediating effect is investigated, interestingly, students' positive recommendations to schools depended largely on the affective (prestigious, adventurous, empathy and competence) rather than upon the cognitive brand attributes. This paper contributes theoretically to the corporate brand and consumer behavior literature by investigating both attitudinal components at a corporate brand level and investigates their effects on behavioral/conative response. The practical contribution of the paper and its managerial implications lie in the context of defining strategy in relation to positioning business schools in an increasingly competitive higher education market.     

The Cause Cue Effect: Cause‐Related Marketing and Consumer Health Perceptions

Many for‐profit companies (e.g., Kraft, Kentucky Fried Chicken, Keebler, 5‐Hour Energy) are partnering with health‐oriented nonprofits (e.g., Academy of Nutrition and Dietetics, Susan G. Komen for Breast Cancer Research, American Red Cross) to make purchase‐contingent donations. Companies use cause‐related marketing to improve brand image and goodwill for their food products and companies. Prior research has examined how food‐related cues can create consumer misperceptions; however, consumer perceptions related to corporate communications (e.g., the use of cause cues) has received little research attention. This research explores consumer reactions to cause cues and finds that adding a health cause to a food package significantly increases product health perceptions, and, usually, product attitude, and purchase intentions (i.e., the cause cue effect) in both a student sample (Studies 1 and 2) and an adult sample on Amazon's mTurk (Study 3). Implications for cueing and inference‐making literature, and for consumer health, and policymakers are discussed.     

Customer reactions to acquirer-dominant mergers and acquisitions

This article investigates consumer reactions to acquirer-dominant mergers and acquisitions (M&As) from the perspective of the (smaller) target brand and explores how marketing actions can mitigate negative effects. The findings from five studies show that consumers tend to react negatively to M&As by devaluing the acquirer brand, increasing their intention to switch, and adjusting their attitudes toward the target brand upward. We suggest that psychological reactance is a mediator of the negative effects of merger information on customers' attitudes and switching intentions. We also demonstrate that brand managers can attenuate reactance by involving consumers in merger decisions, thus providing important managerial implications for M&A decisions and processes.