Sell Me
Product Lineups: The More You Search, The Less You Find
Sang Kyu Park & Aner Sela
Journal of Consumer Research, forthcoming
Abstract:
Consumers often try to visually identify a previously encountered product among a sequence of similar items, guided only by their memory and a few general search terms. What determines their success at correctly identifying the target product in such “product lineups”? The current research finds that the longer consumers search sequentially, the more conservative and – ironically –inaccurate judges they become. Consequently, the more consumers search, the more likely they are to erroneously reject the correct target when it finally appears in the lineup. This happens because each time consumers evaluate a similar item in the lineup, and determine that it is not the option for which they have been looking, they draw an implicit inference that the correct target should feel more familiar than the similar items rejected up to that point. This causes the subjective feeling of familiarity consumers expect to experience with the true target to progressively escalate, making them more conservative but also less accurate judges. The findings have practical implications for consumers and marketers, and make theoretical contributions to research on inference-making, product recognition.
Inaction Traps in Consumer Response to Product Malfunctions
Neil Brigden & Gerald Häubl
Journal of Marketing Research, forthcoming
Abstract:
The authors develop and test a theory of consumer inaction traps in the domain of decisions to either address or endure product malfunctions. According to this theory, the magnitude of product malfunctions can have a paradoxical effect on consumption experience. In particular, the less severe a product malfunction is, the more inclined consumers are to defer the initial decision about whether to take corrective action. Subsequent opportunities for corrective action are devalued relative to previously forgone ones. This dynamic tends to trap consumers in a state of inaction, resulting in their enduring smaller malfunctions longer than larger ones. A consequence of these inaction traps is that minor product malfunctions may result in less enjoyable overall consumption experiences than more severe defects. Evidence from eight experiments and a survey provides support for this theorizing by demonstrating the inaction-trap phenomenon, examining its downstream consequences, shedding light on the psychological dynamics of inaction, and identifying boundary conditions that suggest interventions for counteracting consumers’ vulnerability to suffering disproportionately from relatively minor product malfunctions.
Salience theory of mere exposure: Relative exposure increases liking, extremity, and emotional intensity
Kellen Mrkva & Leaf Van Boven
Journal of Personality and Social Psychology, forthcoming
Abstract:
We propose and support a salience explanation of exposure effects. We suggest that repeated exposure to stimuli influences evaluations by increasing salience, the relative quality of standing out from other competing stimuli. In Experiments 1 and 2, we manipulated exposure, presenting some stimuli 9 times and other stimuli 3 times, 1 time, or 0 times, as in previous mere exposure research. Exposure increased liking, replicating previous research (Zajonc, 1968), and increased salience, made evaluations more extreme, and made stimuli more emotionally intense. Across experiments, results of multiple mediation models and a causal chain of experiments supported the idea that salience explains these exposure effects. Fluency and apprehension, 2 constructs that have been invoked to explain mere exposure, accounted for less of these effects according to the mediation models and the chain of experiments. We next manipulated relative exposure and absolute exposure orthogonally, finding that relative exposure increases liking more than absolute exposure. Stimuli presented 9 times were liked more when other stimuli in the context were presented less than 9 times than when the other stimuli were presented more than 9 times (Experiment 4). Whereas absolute exposure had no significant effect in Experiment 4, relative exposure increased liking, extremity, and emotional intensity. In Experiment 5, a direct manipulation of salience increased liking, evaluative extremity, and emotional intensity. These results suggest that salience partially explains effects previously attributed to absolute “mere” exposure.
The Future Ambiguity Effect: How Narrow Payoff Ranges Increase Future Payoff Appeal
Yuanyuan Liu, Timothy Heath & Ayse Onculer
Management Science, forthcoming
Abstract:
Increasing a current payoff’s ambiguity from a precise value (e.g., $150) to a range (e.g., $140–$160) generally reduces the payoff’s appeal, as does delaying the payoff from, for example, now to one year from now. However, we report five studies in which adding small ranges to future payoffs increases future payoff appeal, an emergent property designated the future ambiguity effect. This effect generalizes across various choice sets, payoff levels, and delays, and it prevails even when a future smaller ambiguous payoff is preferred more than a future larger precise payoff. Two underlying processes are proposed and supported: (1) the payoff ambiguity’s explicit risk of receiving a smaller payoff distracts people from the future’s larger implicit risk of receiving nothing, and (2) payoff ambiguity restores some of the excitement lost to the future’s psychological distance. Nonetheless, the future ambiguity effect is not universal, given that larger ranges can reduce and even eliminate it (boundary condition).
Product Entitativity: How the Presence of Product Replicates Increases Perceived and Actual Product Efficacy
Noah VanBergen, Caglar Irmak & Julio Sevilla
Journal of Consumer Research, forthcoming
Abstract:
Many studies document the benefits of presenting smaller quantities of products, particularly when differences in quantity relate to availability or popularity. However, we know less about the effects of quantity differences in contexts unrelated to scarcity, such as when products are depicted in ads, special displays, or online retailing settings. The present research builds on extant literature by investigating a previously unexplored question: How do product perceptions differ depending on whether consumers view a single unit in isolation, versus as one unit among identical product replicates? Five experiments demonstrate that presenting multiple product replicates as a group (vs. presenting a single item) increases product efficacy perceptions because it leads consumers to perceive products as more homogeneous and unified around a shared goal. That is, consumers perceive greater product entitativity when viewing a group of product replicates. As a result, the perceived and actual ability of products to deliver that function (i.e., product efficacy) increase.
Consumer Reactions to Drip Pricing
Shelle Santana, Steven Dallas & Vicki Morwitz
Marketing Science, forthcoming
Abstract:
This research examines how drip pricing — a strategy whereby a firm advertises only part of a product’s price up front and then reveals additional mandatory or optional fees/surcharges as the consumer proceeds through the buying process — affects consumer choice and satisfaction. Across six studies, we find that when optional surcharges are dripped (versus revealed up front) consumers are more likely to initially select a lower base priced option which, after surcharges are included, is often more expensive than the alternative. Moreover, consumers exposed to drip pricing tend to ultimately select this lower base price but higher total price option, even after being exposed to the total price and given the opportunity to change their selection and even though they are relatively dissatisfied with it. We explore why drip pricing has these effects and find that they are driven by consumers’ perceptions regarding the costs and benefits of starting over and switching. Specifically, we find that high perceived search costs (study 2), self-justification (study 3), and mistaken perceptions regarding the potential gains of switching because of inaccurate beliefs that all firms charge similar additional fees/surcharges (study 4) all play roles. We discuss the implications of these findings for marketers, consumers, and policy makers.
Quantum Prices
Diego Aparicio & Roberto Rigobon
NBER Working Paper, January 2020
Abstract:
This paper studies pricing in the fashion retail industry. Online data was collected for approximately 350,000 distinct products from over 65 retailers in the U.S. and the U.K. We present evidence that a fair fraction of retailers implement an extreme form of price stickiness that we describe as quantum prices: a large number of different products are priced using just a small number of sparse prices, with price changes occurring rarely and in large increments. Normalized price clustering measures are used to show that retailers use quantum prices within- and across- categories, and this clustering is not explained by popular prices, ranges of prices, assortment size, or digit endings. This pricing strategy is consistent with a behavioral model where fewer prices makes price advertising more effective. An implication of this model is that advertising is increasingly effective when the same prices are used across product lines, i.e. for new products. Finally, quantum prices affect product introductions and price adjustment strategies at the firm level, while it creates larger deviations of the law of one price and hinders the computation of inflation at the macro level.
Too close to call: Spatial distance between options influences choice difficulty
Iris Schneider et al.
Journal of Experimental Social Psychology, forthcoming
Abstract:
In language, people often refer to decision difficulty in terms of spatial distance. Specifically, decision-difficulty is expressed as proximity, for instance when people say that a decision was “too close to call”. Although these expressions are metaphorical, we argue, in line with research on conceptual metaphor theory, that they reflect how people think about difficult decisions. Thus, here we examine whether close spatial distance can actually make decision-making harder. In six experiments (total N = 672), participants chose between two choice options presented either close together or far apart. As predicted, close (rather than far) choice options led to more difficulty, both in self-report (Experiment 1A–1C) and behavioral measures (decision-time, Experiment 2 and 3). Identifying a boundary condition, we show that close choice options lead to more difficulty only for within-category choices (Experiment 3). The too-close-to-call effect is theoretically and methodologically relevant for a broad array of research where choice options are visually presented, ranging from social cognition, judgment and decision-making to more applied settings in consumer psychology and marketing.
Rankings of Online Travel Agents, Channel Pricing, and Consumer Protection
Matthias Hunold, Reinhold Kesler & Ulrich Laitenberger
Marketing Science, forthcoming
Abstract:
We investigate whether online travel agents (OTAs) assign hotels worse positions in their search results if these set lower hotel prices at other OTAs or on their own websites. We formally characterize how an OTA can use such a strategy to reduce price differentiation across distribution channels. Our empirical analysis shows that the position of a hotel in the search results of OTAs is better when the prices charged by the hotel on other channels are higher. This is consistent with the hypothesis that OTAs alter their search results to discipline hotels for aggressive prices on competing channels, thereby reducing the search quality for consumers.
Improvised Marketing Interventions in Social Media
Abhishek Borah et al.
Journal of Marketing, forthcoming
Abstract:
Online virality has attracted the attention of academics and marketers who want to identify the characteristics of online content that promote sharing. This article adds to this body of research by examining the phenomenon of improvised marketing interventions (IMIs) — social media actions that are composed and executed in real time proximal to an external event. Using the concept of quick wit, and theorizing that the effect of IMIs is furthered by humor and timeliness or unanticipation, the authors find evidence of these effects on both virality and firm value across five multimethod studies, including quasiexperiments, experiments, and archival data analysis. These findings point to the potential of IMIs in social media and to the features that firms should proactively focus on managing in order to reap the observed online sharing and firm value benefits.