Feel the Music! Exploring the Cross-modal Correspondence between Music and Haptic Perceptions of Softness

Haptic softness is a central product attribute for many fabric-related retailers. Can those retailers use music—an easy to implement in-store atmospheric cue—to influence consumers’ perception of this central product attribute? Across four studies, this research shows that high (vs. low) music softness enhances consumers’ haptic softness perceptions. We argue that this cross-modal effect occurs owing to a transfer of softness-related associations from the auditory to the haptic modality. To better inform retail practice, we examine three managerially relevant boundary conditions at the product and store levels. Specifically, high music softness increases haptic softness perceptions when (a) the product's haptic quality allows for the sufficient detection of softness, (b) hard flooring is present in the retail environment, and (c) consumers are unaware of music's influence. In terms of practically relevant consequences, we find that enhanced haptic softness perceptions ultimately result in more positive product evaluations like willingness to pay.     

Payment formats and hedonic consumption

Payment formats have many important influences on consumer behavior. However, few studies have examined how the payment format affects hedonic consumption. This study explores how the transparency of the payment format (e.g., bonus points vs. cash) influences consumers’ willingness to pay, budget assignments, and consumption choices through differences in their perceived pain of purchasing (exchanging) hedonic and utilitarian options. Specifically, consumers who pay with highly transparent payment formats (e.g., cash), compared with consumers who pay with less transparent payment formats (e.g., store points, bonus points, and gift certificates), are willing to pay less, assign a lower budget, and are less likely to choose hedonic products. The perceived pain of purchasing (exchanging) a hedonic product plays an important mediating role on the influence of the payment format on hedonic consumption. However, the perceived pain of purchasing (exchanging) a utilitarian option plays a parallel mediating role only when people have paid for the less transparent payment format (e.g., buying store points) rather than when they accumulate the points through previous consumption events. The research findings provide insights that can benefit both theory and practice.     

Where to refuel: Modeling on-the-way choice of convenience outlet

For many goods consumers do not make a special trip to a store. Especially for a convenience good such as fuel they will buy the product while on-the-way to some final destination. This paper introduces on-the-way choice of retail outlet as a form of convenience shopping. It presents a model of on-the-way choice of retail outlet and applies the model in the context of fuel retailing to explore its implications for segmentation and spatial competition. The model allows analyzing how choice of retail outlet varies not only with spatio-temporal variables (distance, detour, local competition and agglomeration) but also with trip-related characteristics such as time of day and prior awareness of one's purchase need. The model is a latent class random utility choice model. An application to gas station choices observed in a medium-sized Asian city show the model to fit substantially better than existing models. The empirical results indicate consumers may adopt one of two decision strategies. When adopting an immediacy-oriented strategy they behave in accordance with the traditional gravity-based retail models and tend to choose the most spatially convenient outlet. When following a destination-oriented strategy they focus more on maintaining their overall trip efficiency and so will tend to visit outlets located closer to their main destination and are more susceptible to retail agglomeration effects. The paper demonstrates how the model can be used to inform segmentation and local competition analyses that account for variations in these strategies as well as variations in consumer type, origin and time of travel. Simulations of a duopoly setting further demonstrate the implications.     

Negativity bias in consumer price response to ethical information

The increasing debate on corporate ethics raises the question of whether consumers are willing to reward and punish corporate behaviour based on its ethicality. In this context, this article investigates the direct effect on consumers' willingness to pay. Price response to product‐related ethical information is explored in an experiment dealing with social issues in sportswear and environmental issues in consumer electronics. It is shown that in both areas, consumers demonstrate an increased willingness to pay for ethically produced goods. However, the response is subject to a negativity bias. In contrast to prior research that used abstract stimulus measures, a ratio for quantifying this bias is suggested based on consumers' willingness to pay and their price expectations. This measure allows us to analyse a consumer's individual bias.     

Consumers’ willingness to disclose their personal data in e-commerce: A reciprocity-based social exchange perspective

While personal data is invaluable to firms, the drivers of e-commerce customers' willingness to disclose their personal data remain tenuous. Using social exchange theory, we develop a model that explores the impact of consumers' perceived benefit, and relative power, on store trust, in turn driving their willingness to disclose their personal data. We collected our empirical data using a representative online survey, with the results being analyzed by using structural equation modeling. The results corroborate that (a) consumer-perceived e-commerce store trust drives their willingness to disclose their personal data, and (b) perceived e-commerce provider reciprocity outweighs consumers’ perceived data disclosure benefit, suggesting the existence of symbolic (vs. purely instrumental) social exchange.     

Overcoming data limitations for store choice modelling.: Exploiting retail chain choice data by means of aggregate logit models

This paper reports on research aimed at exploiting certain data sources for store choice modelling purposes. Many databases, such as some consumer panels, only record the firm chosen by consumers and not the specific store at which they shop. Four alternative approaches are proposed in order to use this raw information for studying patronage determinants at store level: (a) an ordinary logit model in which chain utility is averaged across stores within; (b) an ordinary logit model in which the choice set is assumed to be composed of the nearest store for each chain; (c) a straightforward application of an aggregate logit model; and (d) the application of an aggregate logit model with choice sets spatially bounded by a distance threshold representing the maximum distance that consumers are willing to travel for shopping. The models are empirically tested in the context of spatial choice behaviour. Goodness of fit indicators reveal that only models (b), (c) and (d) acceptably represent competitive interaction dynamics. As performance of (b) is slightly better than that of (c), it seems that a priori the ‘nearest store assumption’ is a better approach than the modelling of aggregate choice structures. However, when the latter approach is applied with more reliable choice sets, as suggested in model (d), the best performance is achieved. The results thus lead us to think that the aggregate logit model is a promising methodology for solving the problem at issue, but subject to an appropriate definition of the consumers’ choice sets. In fact, such an approach provides a more suitable modelling solution to the extent that the saturation and the intra-firm store heterogeneity become more intense, because these situations presumably imply that consideration sets include several stores from the same chain.     

When counterfeits raise the appeal of luxury brands

Counterfeiting is a widespread practice throughout the world. The conventional wisdom is that it affects branded goods negatively. In this paper, however, we suggest that counterfeiting may actually benefit certain luxury brands. By means of two studies, we show how the market presence of luxury counterfeit items can increase consumers’ willingness to pay for original brands. In Study 1, we show that the presence of luxury counterfeits can increase consumers’ willingness to pay for well-known original brands, but not for lesser-known ones. Brand awareness plays a moderating role in the positive relationship between counterfeiting and willingness to pay (WTP). In Study 2, we address the psychological mechanisms that explain this increased willingness to pay. The results show that consumers’ (a) pleasure at being envied, (b) pleasure in distinguishing themselves, and (c) perception of the quality of the original goods fully mediate the relation between the presence of counterfeit in the market and consumers’ WTP for originals. We subsequently discuss the theoretical and managerial implications of the two study results.     

The interaction effect of mobile phone screen and product orientation on perceived product size

Perceived product size is a key concern in online retail, particularly in fashion and grocery. The screen on which consumers view a product (e.g., desktop or mobile) might constitute a frame that biases size perception, on the basis of assimilation and contrast effects (pool and store theory). The rise of mobile commerce exacerbates this issue, as framing effects might be stronger versus desktop settings as screens are smaller. Further, as mobile phone's screen orientation varies situationally (vertical vs. horizontal), the perceived product size might vary, depending on the interaction of screen and product orientation. By introducing the framing ratio as a means to predict extent, dimensionality and symmetry of size biases, we generalize specific findings from extant research. Empirically, four experimental studies demonstrate that contextual frames (i.e., vertical vs. horizontal screens) and product orientation (e.g., jeans vs. shoes) interact to bias the size perception, in that sizes are overestimated on the dimension that approaches the frame (high framing ratio), compared with conditions where the frame is distant (low framing ratio). If product size is misperceived, willingness to pay might be affected (e.g., for groceries). Thus, size perceptions have a direct impact on managerially relevant variables.     

Attitude and Willingness to Pay for National and Store Brands of Milk in the South of Chile

ABSTRACT

In Chile the milk consumption has maintained between 124 and 134 Ls per capita since 1996. To determine the attitude and willingness to pay for national and store brands of fluid milk in the south of Chile, a survey of 400 people was conducted. A conjoint analysis determined that the consumers experienced a positive reaction toward two national brands (traditional and those emergent in the market) and expressed negative reaction to a store brand. The consumers were determined to pay lower prices in relation to the market value for the store brand and higher prices for national brands.     

Local and/or organic: a study on consumer preferences for organic food and food from different origins

This paper gives a deeper insight into consumer preferences for different food products of varying place of origin (i.e. local, Germany, neighboring country, non‐EU country) and production practices (i.e. organic vs. non‐organic). Consumer surveys combined with choice experiments were conducted with 641 consumers in eight German regions. Mixed logit models were estimated to draw conclusions on consumers’ preferences for different product attributes. The Stimulus‐Organism‐Response model was applied to theoretically frame the key findings. Results reveal that consumers prefer locally produced food to organic food. However, conclusions on consumers’ preferences should not be generalized as they vary depending on product type and consumers’ place of residence. When looking at the willingness‐to‐pay estimates for ‘organic’ and ‘local’ while distinguishing among consumers from different regions of Germany, results indicate that consumers living in rural areas and consumers living in the eastern part of Germany are less willing to pay a premium for organic products than urban consumers and consumers from other parts of Germany. As preferences for origin attributes and organic production vary between different food products and in different regions of Germany, market actors should design marketing activities accordingly. This study adds to the international research on consumers’ preferences for organic and/or local food. The results provide better insights into preference structures, as more than one product has been included and surveys were conducted in different regions across Germany.     

Consumer heterogeneity and online vs. offline retail spatial competition

This paper develops a game-theoretic spatial model featuring consumer heterogeneity in online vs. offline retailers’ spatial competition. We find that consumers’ browse-and-switch behavior intensifies the competition because both offline and online retailers’ price and profit decline when the behavior occurs, but it is not necessarily a threat to offline retailers especially when the product relates more closely to experience. We consider six equilibrium scenarios for different combinations of consumer behaviors when considering a hybrid retailer. The analysis taking consumer heterogeneity into consideration shows that the hybrid retailer operating both online and offline is not always the winner. Particularly, the business opportunity for the offline retailer lies in consumers’ willingness to pay in store, and whether the retailer launches an online store depends on the type of products and services provided.     

An exploratory study of environmental attitudes and the willingness to pay for environmental certification in Mexico

This paper explores how environmental attitudes of consumers in Mexico influence their willingness to pay a premium (or, marginal WTP) for environmentally-certified products. In addition, we also challenge the theoretical assumption that the relationship between environmental attitudes and purchasing is linear. We test our hypotheses with an analysis of marginal WTP based on a survey of 301 Mexican consumers. Using conjoint analysis to determine marginal WTP, we find support for the idea that as attitudes become more pro-environmental, they more than proportionally boost marginal WTP. We conclude our paper by discussing implications for research and practice that focus on environmental segments of consumers.     

Consequences of Value in Retail Markets

We suggest that merchandise value, affect and two types of loyalty are related in the retail domain. Based on ideas from cognitive psychology on the structure of value we suggest that merchandise value is directly related to repurchase loyalty but indirectly related to attitudinal loyalty via the construct of store affect. Additionally, our model proposes that attitudinal loyalty is related to willingness to pay a price premium while repurchase loyalty is not. We also control for the effects of store familiarity and convenience. We test our hypotheses in three studies and find that, in general, our model is well supported at the level of both individual consumers and stores. Additionally, we find that perceived retailer differentiation moderates the effect of merchandise value on store affect.     

Private-label branding and willingness to pay: evidence from an auction experiment

The competitive pricing of private-label brands is a strategy used to gain a competitive advantage. Notwithstanding the introduction of many private-label brands – i.e. private-label brands with a name identical to that of a firm (own-name brands) and private-label brands with a name distinctive from that of a firm (other-name brands) – that compete with national brands, identifying equitable prices that reflect brand value remains difficult. This study aims to determine the appropriate price of private-label brands by measuring consumers’ willingness to pay. An experimental auction method measures ‘actual’ willingness to pay in a non-hypothetical setting. The study was conducted in Thailand, which has the lowest price discrepancy between national brands and private-label brands. The results show that the willingness of consumers to pay for both types of private-label brands is higher than that for un-branded products. However, there is no significant difference in the premium between own-name and other-name private-label brands. Unlike leading and second tier national brands, consumers are willing to pay a discounted price for both own-name and other-name private-label brands; for the latter, they are willing to pay a more steeply discounted price. The finding of this study regarding the amount that consumers are willing to pay for an own-name private-label brand is consistent with the current market price strategy, whereas the current market price strategy for other-name private labels is inconsistent with the amount participants are willing to pay. The study shows that to appropriately price their products in a manner that yields the highest returns, retailers must determine how much consumers are willing to pay.     

In the mood to buy? Understanding the interplay of mood regulation and congruence in an international context

Literature reports different effects of mood on measures of consumer behavior. Either mood congruence or mood regulation theories serve to explain these effects, though the latter theory is perhaps more sophisticated. This research goes a step further: in a sequence of four studies, the authors consider different products (with and without mood-lifting capabilities) and consumers?? beliefs in the transience of their mood to illuminate the interplay between the two theoretical approaches. Culture (individualism vs. collectivism) emerges as an important driver of mood transience. Mood transience drives the likelihood of mood regulation through the consumption of products with mood-lifting capabilities. Willingness to pay serves as the dependent variable, in contrast with mood research that has focused almost entirely on nonmonetary forms of consumer behavior. Greater willingness to pay variance in bad moods, compared with good moods, offers evidence of the opposing effects of mood congruence and regulation.     

Willingness to Pay for Non‐biotech Foods in the U.S. and U.K.

This study uses closed‐ended and payment card formats to elicit willingness to pay for breakfast cereals made from non‐biotech ingredients. U.S. consumers were willing to pay a 10%∼12% premium to avoid biotech breakfast cereals, whereas U.K. consumers were willing to pay a 19%∼35% premium. Risk perceptions about agrobiotechnology proved to be an important factor shaping willingness to pay a premium for non‐biotech breakfast cereals. If consumers perceived risks to human health or environments from the use of biotechnology in crop/food production, or affiliated biotech foods unfavorably with morality or multinational corporations, they were more likely to pay a premium. Conversely, if consumers associated agrobiotechnology with various benefits (i.e., reduction in chemical use in crop production, mitigation of world food shortages, and improved nutritional content), they were less likely to pay a premium.     

The existence and persistence of the pay-per-use bias in car sharing services

A key benefit of using car sharing services (relative to car ownership) is that they are more cost effective. Car sharing firms offer a menu of pricing plans to make this happen. The two most common plans are flat-rate and pay-per-use pricing. However, little is known about how consumers choose among these pricing plans. In this study, we analyze consumers' choices between pay-per-use and flat-rate pricing using data from a car sharing provider in a large European city. In contrast to previous research, we find a prevalent and time-persistent pay-per-use bias. Specifically, depending on the definition of the bias, 21% to 32% of customers exhibit this bias. This bias also persists over time within customer. We propose three potential explanations for the existence and persistence of this bias. First, we suggest that customers underestimate their usage. Second, we propose that customers have a preference for flexibility, leading them to pay more. Finally, we show that the physical context, such as weather, increases the likelihood of a pay-per-use bias. Our findings suggest that more research into consumer response to pricing in the Sharing Economy is needed.     

French consumers' perceptions of the unattended delivery model for e-grocery retailing

A survey of 245 French e-grocery customers reveals their views on the unattended delivery model, including statistically significant differences across age groups but not between genders in terms of interest in unattended grocery delivery and intentions to buy groceries online. Some customer groups expect to adopt e-grocery if home delivery becomes possible, but their willingness to pay for delivery is low. Moreover, the analysis reveals that willingness to pay is not related to distance from the store, shopping duration, or shopping pleasure, such that could help grocers cover the costs. Thus French grocers will have difficulty moving to a complete e-commerce model.     

Which consumers are willing to pay for smart car healthcare services? A discrete choice experiment approach

The technology adoption lifecycle model categorizes consumer groups in the new concept products and services market, based on different characteristics and needs, into innovators, early adopters, early majority, late majority, and laggards, in order of adopting new products and services. This study aims to estimate heterogeneous consumer preferences and willingness to pay for a new concept convergence service, the smart car healthcare service, using a choice experiment questionnaire and a hierarchical Bayesian mixed logit. We found that consumers were willing to pay an additional 3000 to 6000 KRW/month (2.65–5.29 USD/month) for a service that measured both physical movement and vital signs compared to either the former or the latter. It was also found that they were willing to pay about 3000 KRW/month (2.65 USD/month) more for a service that provides health condition predictions compared to one that provides only the current health condition. In addition, customers who were young, innovative, and favored the utility of healthcare services showed a lower sensitivity to service fees than those who were not. Thus, they were found to have a greater willingness to pay for advanced smart car healthcare services.     

Does the Product Really Matter? A Look at Mainstream Pro-Environmental Consumption Behavior

The overall objective of this article is to determine if the product matters in determining willingness to pay for pro-environmental products compared to non-pro-environmental products through experimental design. Ultimately, this research aims to use a posteriori or behavioral segmentation approach to cluster consumers using the price collected through a controlled auction experiment they would actually pay to purchase a pro-environmental product as opposed to a non-pro-environmental product, as well as profiling each segment according to (a) perceived product benefits; (b) values; (c) perceived consequences of purchase behavior; and (d) demographics based on self-reported survey data.