The effect of physical possession on preference for product warranty

Peck and Shu (2009) found that touching a product causes greater endowment effect. We seek to replicate and extend this finding to the case that whether touching a product consumers have just bought may increase the willingness to pay (WTP) for warranty. Loss aversion, the tendency to prefer avoiding losses over obtaining equivalent monetary gains, often explains product warranty purchases. This tendency will be stronger when the buyers consider the product as part of their endowment. Touching the product promotes stronger ownership perception and thus shifts consumer's reference point. The new reference point causes consumers to anticipate greater pain from the loss of the product and thus leads to higher WTP for product warranty protection. We find support for this hypothesis in two field studies with a total of 104 participants.     

The country-of-origin lie: impact of foreign branding on customers’ willingness to buy and willingness to pay when the product’s actual origin is disclosed

If you think about the last television commercial for an Italian pasta brand you have seen, are you sure it is really Italian? In many cases, especially in the food sector, neither the company nor the product originate from the advertised country, meaning that the company is pursuing a foreign branding strategy and is trying to benefit from positive stereotypes customers have about the specific foreign country. By collecting both quantitative and qualitative data through a point-of-sale intercept survey, this article assesses the impact of alleged origins on customers’ willingness to buy (WTB) and willingness to pay (WTP) if the actual origin is disclosed. The sample consisted of 200 German customers who were asked to answer questions related to one of two hedonic products they had just bought. It is empirically shown that foreign branding has a positive impact on the brand’s performance. However, as soon as customers find out that they were misled with regard to the origin of the product, both their WTB and their WTP decrease. This study contributes to the knowledge on the role of products’ origins on customers’ WTB and WTP. In contrast to the vast majority of the studies in this field, the communicated origin of the product is based on a foreign branding strategy and not on the product’s actual origin. Consequently, it was possible to manipulate within-subject variables by disclosing the actual origin of the product. The results of our study suggest that foreign branding may be a successful strategy for companies to increase their customers’ WTB and WTP. At the same time, our results raise concerns about the suitability of foreign branding as a long-term marketing strategy, unless a company can successfully maintain its foreign image. Future research opportunities include the choice of consumers with a different cultural background, of other hedonic products or of utilitarian products.     

Employing a Dichotomous Choice Model to Assess Willingness to Pay (WTP) for Organically Produced Products

Abstract

This study employs a dichotomous choice model to identify the socio-economic characteristics and attitudes that influence consumers' willingness to pay (WTP) a premium for organically produced products (OPP). Considering consumers' growing interest in quality and safety of food, the study attempts to identify consumers level of awareness on OPP, the intention to buy OPP and the WTP a higher price for OPP. Results highlight consumers awareness and intention, revealing useful information for the development of OPP market. The estimated maximum WTP indicates that consumers are willing to pay a substantial extra price to purchase OPP. Finally, WTP seems to be affected by certain consumer attitudes and socio-economic factors.     

Design and Communication of Ecological Content on Sustainable Packaging in Young Consumers’ Opinions

Many companies today have noticed the growing sensitivity of consumers to social problems, reflected by their interest in environmental concerns (e.g., the use of sustainable packaging materials that are eco-friendly and safe for consumers and the environment). Producers seek, often based on intuition rather than knowledge, eco-arguments for their packaging to affect the perceptions of buyers and to influence their behavior. Creating an effective design and content for environmental messaging on sustainable packaging may be a significant element in building a competitive advantage for both product and brand. Therefore, the main objective of this article will be to answer the following questions: What content do consumers expect for ecological messages on packaging? Which attributes of sustainable packaging have a positive impact on consumer behavior? In what ways are consumers’ purchasing intentions based on sustainable packaging? To answer these questions, the results of research conducted among Polish and French students will be presented.     

Will Consumers Pay for Voluntary Testing for BSE? Double-Bound CVM Evidence from Canada

The 2003 discovery of bovine spongiform encephalopathy (BSE)-infected cattle in North America led to efforts to ensure the safety of beef produced in that region, and to some discussion regarding testing live cattle for the BSE prion. This article investigates consumer acceptance and valuation of beef from live cattle that have been voluntarily tested for BSE. Using data from an Internet-based survey of Canadians, double-bound estimates of willingness-to-pay (WTP) are measured. Consumption behaviour and perception covariates were significant predictors of expected WTP, while socio-economic and demographic effects had no measurable impact. Expected WTP was not statistically significant, but ranged from 8% for respondents with a high-purchase intention to ?3.5% for those with low/moderate-purchase intention. Further analysis on subsamples of the data showed expected WTP ranges from ?5% to 5% for those with low/moderate-purchase intention and from 5% to 22% for those with a high-purchase intension.     

Does environmentally responsible purchase intention matter for consumers? A predictive sustainable model developed through an empirical study

Rapidly increasing demand for eco-friendly products is an example of responsible purchasing intention of customers. That responsible behaviour forces businesses not only to understand their responsible purchase intention, but also helps them to sustainability in the market for the long term. In this regard, very little discussion is available in current literature, especially in the context of apparel product consumption. Therefore, to contribute to literature in this field, this work aims to build a predictive sustainable model through an empirical study to examine the relationships among different factors such as attitude, social norms, perceived behaviour control, environmental consciousness, willingness to pay (WTP) premium and consumer purchase intention for environmentally friendly apparels. The data of two hundred and thirty-two respondents were analysed by structural equation modelling (SEM). With the help of the findings, it can be concluded that Indian consumers are aware of green apparels, have a positive attitude to them and show a responsible purchase intention to protect the environment. This is in contrast to the old saying that Indians are price sensitive given the emergence of higher WTP premiums for green apparel products. Other factors such as subjective norms, perceived behaviour control and environmental consciousness are also positively affecting consumer purchase intention. From the study findings, retail managers can benefit through more focused strategies for environmental protection to make a reduction in apparel material while educating their consumers about green apparel.     

Consumer purchase intentions for green products: Mediating role of WTP and moderating effects of framing

This research examines the role of consumers' willingness to pay (WTP) in the purchase decision process for a green product and investigates the moderating effects of two types of framing: price and ecological message claim. Using an experimental design, 262 participants were assigned randomly to one of nine conditions (3 price × 3 ecological message frames). The results reveal a mediating effect of WTP on the relationship between consumers' perceptions and purchase intentions. Furthermore, a price framed in aggregate terms reinforces the positive effect of WTP on purchase intention. The mere presence of an ecological message claim also enhances the relation between WTP and purchase intentions. This research proposes ways marketers can promote their green products. The results encourage the use of ecological messages and frames of prices in an aggregate form to enhance consumers' purchase intentions through WTP.     

The Effects of Product Placement in Fictitious Literature on Consumer Purchase Intention

Three experiments tested whether brand‐name products placed in a short story would be more often selected when two identical products with different brand names were presented in either a picture or text format in forced choice purchase intention and placement recognition tests. In Experiments 1a and 1b, there was no significant influence of product placement in a pictorial purchase intention task. However, in Experiments 2a and 2b, a reliable and equal level of recognition memory was observed, regardless of whether the products were presented in a picture (Exp. 2a) or text (Exp. 2b) format. In Experiment 3, the products were presented in a text format in the purchase intention task and participants more often and more quickly chose the brand‐name product from the story. At a practical level, these results suggest some limits to the usefulness of product placement in text.     

Culture, product type, and price influences on consumer purchase intention to buy personalized products online

With personalization, consumers can choose from various product attributes and a customized product is assembled based on their preferences. Marketers often offer personalization on websites. This paper investigates consumer purchase intentions toward personalized products in an online selling situation.The research builds and tests three hypotheses: (1) intention to purchase personalized products will be affected by individualism, uncertainty avoidance, power distance, and masculinity dimensions of a national culture; (2) consumers will be more likely to buy personalized search products than experience products; and (3) intention to buy a personalized product will not be influenced by price premiums up to some level. Results indicate that individualism is the only culture dimension to have a significant effect on purchase intention. Product type and individualism by price interaction also have a significant effect, whereas price does not. Major findings and implications are discussed.     

Malleability of taste perception: biasing effects of rating scale format on taste recognition,product evaluation,and willingness to pay

Product-related cues, such as brand or price, can influence consumers’ taste perception. Going beyond this observation, we examine the extent to which a stimulus-extrinsic factor, such as the format of the measurement tool on which consumers describe attributes of a taste sample, influences concurrent taste perception, and in turn, later taste recognition, overall product evaluation, and willingness to pay (WTP). The results of two experiments show that rating scale format (i) influences consumers’ concurrent impression of a taste sample, (ii) systematically biases later identification of the sample in a taste recognition test, and (iii) affects overall product evaluation and WTP. However, scale format (iv) does not influence ratings and downstream judgments when consumers are highly knowledgeable in the product domain. These findings demonstrate that the experience of taste is fleeting and not well represented in memory, and that like other subjective experiences, taste needs to be reconstructed based on accessible cues.     

Willingness-to-Pay for Multiple Units of Eco-Friendly Wheat-Derived Products: Results From Open-Ended Choice Experiments

A non-hypothetical open-ended choice experiment with a multi-unit elicitation format was conducted to elicit Italian consumer willingness-to-pay (WTP) and demand schedule for new wheat-derived products that were produced by adopting an ecologically friendly post-harvest technique (high heat-treated, HHT). A sample of 270 Italian consumers were surveyed in Bologna, Catania, and Palermo in June 2014. Data were analyzed using a double hurdle model. Results suggest Italian consumers are willing to pay premium prices for HHT flour, while they prefer to pay for HHT packed bread at the same price as a conventional one. Consumers’ WTP for the second, third, and more units are lower than their WTP for the first unit of product. While factors that influence consumers’ decision to buy these two new products are the same, factors that affect their desired product units differ among each products. In conclusion, Italian consumers’ preference for an eco-friendly label depends on the types of products.     

Buying while expecting to sell: The economic psychology of online resale

Consumer online resale is becoming increasingly common for transactions of secondhand goods. However, when accompanied by a preconceived intention to resell a product after using it, the initial consumer purchasing decision for self-use is complicated by the estimated resale value of that good. We applied the principles of mental accounting to develop and evaluate a new concept that may influence consumer resale and purchase intention: external resale reference price (ERRP). The study examines how online consumer sellers' economic psychology of buying affected their expectation of future online resale outcome. The results indicate that (1) consumers' awareness of future online resale potential can influence their purchasing decisions; (2) ERRP, which is mediated by the estimated resale return, can increase purchase intention; and (3) the effects of ERRP on purchase intention are moderated by online resale likelihood, but are minimal when consumers are aware that resale possibility is extremely low.     

New product pricing strategy under customer asymmetric anchoring

Potential customers' willingness to pay (WTP) for a new product can be affected by their observing a posted price and this can be modeled in terms of an anchoring mechanism. A theoretical argument and mathematical proof are developed, showing that if customers use an asymmetric WTP anchoring mechanism, it will normally be optimal for firms to price higher than otherwise. Experimental evidence is provided supporting the notion that an asymmetric anchoring mechanism can be involved in purchase decisions.     

Mitigating customers’ negative responses to physical presence reduction

Building on the social exchange theory and presumption of a firm's multi-channel strategy as a customer relationship management initiative, three experimental studies show that: (1) reducing physical presence negatively affects customers’ perceived relationship investment and trust and increases their switching intention; (2) to mitigate these negative effects, firms should engage in strategic decisions that benefit customers and are perceived as highly strategic. This research offers new insights suggesting that customers’ appraisals of firms’ strategic decisions influence their switching intention through the sequential operations of perceived relationship investment and trust. These findings are consistent for both services and retail contexts, highlighting the importance of firms engaging in strategies that are deemed to be unfavorable in the eyes of their customers to be perceived as highly committed to maintaining relationships with their customers.     

Enhancing the role of flow experience in social media usage and its impact on shopping

Online retailers are eager to find the answers to the following questions: How relevant is SNS usage to consumer shopping decisions? Is the information shared on SNS likely to influence users’ shopping decisions? This study is designed to answer these questions via essential factors based on flow theory and TAM. The moderating effects of some social factors were also explored. The data was collected from U.S SNS users, and SEM was performed and a research model estimated. The findings reveal that flow experience of SNS usage for shopping, perceived ease of use of SNS, and perceived usefulness of information shared on SNS exert positive and significant effects on consumer intention to shop on SNS. Particularly, flow experience directly and positively determines shopping intention and shares positive and significant impacts with TAM. Furthermore, the perceived usefulness is highly important relative to the perceived ease of use. Social identity, group norm, and social influence also positively moderate the links between flow experience, TAM, and SNS usage intention for shopping. Very few theoretical studies have discussed SNS usage behavior for shopping based on flow theory or validated its relationship with TAM in the SNS shopping context. A validated model of consumers’ actual usage of SNS for shopping proves that experience drives the success of social commerce. The findings provide current information and important aspects to firms that operate SNS commerce, allowing them to adjust their marketing strategies to serve consumers better.     

To stay or to leave: The moral dilemma of divestment of South African assets

The question of U.S. divestment of South African assets can be segmented into two major issues: (1) corporate behavior in a general sense and (2) nature of the product produced. The first issue has four sub-issues: (1) Is apartheid immoral? (2) Do corporations have any social responsibility? (3) Do the rights of South African blacks concerning the issue of apartheid outweigh those of the corporations to do business freely? (4) Are the benefits to blacks greater with divestment than without? The term “benefits” is then defined in both macro and micro dimensions. A “NO” answer to any one of the several questions would lead to the conclusion that there is no moral obligation for U.S. firms presently in South Africa to divest. The analysis presented will conclude that the answer to the first three questions is “yes”. Further, the answer to the first half of the fourth question (macro benefits) will be determined to be “no”. The micro benefit issue, namely, the nature of the product produced, will then be evaluated using a model based on which group benefits most from the item produced. Assuming corporations are successfully meeting their moral obligations under questions # 2 and # 3, then the general conclusion will be reached that firms producing items of direct benefit to the black community should stay; firms producing items of direct benefit to the government should divest; and no generalized model for analysis can be assumed for firms producing items which benefit both groups equally. Finally, a brief discussion is presented of the issue of obligation for positive action against apartheid, both political and economic, on the part of U.S. corporations.     

The Impact of Cause-Related Marketing on Millennials’ Product Attitudes and Purchase Intentions

This study, using scenarios, examined the impact of two kinds of cause-related marketing (CRM) efforts (a traditional donation of a portion of sales to a related cause and a more strategic one-for-one donation of donating a product to a related cause when that product was purchased) on millennials’ (those born between 1982 and 2000) attitudes and purchase intentions for four different consumer product categories. The four different consumer product categories selected included a specialty good (laptop), a shopping good (hat), a convenience good (bottled water), and a service (food restaurant). Given the importance of social media to millennials, this research also examined the role of social media on CRM awareness. While millennials had relatively low awareness of CRM campaigns, there was a positive correlation between social media use and CRM awareness. Additionally, CRM efforts may not work for all products as there was no impact on attitude or purchase intention for the product category of laptops. Additionally, the positive attitudes created by marketers’ CRM efforts will not always translate to increased purchase intentions. The use of a strategic one-for-one CRM effort though had a greater impact, specifically for products that deal with needed fundamentals, such as food and water.     

Building A Sustainable Shelf: The Role of Firm Sustainability Reputation

The reputation of firms for being environmentally friendly and socially responsible is a key purchase driver for sustainable products. However, the commitment of firms to sustainability varies – some firms are founded on strong environmental and social principles; other more traditional firms are built on strong product/brand focus and are not known for sustainability. In response to market trends, many traditional firms are introducing sustainable products to their portfolios. We argue that the firm’s sustainability reputation (FSR) will influence consumer purchase with respect to equally sustainable products from different firms. Two choice studies demonstrate that FSR favors sustainable product choice when the consumer decides between equally sustainable products. However, FSR affects the choice only for sustainable products and not regular products and does so only for consumers that construe sustainability at a high (abstract) level. Retailers should pay attention to the role that FSR plays in consumer response when they select sustainable products to sell.     

Harnessing the creative potential of consumers: money,participation, and creativity in idea crowdsourcing

Given the growing importance of innovation and consumer engagement, many firms are strongly interested in finding ways to encourage their consumers to generate creative new product ideas for them in their crowdsourcing initiatives. To that end, managers often use monetary rewards—one of the most commonly used managerial tools to stimulate desired behaviors. A critical question in this respect is whether the use of monetary rewards is effective in stimulating creativity and, if so, how large those rewards should be. This study aims to answer these questions. The results of an experiment suggest that introducing monetary rewards does not contribute to the number of new product ideas generated by a single consumer or the novelty of his/her ideas, and when the reward is relatively small, it can even be harmful. Monetary rewards, however, are effective in encouraging widespread participation in crowdsourcing initiatives and improving the appropriateness of the new product ideas. As a whole, these findings take us a step further toward better understanding the motivational mechanisms of consumer creativity in new product ideation.     

Why Consumers Hesitate to Shop Online: Perceived Risk and Product Involvement on Taobao.com

Heralded as one of the fastest-growing regions in e-commerce sales, Asia has received increasing attention from online retailers as a promising e-commerce market. Therefore, to provide better insight into Asian online marketplaces, this study focuses on Taobao.com (hereafter referred to as “Taobao”), a major Chinese online marketplace, and attempts to shed light on consumers’ perceptions of Taobao. More specifically, this study examines (a) what consumers in China think about Taobao as an online marketplace when purchasing high- or low-involvement products; (b) what types of risk are associated with each product; and (c) how online consumers’ risk perceptions consequently influence both their trust toward Taobao and their purchase intention. Multidimensional perceived risks (financial, privacy, product, security, social/psychological, time) were considered in the research. Participants were 217 Chinese university students. The results indicate that product risk and social/psychological risk were negatively associated with consumers’ trust and purchase intention, regardless of their degree of product involvement. Interestingly, financial risk was positively related to trust and purchase intention. Findings are discussed with managerial implications, followed by limitations and future studies.