Can Consumers Learn Price Dispersion? Evidence for Dispersion Spillover Across Categories

2021 ◽  
Author(s):  
Quentin André ◽  
Nicholas Reinholtz ◽  
Bart De Langhe
Keyword(s):  
Cognitive Processes ◽  
Price Dispersion ◽  
Product Categories ◽  
Intuitive Statistics ◽  
Multiple Product

Abstract Price knowledge is a key antecedent of many consumer judgments and decisions. This paper examines consumers’ ability to form accurate beliefs about the minimum, the maximum, and the overall variability of prices for multiple product categories. Eight experiments provide evidence for a novel phenomenon we call dispersion spillover: Consumers tend to overestimate price dispersion in a category after encountering another category in which prices are more dispersed (versus equally or less dispersed). Our experiments show that this dispersion spillover is consequential: It influences the likelihood that consumers will search for (and find) better prices and offers, and how much consumers bid in auctions. Finally, we disentangle two cognitive processes that might underlie dispersion spillover. Our results suggest that judgments of dispersion are not only based on specific prices stored in memory, and that dispersion spillover does not simply reflect the inappropriate activation of prices from other categories. Instead, it appears that consumers also form “intuitive statistics” of dispersion: Summary representations that encode the dispersion of prices in the environment, but that are insufficiently category-specific.

scholarly journals Multi-Category Competition and Market Power: A Model of Supermarket Pricing

2017 ◽  
Vol 107 (8) ◽  
pp. 2308-2351 ◽  
Author(s):  
Øyvind Thomassen ◽  
Howard Smith ◽  
Stephan Seiler ◽  
Pasquale Schiraldi
Keyword(s):  
Market Power ◽  
Demand Model ◽  
Retail Pricing ◽  
Product Categories ◽  
Price Effects ◽  
One Stop ◽  
Consumer Data ◽  
Multiple Product ◽  
Category Effects ◽  
Category Pricing

In many competitive settings, consumers buy multiple product categories, and some prefer to use a single firm, generating complementary cross-category price effects. To study pricing in supermarkets, an organizational form where these effects are internalized, we develop a multi-category, multi-seller demand model and estimate it using UK consumer data. This class of model is used widely in theoretical analysis of retail pricing. We quantify cross-category pricing effects and find that internalizing them substantially reduces market power. We find that consumers inclined to one-stop (rather than multi-stop) shopping have a greater pro-competitive impact because they generate relatively large cross-category effects. (JEL D12, L11, L13, L81)

scholarly journals Adolescents Influence on Family Purchase Process in India

2019 ◽  
Vol 9 (2) ◽  
pp. 4772-4777
Keyword(s):  
Purchase Decisions ◽  
Product Categories ◽  
The Past ◽  
The Family ◽  
Purchase Process ◽  
Multiple Product ◽  
Work Done ◽  
The Relationship ◽  
Structured Questionnaire ◽  
Buying Decisions

Considering the significance of Adolescents behaviour in family purchase decisions, the study initiated with the objective to unearth the adolescents influence on the buying decisions of the family. The purpose of the study is listed down into three parts: Firstly, to explore the relationship between the age of adolescents and its effect on buying decisions of family. The next objective is to catalogue and position the products on the basis of influence of Adolescents. Subsequently, the other task is to examine and establish the comparative analysis of Adolescents influence for three different goods categories (so designed) and also analysing it at various stages of Family purchase process. The research methodology is based on the study of relevant review work done in the past and an interview conducted amongst the adolescents for the data collection. Furthermore, a structured questionnaire is circulated amongst adolescents aged between 14-19 years. Data was collected from 350 adolescents. Study also exhibited that there are three product categories identified by factor analysis explicitly “Prominent” Products, “Popular” Products and “Common” Products– It was observed that Popular products gained maximum attention of adolescents, followed by Prominent Products and the least attention seeker for adolescents are Common Products. These categories are designed in context to Indian families & environment. Multivariate Analysis of Variance, i.e., MANOVA was also applied for third objective which presented the outcome that in case of Prominent and Popular Products, adolescent’s impact is greatest at the beginning stage of the purchase process and least at exploration stage. But in case of Common Products, Adolescents influence is highest at the stage of decision making and selection. This study can have enormous future relevance for the marketers by the way of providing them with broad scope of adolescents’ behavioural understanding in family in context to different product categories and at multiple buying stages of family purchase process. This could be considered as the base for formulating and executing various marketing plans. The paper bears uniqueness in terms of analysing adolescents’ behaviour in relation to multiple product catalogues and relating the segmentation across various family buying stages.

scholarly journals “Worse Than What I Read?” The External Effect of Review Ratings on the Online Review Generation Process: An Empirical Analysis of Multiple Product Categories Using Amazon.com Review Data

2021 ◽  
Vol 13 (19) ◽  
pp. 10912
Author(s):  
Young Joon Park ◽  
Jaewoo Joo ◽  
Charin Polpanumas ◽  
Yeujun Yoon
Keyword(s):  
Online Reviews ◽  
Online Review ◽  
Generation Process ◽  
Product Categories ◽  
Consumer Review ◽  
Online Consumer ◽  
Multiple Product ◽  
Online Consumer Review ◽  
Fake Reviews ◽  
Better Than

In this paper, we study the online consumer review generation process by analyzing 37.12 million online reviews across nineteen product categories obtained from Amazon.com. This study revealed that the discrepancy between ratings by others and consumers’ post-purchasing evaluations significantly influenced both the valence and quantity of the reviews that consumers generated. Specifically, a negative discrepancy (‘worse than what I read’) significantly accelerates consumers to write negative reviews (19/19 categories supported), while a positive discrepancy (‘better than what I read’) accelerates consumers to write positive reviews (16/19 categories supported). This implies that others’ ratings play an important role in influencing the review generation process by consumers. More interestingly, we found that this discrepancy significantly influences consumers’ neutral review generation, which is known to amplify the effect of positive or negative reviews by affecting consumers’ search behavior or the credibility of the information. However, this effect is asymmetric. While negative discrepancies lead consumers to write more neutral reviews, positive discrepancies help reduce neutral review generation. Furthermore, our findings provide important implications for marketers who tend to generate fake reviews or selectively generate reviews favorable to their products to increase sales. Doing so may backfire on firms because negative discrepancies can accelerate the generation of objective or negative reviews.

Brand implications of advertising products with their reflections

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nazuk Sharma ◽  
Marisabel Romero
Keyword(s):  
Signaling Theory ◽  
Quality Uncertainty ◽  
Brand Trust ◽  
Content Type ◽  
Product Categories ◽  
Brand Advertising ◽  
Negative Effect ◽  
Multiple Product ◽  
Purchase Likelihood ◽  
The Impact

Purpose The purpose of this study is to investigate the impact of advertising products with their reflections on some important brand outcomes such as brand purchase likelihood, brand trust and consumer willingness to pay for the advertised product. Design/methodology/approach This research uses four experiments to assess the effects of advertising products with (vs without) reflections on the focal brand outcomes. Findings Results evidence a robust negative effect of advertising products with their reflections on the investigated brand outcomes across multiple product categories. Following Signaling Theory, product reflections are found to act as negative signaling devices in brand advertising contexts given that these inverted, false object reproductions are processed with a sense of confusion, ambiguity and uncertainty. Further in line with Signaling Theory, increased product quality uncertainty is determined as the underlying process and brand confidence signaling is tested as a relevant moderator to the proposed effects. Originality/value This inquiry is the first to systemically investigate brand implications of advertising products with their reflections. Counter to marketers’ aesthetic intuitions, the current research finds that this common advertising practice can actually hurt critical brand outcomes such as brand trust.

The effects of matching empty ad space color to featured product’s color on consumer buying impulse

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nazuk Sharma
Keyword(s):  
Positive Impact ◽  
Online Advertising ◽  
Empty Space ◽  
Impulse Buying ◽  
Content Type ◽  
Product Categories ◽  
Positive Effects ◽  
Multiple Product ◽  
Qualitative Responses ◽  
Positive Effect

Purpose The purpose of this paper is to investigate how matching an ad’s empty space color specifically to that of the advertised product’s color (instead of leaving it white) impacts consumers’ product buying impulse. It tests two competing hypotheses, where the salience explanation proposes a positive effect of empty space–product color matching on product buying impulse, while the contrast account predicts an opposite effect. Design/methodology/approach Data was gathered from US-based MTurk panelists under three experimentally designed studies. The proposed effects were tested across multiple product categories, colors and online advertising formats. Qualitative responses from experienced marketing executives were also assessed for managerial insights. Findings Across all studies, findings reveal that using a product-colored (vs white) empty space in an ad increases consumers’ product buying impulse, favoring the salience rather the contrast explanation. Increased ad salience owing to an enhanced exposure to product color (an important sensory aspect), in turn improving the product’s hedonic appeal work as serial processes explaining this effect. Originality/value This research is not only the first to investigate the effects of using colored empty space (where limited prior research has only focused on white empty space), but also the first to study its impact on impulse buying intentions. Counter to prior advertising research which suggests using greater contrast by using white empty space to achieve positive effects, this research empirically tests and finds that using a product-colored empty ad space instead has a positive impact on product buying impulse.

scholarly journals The Impact of Resource Scarcity on Price-Quality Judgments

2019 ◽  
Vol 46 (6) ◽  
pp. 1110-1124 ◽  
Author(s):  
Hanyong Park ◽  
Ashok K Lalwani ◽  
David H Silvera
Keyword(s):  
Boundary Conditions ◽  
Product Quality ◽  
Resource Scarcity ◽  
Purchase Decisions ◽  
Product Categories ◽  
Multiple Product ◽  
The Impact ◽  
The Web

Abstract Consumers routinely encounter situations in which they perceive that resources are scarce. However, little is known about how this perception influences consumers’ use of price in their purchase decisions. The present research seeks to fill this gap by examining the link between scarcity and the tendency to use price to judge product quality, and the mechanisms underlying that link. Six studies (and five more reported in the web appendix) using multiple product categories and a variety of operationalizations of both scarcity and price-quality judgments show that scarcity decreases consumers’ tendency to use price to judge product quality. This occurs because scarcity induces a desire to compensate for the shortage and seek abundance, and thereby reduces an individual’s general categorization tendency (because categorizing brings about a feeling of reduction); this, in turn, hinders consumers from viewing products as belonging to different price-tier groups, and thus lowers their tendency to use price as a basis for judging product quality. Boundary conditions for the proposed effect are also identified. The current research makes fundamental contributions to the literatures on scarcity, price-quality judgments, and categorization.

Sign in / Sign up

Export Citation Format

Share Document