Processing Advertising Information: Deception,Salience, and Inferential Belief Formation

Four recent FTC cases on deceptive advertising were used to examine Fishbein's concepts of attribute salience and inferential belief formation. The findings suggest that (1) attributes considered salient by the FTC may not be considered by consumers when making brand choices, (2) a truthful ad may lead subjects to form incorrect inferential beliefs about product attributes (therefore, such an ad may ultimately be deceptive), and (3) information contained in advertising is processed by subjects to discount exaggerated statements, thus reducing the credibility of the ad.     

Addressing negative product attribute reviews: The case of advertising product attributes and corporate social responsibility information

Negative product reviews are bad for businesses. They can adversely affect product sales, brand evaluations, and brand loyalty. To attend to negative reviews, one approach is through advertising products or company virtues. The current study examines the efficacy of different advertising approaches (core product attribute advertising vs. non-core product attribute advertising vs. corporate social responsibility [CSR] advertising) in helping dilute the negative effect of dissimilar negative product attribute reviews (negative core product attribute reviews vs. negative non-core product attribute reviews). Through four experiments, we found that when the non-core attribute of a product had negative reviews, a core attribute advertising approach weakened the effect of negative reviews. However, CSR advertising was less effective. Furthermore, when the core attributes of a product had negative reviews, a non-core attribute advertising effort did not weaken, but actually augmented the impact of negative reviews. In addition, when the core attributes of a product received negative reviews, CSR advertising decreased the influence of negative reviews. Our findings provide theoretical and managerial implications for managing negative online reviews of product attributes.     

THE AUTOMATIC COUNTRY-OF-ORIGIN EFFECTS ON BRAND JUDGMENTS

An experiment was conducted to test the hypothesis that country stereotypes can be spontaneously activated by the mere presence of country-of-origin (COO) information in the environment, and they may influence product judgments even when consumers do not intend to base their judgments on COO. Participants learned the attributes of a set of brands from advertisements, and categorized each brand as good or bad by using a simple attribute rule. Results indicate that the accuracy of participants' categorization decisions was influenced by their intentional use of the attribute rule and the country stereotypes that were activated automatically by COO cues presented during categorization. This study also employed the process dissociation procedure to generate quantitative estimates of the two sources of influence. The results provide converging evidence that COO effects occurred automatically and contributed to product evaluations without participants' intention or control.     

Designing the content of advertising in a differentiated market

In many markets, consumers use attribute information to assess the value they expect from purchasing a product or service. This includes many low involvement experience goods including take-out food, many packaged good categories and restaurants. In these markets, quality differences exist but many differences are horizontal in nature: the consumer is interested in finding a product that meets her unique tastes. Beyond ensuring that consumers know the brand, the category and the price; it seems advertising should provide consumers with attribute information. However, a significant proportion of advertising does not provide it. In fact, within the same category, competitors respond to messages that emphasize detailed attribute information with messages that are devoid of attribute information. These messages are uninformative about product attributes. We explore how competition in a differentiated market is affected by the ability of a firm has to choose uninformative messages. We construct a model to investigate the factors that affect a firm’s decision to use advertising with detailed attribute information or advertising that does not provide it. The model demonstrates that content decisions about advertising are affected by the differences between products, the range of heterogeneity in consumer tastes and the degree to which costs increase as a function of the quantity of information in advertising. Surprisingly, even when the cost to increase the quantity of information in advertising is low, uninformative campaigns can be more profitable than campaigns with attribute information. The analysis also demonstrates that firms can be more likely to provide attribute information when there are less consumers that are attribute-sensitive. Finally, the model shows that uninformative messages can create “artificial differentiation” in some situations.     

When does an ethical attribute matter for product evaluation? The role of warm-glow feelings for low-rated products

Research on the effects of ethical attributes has recently gained traction. However, limited research has addressed consumer response to ethical attributes in the current context where product ratings have become of primary importance to make decisions. Specifically, this study examines the relative effect of ethical attributes on product evaluations across different product ratings. Building on cue consistency theory and the negativity bias, we suggest that ethical attributes gain weight when consumers evaluate a low-rated product. This process leads consumers to anticipate more warm-glow feelings, generating better evaluations for such low-rated products featuring an ethical attribute (vs. another type of attribute). Two experiments provide consistent empirical support for this prediction, and demonstrate that, compared to other attributes or no attribute, an ethical attribute increases product evaluations to a larger extent when the product received low (vs. higher) ratings. We show that this effect occurs because of warm-glow feelings: when product ratings are low, consumers anticipate more warm-glow feelings from purchasing a product with an ethical attribute (vs. another type of attribute), leading to better product evaluations. These findings have direct managerial and ethical implications for practitioners.     

Interaction between two types of information on reactions to delays

This study examines the effects of the interaction of two types of information about delays—information about the duration of a delay (delay duration information) and information about the reason for a delay (delay reason information)—on people’s reactions to delays. In this paper, we argue and demonstrate that the two types of delay information interact to affect attribution for the delay and perceived delay duration. The results obtained from an experimental study indicated that there was a stronger effect of delay reason information on attribution for the delay when delay duration information was absent than when the information was present. When no reason was given for the delay, the subjects attributed greater control to the service provider and perceived the delay to be longer when delay duration information was absent than when the information was present.     

Relative importance and combined effects of attributes on customer satisfaction

Customer satisfaction with a service experience is often determined by several critical attributes. Prior studies have suggested that food, physical environment, and employee service impose an important effect on diners' satisfaction with restaurant services. Although much research has looked at the direct effect of these attributes individually, little is known about them when they are considered together. This study investigates the relative importance and combined effects of the determinants of customer satisfaction in China's hospitality industry. The results show that food taste, employee service, and physical environment (in that order) all significantly contribute to diners' satisfaction, and that one attribute may substitute for another attribute in the satisfaction formation process. Generally, humanic attributes (employee service) can effectively substitute for less humanic attributes (physical environment).     

Using a Community of Knowledge to Build Intelligent Agents

The modeling of individual consumer preference can be aided by incorporating others' opinions which contain information above and beyond identified product attributes. The value of others' opinions is tested using two empirical data sets. The results indicate that incorporating others' opinions into an attribute-based model can reduce systematic error and increase predictive accuracy by serving as a proxy for missing information (e.g., undiscovered attributes or attribute interactions, sensory or experiential aspects of the product, as well as advertising or word of mouth effects). Additionally, modeling individual preference based on others' opinions alone is shown to predict as well or better than traditional multiattribute models thus bypassing the need for defining a product attribute space.     

Conjoint analysis of consumer preferences for roasted peanut products in Haiti

This study evaluated Haitian consumers’ preferences for three attributes of roasted peanuts: form (dry‐roasted vs. honey‐roasted), country of origin (Haiti vs. USA) and price (lowest vs. most common vs. highest). A sample of 199 respondents from three locations near Port‐au‐Prince revealed that price was overwhelmingly the most important attribute, although three well‐differentiated consumer segments were identified: the largest (44% of the sample) based strictly on price; a second (29%) distinguished by preference for honey‐roasted peanuts of Haitian origin; and a third (27%) preferring dry‐roasted peanuts imported from the USA. Segment membership was predicted by gender, education, household size, survey location and whether or not respondents were themselves the purchasers of the peanuts and peanut butter they consumed. Market simulation of a proposed, new domestic product (honey‐roasted peanuts from Haiti) revealed that a price near that of the currently imported product would maximize domestic revenues at about 15% above the current base.     

Mitigating information asymmetry through sustainability assurance: The role of accountants and levels of assurance

This paper aims to examine the usefulness of sustainability reporting in reducing information asymmetry as result of lower dispersion and higher accuracy in financial analysts’ earnings forecasts. The empirical results from an international sample of listed companies indicate that the disclosure of sustainability information alone is not sufficient in this regard as our findings indicate that information asymmetry is reduced to a greater when such information is assured, supporting the value relevance role of sustainability reporting and assurance. In addition, the empirical findings suggest differences in terms of assurance attributes (provider and level of engagement) and such differences are even more relevant when controlling the institutional context. Assurance is highly appreciated by investors in more stakeholder-oriented countries; however, in more shareholder-oriented environments, assurance affects information asymmetries only when it is provided by accounting professionals who also report a “reasonable” opinion.     

Promoting green buildings: Do Chinese consumers care about green building enhancements?

This paper explores sustainability‐related choices about buildings by analysing how consumers rated the relative importance of various attributes of conventional and green buildings. It also analyses how consumers judge environmental and health‐oriented improvements in green buildings. Unlike previous studies, this research applied conjoint analysis to explore the green building market at the consumer's level by regarding green buildings as nondurable green products and services. We used a survey to gather consumer preferences about several green building hotel models which partly applied green energy, modern wood structures and improved indoor environmental quality (IEQ). In total, 341 consumers participated the survey in two of China's largest cities: Beijing and Shanghai. The results revealed that green energy was the most preferred attribute of green buildings, exerting an even stronger overall effect on consumer choice than price. Afterwards, we identified distinct consumer segments and determined the background characteristics of each segment based on the similarities in the preferences for each attribute. The largest consumer segment, consisting of younger consumers, ranked green energy as the most important criterion. However, an improved indoor environmental quality was generally not highly ranked, and individuals in the consumer segment, which included more older and female consumers, were more likely to reject modern wood structures. The results also revealed that higher‐income individuals were most concerned with price, and consumers with higher levels of education were willing to pay more to support green buildings.     

Are interactive decision aids better than passive decision aids? A comparison with implications for information providers on the internet

While much has been made of the ocean of information available on the Internet, much less emphasis has been placed on how Web surfers might actually be able to process it. This article compares an interactive (user-inputted attribute importance weights) linear computer–assisted decision aid (CADA) format with three passive CADA formats in two studies. The decision environments for these tests are difficult, involving 20 to 30 brands rated on 6 attributes, one of which is negatively correlated with the others. Because the Linear CADA rank order is based on user-inputted attribute weights, it is expected to be more in concordance with the user's preference and hence is predicted to offer higher decision quality and be better liked than the passive formats. Contrary to expectations, however, a passive Equal Weight format performed as well or better than the Linear format on all objective and subjective comparison criteria, while the other two passive formats were not significantly worse on several decision quality criteria. The implications of these findings for information providers on the Internet are also discussed.     

Modeling the effects of including/excluding attributes in choice experiments on systematic and random components

This paper examines the impact of attribute presence/absence in choice experiments using covariance heterogeneity models and random coefficient models. Results show that attribute presence/absence impacts both mean utility (systematic components) and choice variability (random components). Biased mean effects can occur by not accounting for choice variability. Further, even if one accounts for choice variability, attribute effects can differ because of attribute presence/absence. Managers who use choice experiments to study product changes or new variants should be cautious about excluding potentially essential attributes. Although including more relevant attributes increases choice variability, it also reduces bias.     

规制关联交易的比较法分析

随着我国内地企业集团、资本市场的发展,关联交易这一特殊的经济现象已受到广泛的关注,德国和我国台湾地区将关联交易纳入公司法的调整范围,美国在处理关联交易引起的法律问题时,通常运用揭开公司面纱原则。我国内地公司法未将关联交易纳入公司法的调整范围,在关联交易规制方面存在不足,经济发达国家和地区规制关联交易的法律制度,对合理地规制我国内地的关联交易具有借鉴意义。     

The effects of traffic light labels and involvement on consumer choices for food and financial products

Traffic light (TL) labels that inform consumers regarding product safety have received increasing attention in different fields. Behind the background of behavioural economics, this paper presents the results of a split‐sample choice experiment conducted in Germany to evaluate the impact of TL labelling on purchases of food and financial products. We hypothesize that consumers experience different levels of involvement with these two types of products, leading to different recommendations regarding the use of TLs. The results show that TLs affect consumer purchases of both product groups by focusing their attention on specific product attributes. For food, whereas the low‐fat attribute has no significant impact on food choices that do not include TLs, this attribute has a positive impact on choices once it is signalled with a TL label. The positive evaluation of the organic production attribute of a food product without a TL decreases when the same product is labelled with a TL. In the case of financial products, TLs significantly reinforce the impact of all characteristics on choice probability. TLs also generate a halo effect with regard to return variance. Although consumers demonstrate different levels of involvement for the two types of products, involvement does not always impact the evaluation of attributes. Compared with less involved consumers, more involved consumers exhibit more heterogeneous evaluations of the return variability attribute in the case of the financial product and the organic attribute in the case of the food product.     

The relevance of irrelevance in brand communication

Brand managers strive to achieve an outstanding position in the psyche of the user by differentiating the product and service. In order to do so, brands are now often promoted by communications that focus on a trivial attribute difference. The current study tests both how the use of such an irrelevant attribute affects the perceptions of the consumer and how they rate the brand when the irrelevance of the attribute is previously revealed. The results of a controlled experiment (n = 894) show that the use of irrelevant attributes generally has a positive effect on buying behavior and that this effect is obtained even when the actual irrelevance is previously proven to the consumer. Further, the results are consistent across a variety of outcome variables, including attention, perceived uniqueness, price fairness, attitude toward the brand, and intention to buy the brand. © 2010 Wiley Periodicals, Inc.     

The Piecemeal Approach to Comparative Advertising

When attempting to portray the attractiveness of a brand vis-à-vis its competitors, an ad may make global claims about superiority or specific claims about one or more attributes. A special case of latter is the piecemeal ad in which the advertised brand is compared to a competitor on one attribute, a different competitor on a second attribute, another competitor on a third attribute, and so on. The present research demonstrates the effectiveness of this technique and explores the parameters of its influence. We find that piecemeal messages are persuasive because they make seemingly strong claims in a believable manner. Consumer skepticism appears to arise only when conditions for scrutiny are very favorable.