Virtual Bundling with Quantity Discounts: When Low Purchase Price Does Not Lead to Smart‐Shopper Feelings

Previous research has shown that promotional techniques influence both the smart‐shopper feeling and the consumption level at home through a direct mechanism (lower perceived cost) and an indirect consequence of promotions (larger supply). The development in France of virtual bundles with quantity discounts raises questions regarding a consumer's cognitive and affective appreciation of the deal, and therefore promotional efficiency. Four experiments on French consumers confirm the effect of price and supply on declared consumption, but only for “vice” products. In Experiment 2, virtual bundles with quantity discounts lead to the lowest perceived unit price and consequently to the highest level of consumption. Additionally, when compared with more traditional promotional techniques (e.g., physical bundles), virtual bundles with quantity discounts reduce the evaluation of a “good deal” and the smart‐shopper feeling (Experiments 3 and 4). To summarize, such promotional techniques, which might have seemed appealing at first (“buy more to save more”), are preferred less by consumers than more traditional promotional techniques. These preliminary results could be enriched by field studies that go beyond declared consumption and observe consumers evolving in their natural environment across time.     

I guess that is fair: How the efforts of other customers influence buyer price fairness perceptions

Past research has demonstrated that consumers' price fairness judgments are influenced by comparisons between the offer price they receive and the prices paid by other consumers for the same product offering. In today's digital age, reference points for purchases are more prevalent than ever. However, investigations on how certain inputs of the transaction affect these judgments is lacking. Specifically, extant research has failed to account for how the purchase efforts of other consumers can influence one's own price fairness evaluations. Moreover, relatively little empirical research has endeavored to understand the simultaneous cognitive and affective processes that explain how consumers arrive at price fairness judgments. To address these gaps in the literature, we introduce two studies aimed at understanding the process through which the salient efforts of referent consumers serve to mitigate perceptions of price unfairness when two customers pay different prices for the same product. The findings support a dual‐process model whereby the efforts of other (referent) customers serve to simultaneously reduce buyer anger and increase buyer understanding of the price disparity, ultimately mitigating perceptions of price unfairness.     

Store brand and national brand promotion attitudes antecedents

Retailers compete against national manufacturers by launching store brands. National manufactures regularly use brand promotions to fight store brands back. The purpose of this article is to find out whether attitudes toward national brand promotions and store brands have similar or different conceptual antecedents. The study presents and tests a model of the effects of shoppers´ characteristics (price and non-price-related) on attitudes toward store brand and national brand promotions. The results support that constructs relating to price impact both store brand attitude and national brand promotion attitude, but the strength of some of these relationships differ. Other shopper characteristics like brand loyalty and store loyalty, have similar negative and positive effects, respectively. These slight differences suggest that promotions of national brands might be a good tool for fighting back store brands, but manufacturers need to design and target these promotions carefully in order to avoid head-to-head competition.     

Taming the Blame Game: Using Promotion Programs to Counter Product-Harm Crises

The present research examines how different kinds of promotion programs (i.e., price discount versus donation promotion) buffer brands from the ill effects of product-harm crises. Drawing on attribution theory, the authors investigate the differential effects of promotion programs on consumer responses following ambiguous product-harm crises. These effects are moderated by promotion depth (i.e., the monetary value of a promotion) and brand reputation. Results show that for low-depth promotions, donation is more effective than price discount when the product-harm crisis involves moderately reputable brands. Importantly, the authors identify blame attribution as the mediating mechanism accounting for the interaction effects. When the locus of causality is external to the focal brand, the interaction effects of promotion programs and brand reputation disappear.     

Retailers’ Price Positioning and the Motivational Profiling of Store‐Brand Shoppers: The Case of Spain

In recent years, retailers have worked to advance store‐brand strategies, leading to greater success and higher congruence with the retailer's positioning. In this new competitive context, this research aims to characterize store‐brand shoppers in terms of motivation and benefits sought, as well as analyze, on the basis of congruence theory, the moderating role of a retailer's price positioning on store‐brand shopper characterizations. The empirical study combines survey and household panel information related to leading retailers in Spain; the findings reveal that store‐brand shoppers are motivated by their price sensitivity, whereas they are less sensitive to service quality and name brands. However, the retailer's price positioning exerts a moderating effect on shopper profiles: In less price‐oriented retail chains, store‐brand purchases seem motivated less by price and more by quality, brand awareness, and brand reputation.     

The perception of discount sales promotions – A utilitarian and hedonic perspective

This paper explores the effects of utilitarian and hedonic benefits perceptions of discount sales promotions on consumer purchase decisions (attitude and behavioral intention). A closed-ended survey, as well as a partial least squares structural equation modeling of consumers sampling who had used discount sales promotions in their recent purchases, was utilized in this study. The findings suggest that utilitarian benefits perceptions derived from price-quality perception and hedonic benefits perceptions derived from smart shopper self-perception of using discount sales promotions positively affect consumer purchase decisions. Both utilitarian and hedonic benefits perceptions of discount sales promotions can henceforth be used to produce the desired effects on purchase decisions. Hence, this paper sheds light on the effects of utilitarian and hedonic benefits perception of discount sales promotions on purchase decisions. Though the findings are limited to discount sales promotions alone and two types of purchase decisions outcomes (attitude and behavioral intentions), this paper identified multiple avenues to extend its findings. This encourages further exploration of such promotion topics, particularly on the various perceptions of discount sales promotions as well as other sales promotion techniques among marketing academics and practitioners.     

The morals of moral hazard: a contracts approach

Although moral hazard is a well‐known economic concept, there is a long‐standing controversy over its moral implications. The language economists use to describe moral hazard is often value‐laden, and implies moral judgments about the persons or actions of economic agents. This in turn leads some to question whether it is actually a scientific concept, or simply a convenient tool for criticizing certain public policies. At present, there is no consensus about the moral meaning of moral hazard, or about whether the concept can be salvaged by economists. As a first step toward resolving this problem, I suggest a contracts approach to moral hazard. I use the ‘title‐transfer’ theory of contract to clarify the moral content of moral hazard, thereby increasing its value to scholars in numerous disciplines. A contracts view is useful for economic policy discussions because it does not include hidden value judgments. At the same time, however, it is also valuable for ethicists because it directly explains a moral dimension of behavior under moral hazard, namely, the violation of property rights.     

Rethinking Worldly Possessions: The Relationship between Materialism and Body Appearance for Female Consumers in an Emerging Economy

This article investigates how women in an emerging economy relate the importance of material possessions to the importance they assign to the appearance of their body. The results of two studies demonstrate a very strong and positive relationship between materialism and several measures of body appearance. Study 1 shows strong correlations between materialism and body appearance in a sample of relatively young (m = 18.7 years) and affluent female students from a private university. Using structural equation modeling, Study 2 finds that in a sample of women averaging 40 years, more materialistic women did focus substantially more on body appearance than less materialistic women. Further, antecedents (self‐esteem, hedonic attitudes toward advertising, and skepticism toward advertising) and consequences (satisfaction with life) of materialism and body appearance were included in the model. In interpreting the results, it is assumed that individuals prone to materialism apply similar appearance‐centered mental schemata to their body as they do to material possessions.     

The reluctant Hong Kong consumer: purchasing travel online

Hong Kong consumers have embraced the web but appear reluctant to buy airline tickets online, suggesting that perceptions of risk outweigh perceived convenience. In this study we identify that both risk and convenience factors are associated strongly with willingness to purchase, particularly privacy, security and poor customer service, time savings, site usability and information provision. We identify further that the experienced shopper is only moderately satisfied and that satisfaction appears to be associated strongly with willingness to make further purchases. Overall, findings suggest that although consumers recognize a number of benefits, there is deep‐rooted resistance to buying this particular product online. The explanation may lie in a combination of the physical density of the Hong Kong market, love of the whole shopping experience and a desire to minimize risk. We conclude that to tempt consumers online airlines and agents must target the Hong Kong market with a clear value proposition which includes user‐friendly sites, streamlined payment procedures, on‐ and offline customer support, price‐related promotions and tailored offline services which reinforce online offerings.     

Materialism as an attempt to cope with uncertainty

Three studies tested the hypothesis that people may turn to materialism when they face uncertainties in modern life. Study 1 showed that anomie and self‐doubt are significant predictors of materialistic orientations; other plausible antecedents have less predictive value. In Study 2, participants experiencing chronic self‐doubt showed a higher level of materialism if they were primed to experience doubt and insecurity. In Study 3, participants with chronic perceptions of anomie showed a higher level of materialism if they were primed with the concept of normlessness. Together, these three studies show that some people turn to materialism when they experience uncertainty within the self (self‐doubt) or perceive uncertainty relating to society (anomie). © 2002 Wiley Periodicals, Inc.     

The etiology of the frugal consumer

This study examines several psychological factors hypothesized as antecedents of frugality. Although external forces, such as downturns in economic activity, can promote frugal behavior, it is also likely associated with a syndrome of individual differences that are independent of economic conditions. These include values, personality characteristics, and other consumer characteristics. Our study used data from 256 U.S. consumers to test hypothesized relationships between frugality measured as a personality- or lifestyle-type construct characteristic embedded in the social psychology of consumption. We identified four key constructs as likely antecedents of frugality: materialism, status consumption, brand engagement, and consumer independence. The results showed that frugal consumers are less materialistic, less status conscious, and less involved with brands than other consumers, but are more independent from the opinions of others in their consumer decision making.     

Encouraging Consumer Charitable Behavior: The Impact of Charitable Motivations,Gratitude, and Materialism

The United States is one of the most charitable nations, yet comprises some of the most materialistic citizens in the world. Interestingly, little is known about how the consumer trait of materialism, as well as the opposing moral trait of gratitude, influences charitable giving. We address this gap in the literature by theorizing and empirically testing that the effects of these consumer traits on charitable behavior can be explained by diverse motivations. We discuss the theoretical implications, along with implications for charitable organizations, and offer suggestions for future research.     

A Model of motivated cognition to account for the link between self‐monitoring and materialism

Drawing on previous theorizing about the development of materialistic values, a model of motivated cognition is proposed to account for the positive association between self‐monitoring and materialism. The model suggests that self‐monitoring is associated with individual differences in belonging motivation, that belonging motivation shapes people's beliefs about buying as a means of belonging within valued groups, and that buying‐is‐for‐belonging beliefs shape the degree to which people value wealth and luxury. Results from two studies supported this model and suggested that the self‐monitoring results are not better attributed to extraversion, social self‐confidence, or shyness. The proposed model emphasizes that traits associated with a strong need to belong may predispose people toward materialism. © 2007 Wiley Periodicals, Inc.     

An information processing review of the subjective value of money and prices

This article draws on current and classical psychological theories of consumer behavior to review current findings in the psychology and economics literature on the subjective value of money, using an information processing framework. Consumers subjectively value both prices and money. That is, consumers value an identical economic value as a price or as a sum of money differently depending on their individual characteristics, price presentation characteristics, monetary form characteristics, and the consumer context due to subjectivity in their: Perception (biases in assessing the subjective value of money and prices); Inferences (whether consumers use price information to make other judgments); affect (the feelings and emotions associated with spending and saving); memory (errors and biases in recall of money and prices); and information integration (the manner in which consumers integrate costs and benefits to make decisions of whether, when, how much, and what to spend on).     

Understanding Credit Card Use Among Indian Consumers: Role of Materialistic Values and Compulsivity

The current research examines influence of materialism and compulsive-buying behavior on Indian consumers’ credit card use. Research in Western countries posits that materialistic values and compulsiveness influence credit card use. However, results of the research differ from earlier researches. It suggests that Indian consumers’ credit card use is influenced by materialism but not by compulsiveness. Credit cards may be acquired to represent a lifestyle and improve individual’s status. The symbolic value associated with credit card is higher than its functional attributes. Consumers associate it with material possessions that bequeath status to them.     

The Effects of Cause-Related Marketing Appeals on Consumer Purchase and Donation Behavior

Donors to the U.S. Special Olympics were surveyed to determine which buyer considerations in a cause-related market- ing scenario (product, cause and/or price) are most important. Donors are most likely to participate in a CRM promotion for a brand they regularly use, for a cause they are familiar with, and when the CRM brand costs the same or less than the competing brands. In general, younger, more educated adults and women were more likely to participate in CRM promotions. Organizations may be more suc- cessful with CRM programs aimed at these demographic segments.     

Assessing the Impact of Price Promotions on Consumer Response to Online Stockouts

The recent growth of e‐commerce technologies has disrupted the traditional retail environment, leading to more consumers shopping online. While the manner in which consumers shop is changing rapidly, our understanding of how changing consumer behaviors affect retail supply chain management is lacking. In particular, our understanding of how consumers react to stockouts in an online shopping environment remains unclear. Making the challenge even more difficult is the fact that price promotions are heavily used to attract consumers in an online retail environment where consumer switching costs are low. This research develops a theoretical framework, based on expectation‐disconfirmation theory, to explain the effect of price promotions on consumer expectations of product availability and their reactions to stockouts in an online retail environment. Surprisingly, our findings suggest that consumers are actually less dissatisfied with a stockout of a price promoted item than a nonprice promoted product and are less likely to switch to another retailer's website. These findings may suggest that price promotions actually create a type of switching cost in the online retail environment, leading to interesting implications for researchers and supply chain managers.     

How do price range shoppers differ from reference price point shoppers?

Existing research demonstrates that reference price models can explain a significant amount of the variation in customers' price perceptions and purchase behaviors. This study extends the reference price literature by introducing the price range model, which proposes that price judgments are based on a comparison of the market price to the entire range of currently available prices. Our results demonstrate that the fit of a structural heterogeneity finite mixture model improves when the price range model is included along with internal and external reference price models and that the price range model explains a substantial proportion of customers' purchase histories in the toilet tissue category. Profile analysis indicates that internal reference price shoppers switch brands much less frequently than the other two segments and respond to feature promotions for their preferred brand(s). External reference price shoppers have an intermediate level of brand preference and respond significantly less than the other two segments to feature and display promotions. Price range shoppers have the lowest brand loyalty and respond most strongly to both feature and display promotions.     

Consumers' perceptions of promotional framing of price

This article focuses on consumer perceptions of transaction value when presented with deals that are equivalent on a unit‐cost basis but worded differently. Through an experimental design setting, it examines the effect of three such frames: one, stated in terms of a straight price promotion (“50% off”), the second, as an extra‐product or volume promotion (“buy one, get one free”), and a third as a “mixed” promotion (“buy two, get 50% off”). Four typical supermarket categories are considered which permit the investigation of the effect of two category‐based moderating factors: stock‐up characteristic and price level. Results show that the nature of framing appears to differentially affect consumer perceptions of value from “equivalent” deals. Also, perceptions of deal value from price versus extra‐product promotions are moderated by the stock‐up characteristic of the category. However, consumers' internal reference prices remain unaffected across one‐time price and extra‐product promotions. These findings provide some understanding of the role of deal framing on consumers' responses, and offer implications for industry practitioners interested in communicating the maximum value in their deals. © 2000 John Wiley & Sons, Inc.     

Discovering the variables that influence new home‐buyer service satisfaction

While home builders traditionally think of customer service in terms of upgrades and mortgage options, home buyers are thought to view the quality of service on a much broader basis. Previous research has identified five dimensions of service quality: appearance, reliability, timeliness, knowledge, and empathy. Home‐buyer satisfaction with service quality is then the result of home builders providing services that are perceived as meeting or exceeding buyer expectations. Although much research has been done regarding home‐buyer satisfaction with service quality, there is still a gap between builders' and home buyers' perception of the quality of service. Builders need to identify and understand home‐buyer needs in order to constantly improve service quality. This paper describes an exploratory study that focused on customer satisfaction with service quality. The objective of this study was to assess the correlations between various factors on home‐buyer expectations and their perceptions of service quality. Demographics considered in this study included age, gender and household income, while transaction characteristics included purchase price, number of occupants and house size. Characteristics such as higher income, higher purchase price, and larger house size appeared to value dimensions such as reliability most highly. Characteristics such as lower income, lower purchase price and smaller house size appeared to value dimensions such as empathy and appearance most highly. Gender, age and household size did not have significant associations with expectations or relative importance, but age and household size were associated with actual perceptions of service dimensions. Understanding the influence of these variables on customer satisfaction with service quality can positively impact home builders through improved reputation and increased local referrals.