Would you believe it? A detailed investigation of believability in comparative price advertising

Abstract

The construct of believability has been shown to be a key variable in consumers' evaluations of comparative price offers. This paper provides a detailed investigation of believability in the context of such offers. In particular, it investigates the impact of the presence of, level of, and type of advertised reference prices (ARPs) on believability across a range of product contexts. An experimental methodology is adopted for the study. Findings show that the presence of an ARP does not enhance believability but that the presence of a time limit does. Believability is also shown to vary inversely with the level of ARP but is not related to semantic cues, such as list prices, contained within the offer. The study provides evidence that the product context of the offer impacts on believability. Two interaction effects are also identified. The paper contributes to the extant literature by providing new insights into how consumers' believability is influenced by how a comparative price offer is presented. Such insights will be of interest to academics interested in pricing, practitioners seeking to ensure that their promotions have maximum impact, and policymakers hoping to ensure that consumers are not misled by dishonest comparative price advertising.     

The Effect of Social Identity Cues Under Incidental Ad Exposure Conditions

Abstract

This study integrates the theories of social identity and unconscious processing to investigate the potential influence of unattended ads. Recent advances in research on unconscious processing have found that unconscious processing can include a semantic analysis of ads that includes the development of deeper meanings and associations related to cues in the ad. This study capitalizes on such an analysis by investigating whether using social identity as an advertising cue has the potential to influence consumer responses to ads—even ads to which consumers claim they have never been exposed.     

Menu price endings that communicate value and quality

This paper investigates the extent to which restaurant marketers use the price endings .00 and .09 to communicate quality and value images, and whether consumers use those price endings as information cues when choosing where to dine out. The experimental data shows that marketers probably rely on price cues and that consumers use those cues. Moreover, many other researchers have found that there is a perceived relationship between prices ending in 0 and overall quality, and prices ending in 9 and overall value. This paper discusses three theories that might explain why consumers associate the price endings 0 and 9 with quality and value: the Schemer Schema Intuitive theory, the Persuasion Knowledge Model, and signaling theory. Those theories suggest that consumers learn from the behavior of marketers and that consumers use their intuition, persuasion knowledge, and coping behavior to interpret, evaluate, and adapt to the marketers' pricing practices.     

Is mandatory country-of-origin labelling a retrograde step in the long run?

Abstract

There is a strong push from the farming community in Australia to persuade the government to legislate the compulsory display of country-of-origin labelling on retail products. This research examines the label elements considered by grocery shoppers who are inclined to examine the country of manufacture. Shoppers are most likely to consider the brand name when choosing a product, with the odds ratio of taking note of the country of manufacture being the largest for those consumers who scrutinize the name of the product and for those who ascribe the highest importance to the product's country of manufacture. Overt identification as Australian origin, for products without a recognizable brand name, may therefore not be advantageous to Australian producers. Country-of-origin prone shoppers also seek stronger reassurance from other cues on the product label. Shoppers would have to contend with the inevitable higher prices arising from label recomposition and country-of-origin compliance. To what extent increased prices would dampen demand is a moot point.     

Mental Imagery and Sound Effects in Radio Commercials

Abstract

Advertising researchers have not investigated the impact of the imagery-evoking sound effects included in radio commercials on learning, feelings, and attitude formation. Results of the current study indicate that the inclusion of sound effects can increase imagery activity and that there is a relationship between degree of imaging and feelings. Further, it is found that imagery evoking sound effects can result in more favorable attitude toward the commercial and in improved recall and recognition of ad claims. Implications for theory and advertising practice are discussed.     

Constructing Business-to-Business Marketing Models that Overcome the Limitations in Variable-Based and Case-Based Research Paradigms

ABSTRACT

Purpose: This article describes the principal limitations frequently observable in variable-based and case-based research in business-to-business (B-to-B) marketing.

Focus: The limitations relate to B-to-B theory construction, data collection, and data analysis and interpretation. The principal limitations in variable-based research include the reliance on regression (net effects) models in theory construction and the pervasive failure to test resulting empirical regression models for predictive validity. The principal limitations of case-based research are the frequent absence of rigorous theory formulation either pre- or postdata collection and failures to test propositions for predictive validity.

Recommendations: The article directs attention to iconic studies that break free in part from these and additional limitations. The article offers useful steps on how to break free completely from the principal limitations.

Managerial implications: B-to-B executives should insist that researchers include asymmetric algorithm models in reports that include symmetric (regression analysis) and analysis of variance findings.     

Some Evidence on the Early Price Effects of Attorney Advertising in the USA

When the US Supreme Court gave attorneys in the US the right to advertise their fees for routine legal services, the Court assumed that such fees would fall as a result of attorney advertising. According to economic theory, however, it is not clear what impact seller advertising will have on market prices. A major research effort designed to measure the price effects of attorney advertising in the USA began one year after the Bates decision. Some of the major findings of that study are presented in this paper. While none of the study's results so far indicates that the price effects of attorney advertising in the short run are likely to be substantial, the results suggest that the level of routine legal service fees may fall slightly or remain unchanged in constant dollar terms as a result of attorneys' use of advertising to promote their services and prices.     

The Influence of Product/Nudity Congruence on Advertising Effectiveness

Abstract

While a body of research has examined the effects of nudity appeals in advertising, previous studies examining the question of product/nudity congruency have failed to consider product categories of equivalent levels of involvement and towards which respondents had similar purchase intention. In this experimental study, we examine the role which product/nudity congruency and levels of nudity have on several measures of advertising effectiveness. We also examine the effect of the usa between these two variables. Our findings suggest that product type and the interaction between degree of nudity and product both influence significantly certain measures of advertising effectiveness. Implications for marketing professionals and researchers are outlined, along with directions for future research.     

Spending propensity and price perceptions

ABSTRACT

This article presents a systematic investigation of how Spending Propensity moderates consumers’ perceptions of prices. Results from three studies are presented. Studies 1 and 2 reveal that, in the absence of any external cues, consumers who are predisposed to spending freely evaluate a posted price more favorably than those who are not. Such consumers also report anticipating less pain associated with spending than those who are not inclined to spend. Additionally, Study 2 informs that simple price communication tactics, without any real reduction in price, may be effective at mitigating the pain felt among those who are less inclined to spend. Furthermore, such tactics are capable of reducing, and even reversing, the gap between those who are not predisposed to spending and those who are. Finally, Study 3 explores how spending propensity moderates consumers’ perceptions of a discount.     

Perceived product necessity,perceived value,customer satisfaction and affective attitude: an integrative model

ABSTRACT

Inter-relationships among perceived product necessity, perceived value, customer satisfaction and affective attitude are examined in Harare, Zimbabwe using structural equation modelling. The study provides evidence that perceived product necessity, perceived value and customer satisfaction each positively influences affective attitude. The findings also show that perceived product necessity has a positive effect on perceived value while perceived value has a positive effect on customer satisfaction. Lastly, the study reveals that perceived product necessity does not influence customer satisfaction. The research has implications for theory, managers and future researchers.     

Price Differences in Consumer Goods in Retail Markets

Abstract

This study analyses the effects that competition causes on the dispersion of prices in the mass market products. Therefore, a model is proposed that integrates the vertical, spatial and market environment factors that make up the competitive structure of the retail trade distribution sector. The results obtained, after processing a database of more than 19,000 records, indicate that various indicators of these three levels of competition exercise a decisive influence on determining the final prices of the analysed products. Likewise, the research allows verifying that there are significant differences in the effect caused by the analysed factors on the dispersion of prices, thereby depending on the considered product category (packaged goods versus fresh food).     

Bridging boundaries in consumption,markets, and culture

ABSTRACT

This article introduces a special issue of Consumption Markets & Culture on “Bridging Boundaries in Consumption, Markets and Culture” presenting research by scholars based around the globe. Together, their work examines ways in which the dynamic relations between consumer actions, the marketplace, and cultural meanings bridge boundaries in consumption, markets, and culture. All of the studies rigorously showcase new ways of addressing enduring problems, demonstrating the rich analyzes that emerge when researchers dare to bridge boundaries between multiple perspectives in theory building.     

Pretesting TV Commercials: Methods,Measures, and Changing Agency Roles

Abstract

Research directors with the largest 200 agencies and advertising executives with the largest 200 advertisers were surveyed to examine their views on the current state of TV commercial pretesting. One-hundred and one agency researchers and 89 ad executives returned completed questionnaires (adjusted response rates of 52% and 49.7%), which asked them 23 closed-ended questions about (1) the methods and measures used to pretest TV commercial executions; (2) the perceived role of the agency versus the client in the selection of pretest methods; and (3) perceived changes in the role of the agency research department in TV commercial pretest research. Of those responding, 18 percent of the agency researchers and 19 percent of the advertising executives indicated that their agencies do not pretest TV commercials for assigned brands. Based on the responses of the 83 agency researchers and 72 advertising executives whose agencies pretest commercial executions, the findings suggest that the role of the agency research department has changed over the past 10 years. Most notably, there has been a proliferation in the use of qualitative methods and measures in TV commercial pretest research.     

Evaluation of Social Marketing Efforts Designed to Increase Enrollment in the Children's Health Insurance Program (CHIP)

ABSTRACT

Expanded eligibility criteria for children in the federally funded Child Health Insurance Program (CHIP) has created unique social marketing challenges because of the need to engage families that historically have not received public support. The purpose of this article is to evaluate statewide outreach strategies to increase CHIP enrollment. Quantitative research identified the outreach strategies used by Ohio counties and determined the counties that demonstrated the greatest increases in child health insurance enrollment. Qualitative research explored consumer and outreach staff perceptions of which marketing strategies led to success. Findings, implications, and application to social marketing theory are discussed.     

Dynamische Preissetzung — Wer profitiert?

In the context of digitalisation, recent approaches for automatic price adjustment are gaining importance. However, these approaches can affect consumer behaviour in a way which is disadvantageous for consumers, businesses and the state as a whole. In September 2016, consumer researchers met at the Heinrich Heine University in Düsseldorf in order to discuss the impact of dynamic pricing from the viewpoint of their research fields. As the articles make clear, the researchers found that dynamic pricing based on competitors’ prices is common, while personalised prices are extremely rare. The question arises as to what extent consumers consider dynamic prices unfair. The experts disagree about the necessity of a stricter legal regulatory framework. Furthermore, digital technology can be used to help consumers find their way through the complex online world. Ultimately, the question of who profits–the consumer or the trader–has not been settled. The discussants conclude that there is need for further research in many different research fields.     

Visual cues during shoppers’ journeys: An exploratory paper

The visual cues shoppers view at the point of purchase during the shopping process is vital to product selection and sales. We aimed to identify the intrinsic and extrinsic visual cues or touchpoints customers use to select a product (live plant) in retail stores. Eye-tracking technology (ETT) has enabled market researchers to conduct cost- and time-efficient studies. Few studies have been conducted in a retail setting to pinpoint how shoppers attend to visual cues in situ. Using ETT gave researchers insight into the cognitive processes leading to purchase. We recruited four retail greenhouses in Michigan to collaborate on the study, and researchers invited customers from the store’s email list to participate. Researchers used eye-tracking glasses to record eye movement during a <12-min shopping trip to purchase a $10 plant. We analyzed 150 useful videos to identify attention to marketing and non-marketing cues at the point of purchase (e.g., reading a sign, product interaction, cell phone use). Time spent in specific store areas (e.g., annuals, perennials, shrubs, etc.) was measured. For 67 shoppers who purchased an annual plant, we analyzed which cues and touchpoints influenced the shopping time spent. Results showed that the most frequently accessed cue/touchpoint was intrinsic: product interaction (looking at or touching a plant). Participants read, on average, 6.7 signs with price and 4.5 signs without price. Conversely, only 34% interacted with employees, and 19.4% used their cell phones. Building on this exploratory study, future research could investigate signage elements attracting attention and motivations for employee interaction and cell phone use.     

Measuring Consumer Sensitivity to Corporate Social Performance Across Cultures

ABSTRACT

In the context of a severe economic crisis, the objective of this research is to examine to what extent the economic crisis and austerity's measures have generated new marketing strategies in food companies. We develop a comparative analysis though multivariate analysis of variance, consisting of 10 food product categories across eight European countries, distinguishing between countries that needed financial support—the so-called rescued countries—and the countries with better economic development. Our findings show an increasingly trend toward increasing product prices and price per quantity in the rescued countries, along with an increase in the package content. Our findings suggest that food companies have been raising prices through the recession, as consumers continue to pare their spending and demand.     

The Contingent Effects of Semantic Price Cues

This research endeavors to understand the contingent effects of semantic price cues while taking into consideration several important contextual factors. These factors include where the customer encounters the semantic cue (in-store, at-home, online), whether the consumers’ shopping goal is hedonic or utilitarian in nature, the impact of shopping alone or with a companion, as well as the consumer's motivation to process the product information. Findings indicate that a within-store cue (compared to a between store cue) enhances evaluations when the shopping in a store with a utilitarian goal, when shopping alone, and when their motivation to process is low. A meta-analysis of the results demonstrates the robustness of the differential impacts of these semantic cues.     

Materialistic cues make us miserable: A meta-analysis of the experimental evidence for the effects of materialism on individual and societal well-being

Consumer-oriented societies are awash with materialistic messages that link happiness and success to wealth and consumption. However, despite extensive research evidence that dispositional materialistic orientations are correlated with lower well-being, the effects of materialistic cues on the well-being of individuals and social groups have not been examined. The present research meta-analytically reviews the experimental evidence for the causal effects of materialism on two dimensions of well-being: (a) individual and (b) societal. We included 27 independent studies that met the inclusion criteria of priming materialism and measuring well-being (N = 3,649), containing a total of 62 effect sizes. Multilevel modeling revealed that materialism has an effect on both individual (δ = −0.39) and societal well-being (δ = −0.41), suggesting that materialistic cues cause lower well-being. Moderation effects suggested that materialistic cues might have a higher effect on interpersonal well-being than on self-evaluation indicators. We discuss the limitations of the current evidence, highlight the research gaps and underdeveloped areas, and provide recommendations such as minimum sample size for future experimental work, since the advancement of this area will help us to gain a better understanding of the impact of consumer-oriented societies on the well-being of individuals and social groups.