Low price guarantees as signals of lowest price: The moderating role of perceived price dispersion

This article presents two experimental studies examining the effects of a low price guarantee on consumers’ pre-purchase evaluations and behavioral intentions. The authors first examine how the effects of a low price guarantee are moderated by consumer perception of market price dispersion. The results show that low price guarantee effects are likely to be attenuated when consumers perceive market price dispersion for a product to be high. The second study shows that higher levels of penalty can help restore a low price guarantee's effectiveness. Specifically, a low price guarantee with progressively higher levels of penalty leads to incrementally more favorable effects on key consumer outcomes when perceived price dispersion is high. Interestingly, penalty level has no such incremental benefit in case of low perceived price dispersion. Theoretical and managerial implications of the authors’ findings, the limitations of the studies, and future research opportunities are discussed.     

The role of attributions in consumer perceptions of retail advertisements promoting price discounts

This study examines whether information in an advertisement promoting a price discount is capable of affecting attributions made about the price reduction and whether these attributions, in turn, affect consumer perceptions and evaluations of the sale. Findings show that price image of the retail advertiser had a strong effect on attributions pertaining to the merchant and a marginal effect on product attributions. The attribution variables, in turn, explained significant amounts of variance in criterion variables measuring consumer perceptions of value, attitude toward the ad, and shopping intentions, beyond the variance explained by the store and discount claim variables manipulated in the study. These results suggest the importance of the role of attributions made by consumers when exposed to ads promoting discounts.     

Social selling cues: The dynamics of posting numbers viewed and bought on customers' purchase intentions

Online retailers provide social selling cues, such as “39 customers bought this product” or “156 customers viewed our product per hour”, to encourage sales. Revealing the numbers bought has been shown to increase purchase intentions, but what remains unexplored are the ramifications of posting the number of brand-related views or revealing both numbers bought and viewed so customers can determine the views-to-bought ratio. The number of views is much higher than the numbers bought, which customers may anchor on as a signal for product quality; however, a countervailing force is that views are a more ambiguous, hence a less diagnostic, cue. Five experiments revealed that: (1) showing the number of views or bought can, but does not always, increase purchase intentions; (2) revealing the number bought has a monotonically increasing (at diminishing rate) effect on purchase intentions; and (3) views exhibit a concave curvilinear effect in that, beyond a tipping point, increasing the number of views lowers purchase intentions. Given the anchoring effect of the larger views number, if the number of views or the number bought are relatively low, it is better to show the larger views number, but the reverse is true if the respective numbers are both high. Additional insights reveal that it is only advantageous to reveal both numbers if the views-to-bought ratio is lower than 20:1, which would apply to about the top 25% of brand landing pages. These findings were further validated in a choice experiment. Perceptions of product quality mediate the relationship between these social selling cues and purchase intentions; however, this is not the case for perceived skepticism (lack of trust in the information). Revealing these social selling cues is an online retailer’s prerogative; hence, these insights are theoretically interesting and have practical relevance.     

Anchoring effects of advertised reference price and sale price: The moderating role of saving presentation format

This study investigates how consumers utilize an advertised reference price and the posted sale price (SP) as anchors to adjust their internal reference prices (IRP). As expected, the effect of SP on IRP depends on the magnitude and direction of deviation from the IRP. When the posted SP exceeds IRP, it exerts an upward pressure on IRP, whereas when it falls below IRP, it has a negative impact. Consistent with prior research, consumers rely at least partially on the advertised reference price to adjust their IRP. The saving presentation format also moderates the effects of gains and losses on IRP but does not influence offer evaluation directly. Results suggest that retailers can enhance evaluations directly by pricing their products appropriately relative to consumers' IRP and indirectly through the choice of saving presentation format.     

Consumer responses to offline and online low price signals: The role of cognitive elaboration

Low price signals (LPS), pricing tools where retailers promise to match or beat competitors' prices, have been increasingly popular in offline and online markets. We compare consumer evaluation of offline and online LPS as a function of how deeply they process the signals. Results of an experiment indicate that regardless of retail media consumers accept an LPS as an indicator of low price when they do not elaborate sufficiently on the signal. However, at high levels of elaboration, consumers challenge the assumptions underlying their acceptance of the signal at lower levels of elaboration whereby they become more skeptical of an online signal than an offline signal resulting in lower efficacy of the former. Implications of these findings for consumer vulnerability to false low price signaling are discussed along with other theoretical and managerial implications. Additionally, directions for future research are provided.     

Internal and external price search in industrial buying: The moderating role of customer satisfaction

Despite price's great relevance in organizational buying decisions, prior research primarily studies price search in business-to-consumer environments. This research conceptualizes both internal and external price search in a business-to-business setting and focuses on how price importance affects these two types as well as how customer satisfaction moderates the relationships. Results show that purchasing managers' satisfaction associates positively with the effect of price importance on internal price search. Also, their satisfaction negatively associates with the effect of price importance on external price search. Price search reduces the price premium paid by customers (especially external price search).     

Examining the gamified effect of the blindbox design: The moderating role of price

A blindbox is a product design that incorporates uncertainty; a customer who purchases a blindbox receives a random product from a product series. The recent popularity of blindbox products calls for a rigorous examination of this product design. This study proposes a research model to examine the blindbox effects in an online retailing context. Following the uncertainty principle of gamification marketing, we hypothesize that the blindbox design can induce gameful experiences, thereby increasing customers’ brand engagement and purchase intention. We also investigate the moderation effect of an important design factor: the product price. Data from two experiments support the blindbox effects: this design leads to higher gameful experiences and marketing outcomes than a certain product. Moreover, the blindbox effects largely depend on the price: the effects are more salient at a premium price level and diminish below the average market price. Furthermore, we rule out two rival explanations, novelty and presentation richness, through supplementary tests. The findings, design issues, contributions, and directions for future research are discussed.     

Exchange rate determination: The role of factor price rigidities and nontradeables

This paper introduces factor (labor) markets into the intertemporal monetary model of Obstfeld and Rogoff and combines this richer market structure with a new utility-independent representation of nontradeables. This allows us to explore the international monetary transmission mechanism for factor price (wage) rigidities under different degrees of macroeconomic openness. Factor price rigidities imply similar properties for the international transmission mechanism as domestic producer price rigidities. Nontradeables give raise to interesting new effects under asymmetric monetary shocks: They create short-run PPP deviations, increase exchange rate volatility relative to price level volatility and reduce (positive) consumption and (negative) output comovements.     

Consumer responses to characteristics of price-matching guarantees: The moderating role of price consciousness

The present study develops and tests a conceptual model of consumer response to different types of price-matching characteristics (i.e., refund depth, length, and scope) across consumer segments with varying levels of price consciousness. A computer shopping simulation results show that a deep refund is interpreted as a signal of low prices by nonprice conscious consumers. However, price conscious consumers are found to associate deep refunds with increased prices, an unintended outcome for the retailer. The effects of price-matching characteristics on search and purchase behavior were also found to vary across more and less price conscious consumer segments.     

The effects of age cues on preferences for organic food: The moderating role of message claim

Organic food, a form of green consumption, is a growing industry, with consumers purchasing for both altruistic and egoistical motives. However, there is limited research into how marketers can develop advertising strategies to promote organic food. The present research examines how age cues influence consumer preferences for organic food. Across two experimental studies, this research demonstrates that consumers exposed to a younger cue show higher preferences for organic fruits when evaluating an altruistic claim. More importantly, this research draws upon psychological reactance theory to test the opposite effect, such that consumers exposed to a younger cue show lower preferences for organic fruits when evaluating an egoistic claim. Further, the emotions of compassion and anger are established as the mediators of the interactive effect between age cue and message claim on consumer preferences for organic food. These findings thus offer theoretical and managerial implications for the use of age cues and motivational claims, specifically in promoting organic food.     

English in Product Advertisements in Non-English-Speaking Countries in Western Europe: Product Image and Comprehension of the Text

ABSTRACT

Although English has been shown to be the most frequently used foreign language in product advertisements in countries where it is not the native language, little is known about its effects. This article examines the response to advertisements in English compared to the response to the same ad in the local language in Western Europe on members of the target group for which the ad was intended: 715 young, highly educated female consumers. The use of English in a product ad does not appear to have any impact on image and price of the product, but it does affect text comprehension: the meaning of almost 40% of the English phrases was not understood. These results were the same for all countries involved in the study, irrespective of whether the respondents’ (self-) reported proficiency in English is high or low.     

Entrepreneurial strategic posture and learning effort in international ventures: The moderating roles of operational flexibilities

Drawing from the attention-based view, this article extends the study of international entrepreneurship by investigating how the contribution of international ventures’ entrepreneurial strategic posture to their actual learning efforts in foreign markets depends on various flexibilities that underlie their operations. The results from a sample of international Chinese ventures indicate that an entrepreneurial strategic posture enhances international learning effort more to the extent that the ventures possess greater cognitive and political flexibilities. Somewhat paradoxically, greater structural flexibility impedes the translation of an entrepreneurial strategic posture into international learning effort. The findings have important implications for the growing body of research that adopts an international new venture perspective.     

Implementing price increases in turbulent economies: Pricing approaches for reducing perceptions of price unfairness

Consumer frustration over having less money in their pockets and, at the same time facing higher prices for products and services in the marketplace, arises during turbulent economic times (e.g., post-2007). Sellers suffer increased costs and pass along increases by raising prices to consumers. The current article discusses trends in the pricing literature and in practice that sellers utilize in limiting perceptions of price unfairness, particularly when increasing price in turbulent economic times. Specifically, engaging in transparency in pricing by revealing information about price changes to the consumer during poor economic times potentially reduces perceptions of price unfairness. Using industry-common price-setting practices, shrinking product volume, providing automatic rebates promotions, or offering price-matching promotions also likely reduces perceptions of price unfairness.     

The role of lifetime activity cues in customer base analysis

This paper develops the notion of lifetime activity cues in customer base analysis. The authors first discuss the impact of lifetime indicators, such as customers' conceptual response to marketing activities, and then demonstrate how such lifetime cues can be embedded into the Pareto/NBD model. The authors theoretically analyze the implication of this additional behavioral indication on the model's predictions. In an illustrative example, they aim to establish an intuitive understanding of the effects of such information. Evidence from the cellular phone industry supports the relevance of this concept: The empirical study finds a substantial improvement in predictive accuracy in two independent holdout samples. The study concludes with a discussion of the managerial relevance of the proposed approach and opportunities for further research.     

Neutralizing the shamefulness judgements of materialistic buyer behavior: The role of price promotions and the smart‐shopper attribution

As a value and lifestyle of acquiring more things to attain happiness, materialism has been long condemned by religious leaders, philosophers, and psychologists, among others. This criticism comes also from American citizens who readily affix moral‐shamefulness judgments to their country's standing as a leading materialistic culture, while they continue, nonetheless, purchasing discretionary, and self‐presentational goods at breath‐taking levels. We integrate dispersed literature on materialism, moral psychology, American history, and retailing to propose that observers judge higher materialistic buyer behavior as being more morally shameful; however, we also propose that observers will reduce the harshness of their judgments when the buyer secures a favorable price promotion that has been shown in prior research to evoke the smart‐shopper attribution. Three studies provide supportive evidence, including the moderating role of different levels or types of price promotions on shamefulness judgments and the mediating role of the smart‐shopper attribution. Together these new insights reveal the substantive and theoretical knowledge value of considering materialism more intently from a moral psychology perspective and considering how retail promotions can influence materialism judgments and buying behavior. Discussion focuses on extensions of our findings in future research and for consumer education.     

Fear of missing out and compulsive buying behavior: The moderating role of mindfulness

The current study investigates the relationship between the fear of missing out (FoMO) and depression, anxiety, materialism, and compulsive buying behavior (CBB). Furthermore, the study also investigates the potential moderating role of mindfulness in the relationship between FoMO and outcomes. A self-administered questionnaire was used to obtain data from 569 participants, and structural equation modeling was used to analyze that data through SmartPLS. The finding showed that FoMO has a positive and significant effect on CBB, whereas depression, social anxiety, and materialism partially mediate the relationship between FoMO and CBB. Additionally, mindfulness has a significant moderating role in the relationship between FoMO and negative consequences. This study underscores the significance of mindfulness-based interventions in mitigating the adverse effects of FoMO on depression, social anxiety, materialism, and CBB, among adults.     

The impact of hotel attributes,well-being perception,and attitudes on brand loyalty: Examining the moderating role of COVID-19 pandemic

This research sought to investigate the relationships between hotel attributes, well-being perceptions, attitudes, and brand loyalty in the hotel context considering the COVID-19 pandemic. The results of the study's data analyses revealed how tangible and intangible hotel attributes improved individuals' well-being perceptions before and during the COVID-19, as well as how these perceptions in turn influenced cognitive attitudes, affective attitudes, and brand loyalty during these periods. Furthermore, the moderating role of COVID-19 was identified in the link between well-being perceptions and cognitive attitudes and in the association between cognitive attitudes and affective attitudes. In light of these findings, a discussion and insightful implications for both theory and practice were provided. Finally, the limitations of the study and future research directions were addressed.     

Americanization as a driver of CEO pay in Europe: The moderating role of CEO power

This paper examines the relationship between Americanization and CEO pay levels in Europe and how this relationship is moderated by CEO power. Based on neo-institutional theory, our study provides empirical support for a link between Americanization and CEO pay levels. Drawing on a sample of large listed European firms, our results suggest that various dimensions of Americanization, i.e., Americanization of the CEO, of the firm and of the industry, can be associated with higher CEO pay. Combining neo-institutional approaches with managerial power perspectives, we show that Americanization can have an even stronger effect on pay when the CEO is powerful.