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1 – 10 of 296
Article
Publication date: 11 May 2015

Alan M Collins, James Martin Cronin, Steve Burt and Richard J. George

This paper aims to investigate the role of store brands as a time- and money-saving heuristic in the context of an omnipresent store brand hierarchy. Drawing on the work of…

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Abstract

Purpose

This paper aims to investigate the role of store brands as a time- and money-saving heuristic in the context of an omnipresent store brand hierarchy. Drawing on the work of Tversky and Kahneman (1982), it proposes that the store brand hierarchy is characterised by many of the traits of frequently used heuristics employed by grocery shoppers.

Design/methodology/approach

Based on Chaiken’s (1980) model of information processing and Stigler’s (1961) perspective on the economics of information search, the study deductively establishes a model of store brand proneness to reveal the role of store brands as time- and money-saving heuristic. The model is tested on a sample of 535 US households using structural equation modelling and subsequent multigroup analysis based on two subsamples of households experiencing high financial pressure but who differ in terms of time pressure.

Findings

The findings provide strong support for store brands as a time- and money-saving heuristic and as a substitute for price search among households experiencing financial and time pressures.

Research limitations/implications

The main limitation is that the study is based on a sample of households located in one region of the US market.

Practical implications

Retailers need to be aware that any extension of the store brand portfolio beyond the traditional multi-tiered price/quality hierarchy risks undermining what has emerged to be a valuable heuristic used by certain shoppers.

Originality/value

This study extends our understanding of the role of store brands in the marketplace by going beyond their conceptualisation as a competitive device used by retailers to instead position them as a decision-making tool used by consumers. It also deepens our understanding of the boundary between rational search activities and the transition to the use of frequently flawed heuristics within the shopping process.

Details

European Journal of Marketing, vol. 49 no. 5/6
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 7 March 2016

David Priilaid and Daniel Hall

– The purpose of this paper is to explore the manner in which the rate of product consumption contributes to the formation and strengthening of the price-quality heuristic.

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Abstract

Purpose

The purpose of this paper is to explore the manner in which the rate of product consumption contributes to the formation and strengthening of the price-quality heuristic.

Design/methodology/approach

The research included a literature review with a series of tests across a sequence of blind and sighted tasting experiments involving 278 subjects assessing seven differently priced products of orange juice, coffee and wine.

Findings

The paper found evidence that consumption rates do affect the way consumers respond to price information and that sight-based “System 1” judgement errors accrue and increase progressively with consumption. This relationship was observed to be stronger in sight-based product assessments for consumption of four or more units per week compared to those consuming one unit per week. For blind-based product assessments, an inverse relationship between price affect and consumption was observed, with affect reported to be stronger for minimal rates of consumption.

Originality/value

The observation of sight-based and blind-based affect relationships which are dependent on the levels of product consumption appears to be an interesting advancement in consumer behaviour research. This provides support for a dual structure of rationality operated by an interconnection between “System 1” sight-based associations and “System 2” blind-based ponderous thinking. The paper further provides support for Kahneman’s “conflation of intuition” as classically conditioned memory.

Details

British Food Journal, vol. 118 no. 3
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 1 September 2003

Keith S. Coulter

Research evidence has demonstrated that consumers often may rely on non‐conscious, automatic processing of price information when choosing among brands. One way in which numerical…

Abstract

Research evidence has demonstrated that consumers often may rely on non‐conscious, automatic processing of price information when choosing among brands. One way in which numerical stimuli (and hence prices) may be non‐consciously and automatically represented in memory is in terms of magnitude representations. If prices are automatically mapped on to the same underlying magnitude code that sustains the processing of physical stimuli, then interference may ensue if the magnitude representation associated with a price differs from the magnitude representation associated with some other aspect of the brand. This study examines the effects of congruent/incongruent magnitude representation on how a price is perceived, and on the likelihood of purchase. Results indicate that a “congruent” magnitude representation may result in more favorable implicit price perceptions and increase the likelihood of choice.

Details

Journal of Product & Brand Management, vol. 12 no. 5
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 14 September 2012

Devon DelVecchio and Sanjay Puligadda

The purpose of this paper is to investigate whether the negative effect of lower prices on perceived brand quality that has been demonstrated in evaluation tasks arises in a brand…

4357

Abstract

Purpose

The purpose of this paper is to investigate whether the negative effect of lower prices on perceived brand quality that has been demonstrated in evaluation tasks arises in a brand choice context.

Design/methodology/approach

The effects of lower prices on perceived quality are assessed via two laboratory experiments in which college students participated.

Findings

A lower price is associated with lower perceived brand quality in Study 1's evaluation task environment. However, Study 2's results indicate a reversal of the negative effects of lower prices on perceived brand quality in an evaluation task to generally positive effects when the lower price is offered in the form of a discount in a choice task.

Practical implications

In addition to providing evidence that fears of the detrimental effects of lower prices may be overblown, the results also provide insight to managers of brands of different levels of quality on how to manage discounts to build, or at least to insulate, perceptions of the brand's quality.

Originality/value

The paper's findings may guide both managerial practice and future research on the effects of lower prices, particularly those in the form of a discount.

Details

Journal of Product & Brand Management, vol. 21 no. 6
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 4 June 2018

Joonheui Bae and Dong-Mo Koo

Most of the research on collaborative consumption platforms (CCPs) has focused on motivational drives, and little research has been conducted on the problem of unbalanced…

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Abstract

Purpose

Most of the research on collaborative consumption platforms (CCPs) has focused on motivational drives, and little research has been conducted on the problem of unbalanced information sharing, also known as the “lemons problem,” and signals. The paper aims to discuss these issues.

Design/methodology/approach

This study conducted a netnography and an experiment.

Findings

The netnographic study showed that participants tend to use low ratings and negative reviews as cues implying more searches, use ratings as an anchor to adjust other information, and employ differing cognitive information-processing styles. The experimental results show that, in a normal environment (when ratings are high), visualizers (verbalizers) have more of an intention to use CCPs when they are exposed to abundant pictures (textual cues); however, when the cues lead to a further information search (when the ratings are low), this search behavior pattern is reversed: visualizers (verbalizers) have more of an intention to use CCPs when they are exposed to abundant textual cues (pictures).

Research limitations/implications

This study extends previous research by showing that people frequently use differing heuristics depending on the context; that ratings have an anchoring effect and guide people in selecting a signal to use and condition how they use it; and that visualizers prefer text cues to pictorial cues when trying to make informed decisions under a condition that points to a further information search. These results are opposite of previous assertion.

Practical implications

Marketers are advised to provide a mechanism by which users can extract the cues they need and reduce the less urgent ones; devise a mechanism that screens participants and divides them into two categories: those who post honest evaluations and those who do not; and reduce the opportunistic behaviors of partners on both sides.

Originality/value

The current study addresses consumers’ use of information posted by other consumers on CCPs and demonstrates that participants use low ratings and negative reviews as cues implying more searches, use ratings as an anchor to adjust other information, and employ differing cognitive information-processing styles. Previous research rarely addressed these information search behaviors of consumers on CCPs.

Article
Publication date: 2 April 2015

Andreas Lemmerer and Klaus Menrad

The purpose of this paper is to demonstrate the heterogeneous effects of gains and losses on the perception of new products. It seeks to argue that the heterogeneity in these…

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Abstract

Purpose

The purpose of this paper is to demonstrate the heterogeneous effects of gains and losses on the perception of new products. It seeks to argue that the heterogeneity in these effects (partly) stems from the price-perceived quality relationship which is more important for quality-seeking customers.

Design/methodology/approach

A multilevel logit model was applied to household panel data on purchases of new yoghurt and sausage products in Germany. The multilevel model allowed to estimate heterogeneous price effects and accounted for the nested structure in panel data.

Findings

Significant variation in the effects of gains, losses, and promotions were found. Internal reference prices (IRPs), which served as indicator of loss-averse vs quality-seeking customers, were found to moderate these effects. Monetary losses have less negative effects for customers with high IRPs. Negative interaction effects of IRPs with monetary gains and promotions indicate that quality-seeking customers are less attracted by gains and promotions.

Practical implications

The heterogeneity in the price effects confirms the strategic importance of new product prices to influence customers’ perception of value. The price-quality relationship is an explanatory approach for heterogeneous price effects and should not be neglected in price setting. The inclusion of customer-specific reference price information yields deeper insights into customers’ use of prices to evaluate new products.

Originality/value

This study is the first to estimate asymmetric gain and loss effects in the analysis of new product trial. A customer-specific view in price setting is emphasized by taking customer-specific reference prices into account.

Details

British Food Journal, vol. 117 no. 4
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 1 June 2005

Bruce A. Huhmann and Nalinaksha Bhattacharyya

Finance theory proposes that consumers require information about the risk‐return trade‐off credibility information to relieve principal‐agent conflict concerns, and transaction…

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Abstract

Purpose

Finance theory proposes that consumers require information about the risk‐return trade‐off credibility information to relieve principal‐agent conflict concerns, and transaction cost information – for investment decisions. This paper aims to investigate whether or not such information is present in advertisements for one investment vehicle – mutual funds.

Design/methodology/approach

All advertisements in Barron's and Money over two years were content‐analysed to determine the degree to which mutual fund advertising practice adheres to theories regarding information necessary for optimal investment decisions. Use of techniques known to influence advertisement noting (i.e. advertisement size and colour) and copy readership (i.e. visual size, text length, unique selling proposition/brand‐differentiating message, celebrity endorsements, direct or indirect comparisons with competitors, and emotional appeals) was also investigated. Finally, because mutual funds are a financial service, the presence of convenience information (e.g. investment minima, access to agents or account information, and liquidity) was studied.

Findings

Mutual fund advertisements are not providing the information necessary for optimal investment decisions. Mutual funds use techniques known to increase the likelihood that their advertisements are noticed, but they also use techniques known to decrease the readership of their advertisements. Also, they rarely included convenience information.

Research limitations/implications

Mutual fund advertisements attempt the activation of the advertised brand‐quality and the long copy‐quality heuristic. However, future research must determine whether or not consumers are applying these two heuristics on seeing mutual fund advertisements.

Originality/value

Mutual fund advertising is not serving consumers. Regulators should require all mutual fund advertisements to include an easy‐to‐read table summarizing necessary investment information to assist consumer decision making.

Details

International Journal of Bank Marketing, vol. 23 no. 4
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 1 June 2002

Rajneesh Suri, Rajesh V. Manchanda and Chiranjeev S. Kohli

Price is an important variable because it has a direct impact on a company’s profitability. However, there is limited evidence to support the effectiveness of competing strategies…

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Abstract

Price is an important variable because it has a direct impact on a company’s profitability. However, there is limited evidence to support the effectiveness of competing strategies of fixed pricing and discounted pricing. As a result, both strategies are practised extensively in the industry. This paper draws on theories on affect, information processing, and pricing to provide a conceptual framework. The aim is to examine the effect of fixed pricing and discounted pricing on consumers’ affect and evaluation of products. Results from an experiment indicate that a fixed price format elicits more positively valenced thoughts and stronger positive affect than a discounted price format. This affective response, in turn, results in a less thorough processing of price information and, consequently, higher perceptions of quality and value for the fixed price format. Managerial implications of these findings are discussed.

Details

Journal of Product & Brand Management, vol. 11 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 June 2000

Rajneesh Suri, Rajesh V. Manchanda and Chiranjeev S. Kohli

While fixed price offers are quite common in the marketplace, there is limited empirical evidence that documents the effectiveness of these offers in comparison to price…

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Abstract

While fixed price offers are quite common in the marketplace, there is limited empirical evidence that documents the effectiveness of these offers in comparison to price discounting tactics. Drawing on information processing theory we provide a conceptual framework that explains the differential impact of fixed price and price discounting tactics. The empirical study shows that consumers’ perceptions of quality and value for the product were higher when price information was presented in a fixed format (versus a discount). Furthermore, perceptions of sacrifice were higher in the discount format than the fixed price format. Overall, this study finds empirical support for the notion that fixed price formats may be more effective than price discounts.

Details

Journal of Product & Brand Management, vol. 9 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 27 October 2020

Claudio Aqueveque and Pablo Rodrigo

The purpose is to evaluate the effect of positive and negative traditional word-of-mouth (PWOM and NWOM) on price-based quality perceptions of middle-range wine (price comprised…

Abstract

Purpose

The purpose is to evaluate the effect of positive and negative traditional word-of-mouth (PWOM and NWOM) on price-based quality perceptions of middle-range wine (price comprised between US$4 and US$12), considering the moderator role of type of relationship between source and receiver –in terms of the strength-of-tie – and the wine expertise of the source.

Design/methodology/approach

A between-subjects experimental design was employed to test the hypotheses. The dependent variable, perceived quality, was analysed using analysis of variance (ANOVA) and independent samples t-tests.

Findings

(1) WOM significantly affects price-based wine quality perceptions only when the source is perceived as expert, and independently on the type of relationship between source and receiver. (2) WOM has no “additive effect” on price-based quality perceptions for all but one condition (PWOM about high-priced wine from a close and expert source). (3) WOM results more useful than price to assess quality mainly in “contradictory” situations.

Research limitations/implications

The main limitation is related to the fact that is an experiment, specifically the manipulation of strength-of-tie and source expertise. Although manipulation checks show good results for the procedure, future research should try to design better ways to manipulate these variables, or different procedures to capture similar data.

Practical implications

Managerial efforts aimed to the encouragement of PWOM will be more efficient in markets with a high proportion of experts. Also, the marketing strategy of stimulating PWOM would be more effective for wines in the low-price category.

Originality/value

This study contributes to understand the impact of WOM on wine quality perceptions by examining if WOM affects priors price-based quality perceptions. In particular, we determine if price-based quality perceptions are able to be modified by PWOM and NWOM, a “competing” approach that is novel within the wine literature in which price is usually the most used cue to elaborate quality perceptions.

Details

British Food Journal, vol. 123 no. 3
Type: Research Article
ISSN: 0007-070X

Keywords

1 – 10 of 296