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Price placebo effect in hedonic consumption
... Istilah efek plasebo tersebut kemudian diimplementasikan dalam bidang ilmu pemasaran dan digabungkan dengan variabel harga sehingga terbentuk variabel efek plasebo harga (Kim & Shawn, 2013;Shiv, et al., 2005). Harga memiliki peran penting dalam penilaian konsumen terhadap suatu barang. ...
... Penetapan harga ini ditujukan untuk mempengaruhi efek psikologis konsumen untuk memilih dan membeli barang yang diinginkan. Salah satu contoh adalah diskon yang dapat mengarahkan konsumen terdapat suatu kondisi efek plasebo (Kim & Shawn, 2013). Beberapa elemen ekuitas merek (Aaker, 1992) adalah persepsi kualitas yang menjelaskan alasan konsumen untuk membeli, membedakan posisi suatu produk dibandingkan dengan pesaingnya, dan harga. ...
... Beberapa elemen ekuitas merek (Aaker, 1992) adalah persepsi kualitas yang menjelaskan alasan konsumen untuk membeli, membedakan posisi suatu produk dibandingkan dengan pesaingnya, dan harga. Beberapa pembeli bahkan bersedia membayar produk dengan harga yang lebih mahal karena mereka percaya bahwa harga yang lebih tinggi terkait dengan kualitas yang lebih tinggi (Kim & Shawn, 2013). Selain itu, elemen ekuitas merek kedua konsumen yang memiliki pengalaman plasebo harga akan lebih sadar merek (brand awareness) karena mereka yakin bahwa sadar terhadap merek produk dan paham perusahaan apa saja yang memiliki merek dengan harga produk yang tinggi, kemudian dengan harga yang tinggi pasti memiliki kualitas yang tinggi pula. ...
There are interesting phenomena related to consumer behavior in Yogyakarta. One of them is price placebo effect. In Javanese language can be found words in relevance with price placebo effect, that is "ono rego ono rupo" which can be translated to where there is price, there is quality. Therefore, this research is aimed to prove the influence of price placebo effect on brand equity and hedonic consumption, atmospheric cues on hedonic consumption, and also the influence of hedonic consumption on brand equity and impulsive buying behavior. Path analysis is used to test the hypotheses and the total of 506 respondents are participated in this research. The result indicated that all of this research hypotheses are supported.
... Price-quality schema has explained the theoretical logic in strengthening consumers' overall experience when purchasing products. In particular, previous studies indicate that consumers' perception of price-quality based on the experience with products/services affect not only emotional aspects, such as satisfaction but also their behavior, including buying decisions and post-purchase intention (Kim and Jang, 2013;Niemand et al., 2019;Sternquist et al., 2004;Zhou et al., 2002). For example, Karjaluoto et al. (2016) explain that the price works as a positive cue that strengthens consumers' brand love and word-of-mouth. ...
... Niemand et al. (2019) also indicate that price-quality schema moderates the preference for pricing levels, to which the choice probability significantly increased for the higher prices, which is a function of robust reliance. In the hospitality sector, Kim and Jang (2013) illustrate that the price-quality schema significantly induces consumers' positive perception of quality at upscale cafés, which includes the product (coffee) and service and atmosphere. In this regard, this study proposes the following hypotheses: ...
Grocerants (grocery retail store + restaurant) represent a rising retail sector in the foodservice industry. The grocerant business model transforms a space of everyday mundanity (grocery retail shopping) into one of experiential value, offering consumers a social space to linger, dine, and seek nourishment all within the same commercial premise. To this end, grocerants represent an experientially driven consumption segment, a fertile context worthy of exploration yet understudied. Informed theoretically by the brand experience model, this study explored the role of grocerant patrons' product experiences, in conjunction with the variables of need for uniqueness, product satisfaction, product involvement, price-quality schema, and behavioral intentions. A quantitative approach and a field survey method were employed, and analyses confirmed the effectiveness of the higher-order structure of product experiences (sensory, affective, behavioral, intellectual, and escapism). In addition, satisfaction, involvement, and need for uniqueness were confirmed as contributors to building favorable behavioral intentions. The link between involvement and intention was also influenced significantly by price-quality schema, and satisfaction and involvement were accounted as critical mediators. Theoretical and practical implications were discussed.
... When quality is subjective, as in service experiences, price may act as a quality signal (Kim & Jang, 2013). In management practices, the same product (e.g. the same hotel room) can be sold at different prices, and, conversely, a lower-quality product might be sold at the same price of a higher-quality product, influencing consumers' beliefs and quality perceptions. ...
... Contextual factors were recognized as being influential in the strength of the expectations that might drive the placebo effect. Contextual factors such as trip characteristics within our scope of interest may be the brand name of the hotel (Foroudi, 2019), the perception of price and quality of the hotel (Rao & Monroe, 1988;Rao, 2005) whether any discount had been offered (Kim & Jang, 2013) and the temporal distance of booking (Jang et al., 2019) as well as customer generated reviews of the hotel (Mauri & Minazzi, 2013). Internal contextual, guest characteristics might be emotions (Kwortnik & Ross, 2007), confidence in self (Loibl et al., 2009), and confidence in one's ability with digital technologies (Pavlou & Fygenson, 2006). ...
Whilst there is extant research focusing on the link between hotel reviews and pricing there is scant attention paid to the impact of pricing on hotel review ratings. This paper presents a large scale study based on a novel dataset of more than 44,000 guest review ratings linked to the prices paid for rooms of an European hotel group. Through applying a panel regression analysis we reveal that expectancy-disconfirmation is generally stronger than the placebo effect and higher prices have a negative effect on review ratings, not only when assessing perceived value for money but also when evaluating perceived quality. We identify the trip and guest characteristics which impact on the price-review relationship. Findings provide hotel managers with key quantitative information for simultaneously calibrating quality and revenue targets. Substantial implications include an integrated approach for segmentation as a route to better manage pricing, revenue optimization and reputation.
... Kim et al., 2016;Lam et al., 2011;Siu et al., 2012) and destination harmony (Chua et al., 2015;Karagoz Yuncu, 2011;Lam et al., 2011;Wakefield & Blodgett, 1996) items to measure these components have been adapted from the literature of destination quality, destination image and servicescape Items related to perceived price (Han & Ryu, 2009;Küçükergin & Dedeoğlu, 2014), satisfaction (Cronin et al., 2000;Hosany & Gilbert, 2010) and behavioral intentions (Dedeoğlu et al., 2015;Hosany & Gilbert, 2010;Kim & Moon, 2009;Zeithaml et al., 1996) were adapted in line with destination context. Lastly, five statements which were developed by Lichtenstein et al. (1993) and used in a hospitality study by Kim and Jang (2013) were used in this research. The questionnaire was prepared in English and translated into Russian and German. ...
... Finally, the moderate role of prestige sensitivity in the relationship of price with its antecedents and consequences was examined with the help of the implications from literature (Correia & Kozak, 2012;Dedeoğlu, 2019;Kim & Jang, 2013). Identification of the moderate effect in these relationships has an explorative nature. ...
This study aims to examine the relationships among the destination physical servicescape elements, perceived price, tourist emotions, satisfaction and behavioral intentions. Besides, the moderating role of prestige sensitivity is investigated in terms of the relationship between the variables affecting and being affected by perceived price. For data analysis, PLS-SEM is applied and except for the effect of joy on behavioral intentions, all the other direct effects are found to be statistically significant. In addition, prestige sensitivity has a moderating role only in the relationship between the perceived price and love.
... This consumer behavior can be associated with the notion of conspicuous consumption (Bagwell & Bernheim, 1996). Recognizing that tourism is a high-involvement product, there could be travelers who would pay a premium price for a service just to exhibit their wealth (Kim & Jang, 2013), as a premium price implies exclusivity and distinctiveness. That is, paying a higher price may enable some people to meet their social need for esteem (Amaldoss & Jain, 2005). ...
... Prices in tourism have effects that are not as apparent as neoclassical economic theory predicts: not only can tourists sometimes invert the relationship between price and demand but also they might be predisposed to pay higher-than-expected prices. In this highly uncertain context, which is very information-sensitive and notably risk-averse and in which information asymmetries are particularly important, price-quality associations, an interest in reducing information asymmetries, hedonistic factors, or even a kind of placebo-like effect might be behind these non-consistent behaviors (Kim & Jang, 2013). This article has analyzed the effect of the information provided by prices on tourist destination choice by incorporating the sticker shock formulation into the MLM in an attempt to accommodate any possible positive or negative effects. ...
When departures from rational behavior can potentially be expected, modeling should allow for their identification and their quantification. In this regard, prices in tourism might have effects that may not be as apparent as economic theory predicts. This article incorporates the sticker shock formulation into the mixed logit model without imposing consistency with consumer theory to accommodate any possible positive or negative price effects. By allowing the parameters of “price” and “sticker shock term” to take any value – negative or positive – we detect abnormal behaviors in the tourist demand: not only is the negative relationship between price and demand inverted for some people but also some tourists might be willing to accept higher-than-expected prices. The “non-well-behaved” groups' shares are estimated.
... Therefore, a strongly branded district in South Korea, "Gangnam", was chosen due to its high profile and strong brand. This area is known as the "Beverly Hills of Seoul" for its high-end fashion, fine dining, boutiques, and trendy restaurants [12]. It received worldwide recognition due to Psy's 2012 mega-hit song, "Gangnam Style". ...
... As stated earlier, this study focuses on a very distinct district internationally known for its high-end fashion, the Gangnam district in South Korea. The Gangnam district has become a major tourist destination associated with upscale and diverse culture [12]. Gangnam is a strong branded destination. ...
When tourists chose destinations, they usually select locations that satisfy the subjective criteria of their requirements. The purpose of this study was to delineate those criteria by analyzing the interrelationships among destination personality, image, and intent to recommend while examining the effects of gender, age, cultural background, and prior tourist experience. The data were collected from a major tourism destination in South Korea. A total of 316 usable surveys were analyzed using structural analysis. The results show that three of the four factors for destination personality significantly affected destination image. In turn, destination image influenced intent to recommend. Subsequent tests for metric invariances showed differences in the moderating role of cultural background, gender, age, and prior experience.
... However, this tendency weakens when the product is considered hedonic rather than utilitarian. This is because, for hedonic products, consumers tend to rely more on heuristics (i.e., the price-quality heuristic; Kim & Jang, 2013) to make judgments. Past literature reveals that consumers engage in heuristic processing when considering hedonic products and systematic processing when thinking about utilitarian products (e.g., Alsulaiman, 2013; Alvarez Alvarez & Vázquez Casielles, 2005). ...
Product overlapping display is widely used in high-imagery ads, shopping websites, and retail displays. However, little is known about whether and how product overlapping display influences consumers’ use of heuristics in their decisions. The research seeks to fill this gap by examining the link between product overlapping display and consumers’ tendency to use price to judge product quality. Four experiments designed to address this question revealed that an overlapping product display increases consumers’ tendency to make price–quality judgments, driven by their lower perceived uniqueness of products and higher perceived product entitativity. However, this effect is shown to be dismissed when the product is hedonic.
... Arnould and Thompson [23] calls for the need "… to develop a unique body of knowledge about fashion consumers and fashion consumptions for private fashion brands" within each product category as a direction of future consumer research. Furthermore, research endeavours directed at hedonic fashion consumption are highly encouraged for a young fashion industry that demonstrate high private brand failure rate [12,13]. The private fashion brands are emergent in the SSA and the fashion industry have high failure rate, which offers opportunity to respond to the call to engage in private brand hedonic fashion consumption research. ...
The observed intense competitive fashion market and the fragmented knowledge in fashion involvement which is largely skewed towards utilitarian dimension have combined to trigger this study. Accordingly, this paper seeks to unravel hedonic antecedents of fashion involvement and consumption in a fast-expanding market of a typical developing sub-Saharan African country context; and to posit a framework to guide private brand fashion consumer research in fast-expanding markets from developing country context. Data were collected through the aid of structured questionnaire from fashion consumers in top fashion outlets in Lagos metropolis. Structural Equation Modeling (SEM) technique was deployed to process data regarding hypothesized causal relationships using SmartPLS 2.0 software. Support was found for three hedonic drivers and support was not for one. Fashion belief was found as strong mediator between fashion involvement and fashion consumption. The study develops a theory that reflects hedonic drivers of fashion involvement by providing strategic insights for local fashion brand entrepreneurs, especially as they compete with established global brands. Theoretical and managerial implications of the findings were discussed.
... On the other hand, low prices can raise doubts about the quality of the products/services (Raab, Mayer, Kim, & Shoemaker, 2009), and it may negatively influence overall satisfaction (Cao et al., 2003;Martin-Fuentes, 2016). Additionally, there is a placebo effect related to high price that supports the increase in consumers' expectations and the enhancement of behavioral performance, and it can improve the customer experience (Kim & Jang, 2013). Concerning this contradictory effect, within the hospitality context, Abrate at al. (2021) analyzed the confrontation of Expectancy-disconfirmation versus placebo effect, and Chen, Yang, Li, and Liu (2015) suggested an inverse U-shape relationship between price and customer satisfaction. ...
... Perceived value is defined as consumer's overall assessment of the product (Zeithaml, 1988;Asgarpour et al., 2014). It means good quality of the alternative product can help in building trust and commitment to switch and use the product (Kim and Jang, 2013;Moliner et al., 2007;Asgarpour et al., 2014). The higher value (such as quality, benefits, utility, norms, standards and rules) of the alternative product, the more desire to switch to alternative products (Holbrook, 1994, 1999in S anchez-Fern andez and Iniesta-Bonillo, 2007. ...
Purpose
The paper aims to investigate the push, pull and mooring effects towardswitching intention to halal cosmetic products.
Design/methodology/approach
The rapid growth of the halal industry in Muslim and non-Muslim countries opens a new market for cosmetic companies. For Muslims, using halal cosmetics is one of the religious orders, which their behavior relies on religious values. However, consuming nonhalal cosmetic products is still popular among Muslim consumers. The data are gathered through an online self-administered questionnaire. The total sample is 220 Indonesian females with an 88% response rate. Then, partial least squares structural equation modeling is used to analyze the data.
Findings
The result showed that regret, perceived value and religious beliefs influence the switching intention behavior to use halal cosmetics products. While dissatisfaction influences regret, and the brand also influences perceived value.
Originality/value
The paper provides several factors that are still rarely investigated previously in the context of halal cosmetics literature, such as perceived value and brand image (Handriana et al. , 2020). Hence, these factors contribute significantly to the intention of Muslim consumers to switch to halal cosmetics.
... The effect of mental budgeting has been examined in hospitality and tourism (Brida & Tokarchuk, 2015;Jang et al., 2007;Kim & Jang, 2013. For example, Brida and Tokarchuk (2015) applied the theory of mental budgeting to study visitors' spending at a Christmas market in Merano. ...
Given the importance of booth attractiveness at trade expositions, this study sets out to develop a scale measuring booth attractiveness (Study 1) and to examine its effectiveness in motivating attendees’ purchasing behavior (Study 2). Study 1 includes three steps: (1) item generation through a thorough review of the literature, focus group, and comments from experts, (2) item purification with exploratory factor analysis using 122 samples, and (3) reevaluating items with confirmatory factor analysis using 129 samples. A six-dimensional scale of booth attractiveness was developed in Study 1. Based on the theory of mental budgeting, Study 2 was conducted to examine the effects of booth attractiveness on the mechanism of attendees’ purchasing behavior using 323 samples. Results of Study 2 suggest that booth attractiveness could directly motivate impulse buying or indirectly through mental budgeting. Impulse buying, then, results in post-purchase guilt and anticipated satisfaction. Meanwhile, postpurchase guilt reduces anticipated satisfaction.
... As the tourism sector is typically considered to be perishable, nonstandardized, and intangible, pricing is used by customers as an external informational cue even more due to the lack of availability of the internet and external information on prior experience (Ainscough, 2006;Murray, 1991;Zeithaml, 1981). In the tourism industry, the price influences customers perception of value (Chua et al., 2015;Oh, 1999), service quality (Ainscough, 2006;Kim & Jang, 2013), satisfaction (Mattila & O'Neill, 2003;Voss et al., 1998) customer risk (Maser & Weiermair, 1998), willingness to purchase travel package (Ainscough, 2006) or reserve or book hotel room (Noone & Mattila, 2009). Despite consumer decisions in the tourism industry being influenced by several factors, price is considered the most important (Lockyer, 2005). ...
... Lemon, et al.(2001) states value is the foundation stone for the success of consumer and supplier relationship. Customer value is uncertainty and helps in sustainable relationship with a firm (DongHee & Jang, 2013) and (Moliner et al., 2007) . Higher expensiveness in healthcare is the measure problem of the healthcare in today's world. ...
Purpose-The purpose of this study is to analyze perceived value and its effect on perceived quality, price,
location and satisfaction of hospitals in Kathmandu valley.
Design/Methodology/approach-The research is based on exploratory study on which causal comparative
research design has been used. A convenience sampling technique was used in this study. 149 respondents
have been taken as sample size through random sampling.
Finding- The result conformed that four-dimension location, perceived price, perceived quality and
satisfaction are a distinct construct for perceived value.Perceived price,perceived location and satisfaction
donot generally impact on perceived value of hospitals in Nepal. Perceived quality has been found as strong
impacting predictor of perceived value. Price is the highly sensitive for health service in context of
developing countries like Nepal. Price discrimination among the same level of hospitals might be
insignificant cause on perceived value. Perceived location doesnot impact on perceived value because
Nepalese people are more concern about the trust and relibility of service,reputation of hospitals and
recommendation from our relatives and doctors rather than convenience hospital location. In additional, the
correlation between price-quality and perceived quality-satisfaction have been found positive. The result
revealed that hospitals should increase their service quality through its supportive visionary leadership,
proper planning, education and training, availability of resources, effective management of resources,
employees and processes, and collaboration and cooperation among employers in Nepal.
Research limitation/Implication-The research examine the concept of perceived value, perceived quality,
satisfaction, perceived price and perceived location from the perspective of patients. It doesn’t consider the
perspective of service providers. This is a limitation as it only explores from the patients view which might
be different from provider view.
Practical implication-The result indicate that managers should perceived value as mechanisms for
competitive advantage that will lead patient loyalty among present customers.Quality should given
preference to incrase perceived value of the hospitals.
Originality/Value-This study will enable hospital to have sound understanding of their perceived value on
the effect of perceived value on the basis of perceived quality, perceived value, perceived price, location
and satisfaction in order to build sustainable relationship with their patients and competitive advantage on
market.
Keywords: Perceived value, perceived location, perceived price, perceived quality satisfaction, Hospitals,
patients
... Likewise, in the literature we may find several examples of how price influences individuals' perception of quality (e.g., Veale and Quester, 2009;Lalwani, and Shavitt, 2013). In fact, quality is higher as price increases, meaning that consumers' perception of price models the overall quality expectation and even its perception (Kim and Jang, 2013). Therefore, to eliminate any possible bias, prices were displayed alongside the product but with minimum differences between each other, to guarantee that it would not be a critical determinant. ...
Purpose
Wine bottles compete for consumers’ attention in the shelf during the decisive moment of choice. This study aims to explore the role that visual attention to wine labels has on the purchase decision and the mediating role of quality perceptions and desire on such purchase behaviours. Wine awards and consumption situation are used as moderators..
Design/methodology/approach
The study was conducted in Portugal and 36 individuals participated in a 2 × 2 within subjects design (awarded/not awarded × self-consumption/social-consumption). For each scenario, individuals’ attention, perceptions of quality, desire and purchase intentions were recorded.
Findings
Data from eye-tracking shows that, during the purchase process, the amount of attention given to a bottle is determinant of individuals’ purchase intentions, a relationship that increases in significance for bottles with awards and for when consumers are buying wine for a consumption situation involving a social environment. In addition, both quality perceptions and desire are confirmed to positively influence wines’ purchase intentions.
Originality/value
By using an eye monitoring method, this paper brings new insights into the wine industry by highlighting the impact that wines’ labels and different consumption situations have on individuals’ attention and purchase intention. Wine producers and retailers may benefit from the insights provided by the current study to refine their communication strategies by either highlighting product characteristics and pictorial elements, as it is the case of the awards, or communicating about their products for different consumption situations.
... , and perishable by nature-consumers use pricing as an external informational cue even more so because of the limited availability of external and/or internal (prior experience) information (Ainscough 2005;Murray 1991;Zeithaml 1981). Tourism and hospitality pricing has been shown to influence customer perceptions of service quality (Ainscough 2005;D. Kim and Jang 2013), value (Oh 1999;Chua et al. 2015), satisfaction (Voss, Parasuraman, and Grewal 1998;Mattila and O'Neill 2003), and has aided in consumers' risk reduction (Maser and Weiermair 1998), willingness to buy a travel package (Ainscough 2005), or book or reserve a hotel room online (Noone and Mattila 2009). ...
This research investigates the impact of different degrees of price dispersion on travelers’ hotel choice. More specifically, within an online travel agency (OTA) context, we examine the effect of wide (vs. narrow) price dispersion on hotel preference. In addition, we suggest two boundary conditions for this effect: salience of external regular price and perception of destination uncertainty. Across multiple studies, our results show that travelers prefer a hotel option featuring wide price dominance dispersion. Additionally, both the presence of an external regular price and the level of uncertainty associated with the hotel destination act as moderating influences. This work represents an emerging direction in the online price dispersion literature, namely, exploring the consequences of online price dispersion. In practice, by understanding the influence of price dispersion on consumer choice, OTAs can develop more effective pricing strategies in partnership with their hotel room suppliers.
... Previous research suggests that men and women have different motivations to purchase luxury goods (Mattila, 2000). When women visit an upscale café with men, their status-seeking motivations toward the café are much higher when looking for potential mates, and they spend more time in upscale cafés for status-seeking reasons compared to men (Kim & Jang, 2013). Based on the different attitudes between men and women toward a luxury brand or luxury restaurant, this research hypothesizes that: H 3a : Women will have more positive post-dining behavioral intentions than men for the fashion-branded restaurant/café. ...
The significant rise in luxury shopping has recently gained much attention. This paper seeks to better understand the factors involved in luxury consumption. Specifically, a list of ten luxury fashion-brand restaurants/cafés are identified and used to survey customers’ motivations, perceptions, demographics, and purchase behavior. This study finds that brand equity drivers significantly influence individual’s intention to visit other luxury fashion-brand restaurants/cafés, and purchase products that are associate with the luxury fashion-brand restaurants/cafés where he/she has previously patronized. Female customers show loyalty to luxury fashion brand products and revisit that specific fashion brand restaurants/cafés. These findings enrich and update the existing body of knowledge on luxury branded restaurants/cafés in relation to customers’ decision making. This study also provides practical implications for luxury fashion-brand F&B owners.
... Amazon Mechanical Turk (M Turk), an Internet crowdsourcing site, was used to collect the study data. The extant research has argued that the quality of data collected through M Turk can be reliable (Goodman, Cryder, & Cheema, 2013;Kim & Jang, 2013;Chandler, Mueller, & Paolacci, 2014;Cheung, Burns, Sinclair, & Sliter, 2016). The total number of participants was 277 (all were US citizens who were compensated 50 cents for survey participation). ...
The purpose of this study is to investigate the antecedent attributes of customer satisfaction in the coffee shop business domain. Based on the literature, this research examines “atmosphere,” “employee attitudes,” “information technology service (IT service),” and “coffee quality” in relation to “satisfaction” and “loyalty.” A total of 277 observations were obtained from data collected using Amazon Mechanical Turk. For the data analysis, confirmatory factor analysis and structural equation modeling were conducted to examine the validity of the measurements and to understand the structural relationship. The results showed that the hypothesized antecedent variables were statistically significant to account for satisfaction. In particular, taste was identified as the most influential attribute accounting for satisfaction. Moreover, a significant relationship between “satisfaction” and “loyalty” was identified.
... The price can be a clue regarding expectations related to the performance of the products and services [79]. In other words, price can affect customers' satisfaction regarding a product or service [80], repurchasing, and WOM intentions [81], which has a psychological effect on their assessments [82]. Price can also play a role as a moderate variable between satisfaction and behavioural intention [83]. ...
The purpose of this paper is to have a revision on customer perceived value and main components of customer value. This revision attempts to makes more clarification on customer perceived value as a foundation stone to the success of buyer-seller relationships. In this regard, this study was conducted to address following problem. The problem is; satisfied customers may not return to the firm and spread positive word-of-mouth communications to others despite of having customer satisfaction in a firm. Whereas customer value can help to build trust and causes willing to commit long-term relationship with a firm. Thus, customer perceived value is discussed by offering a review on the importance of customer perceived value, and its main components. Finally, the paper finds out, in spite of having customer satisfaction, the firm does not deliver what is exactly value in the mind of customer. Therefore, by offering desired value to the customers, long-term relationship gained which is the result of customer loyalty.
... Research also suggests that expectancies may "spillover", that is, MPEs may also alter evaluations of (context-) related products or services. For instance, higher pricing of products was shown to improve overall consumer experiences and induces self-reported positive perception of the overall quality of a coffee shop, including the product itself (i.e., coffee), as well as service and atmosphere (Kim and Jang 2013). Converging evidence comes from a study that found that a label that provides information on the origin of a wine can influence evaluations of co-occurring products. ...
Food decisions occur very frequently and are influenced by a variety of individual as well as contextual factors. Physical product attributes, including for example, caloric density, water content and sweetness are important drivers of food choice and preferences. However, food products are usually not evaluated solely based on their nutritional content. In addition, most products are packaged and carry abstract attributes, such as quality claims, and brand names. Critically, these product attributes, not products attributes also influence food consumption, reported consumption enjoyment, and product demand. A variety of these marketing actions were shown to alter consumption experiences of otherwise identical products, inducing a so-called marketing placebo effect (MPE). Here, we review studies providing insights into the various behavioral and neural processes underlying the response to these contextual marketing cues. An extensive amount of studies has shown impressive, sometimes peculiar and also disquieting effects of branding, logos, labels and prices on behavioral measures. We will illustrate the plethora of affected behaviors, ranging from increased taste pleasantness ratings for higher-priced wines to enhanced cognitive performance after drinking a higher-priced energy drink, compared to the identical lower-priced counterparts. Credence attributes, such as organic or social sustainability labels, have been gaining relevance in many industrialized countries, and influence product demand and consumption experience. We will therefore introduce studies that systematically investigated the effects of credence claims, elucidate possible mechanisms, and emphasize the negative consequences when misusing such claims. As children are an important and vulnerable target group for marketing actions, we will also specifically present studies conducted in children. These studies highlight the influence of marketing actions on children’s taste perception, product demand, and effort to obtain a certain product. We will shortly introduce the neurobiology of food choices, and present suggested processes underlying MPEs. Converging evidence confirms that MPEs are not a mere result of demand effects, but that they influence the neural responses to products down to a primary somatosensory level. We will show that marketing claims are very effective in influencing expectations and subsequent consumption experience. Therefore, we suggest that public policy interventions may build upon MPE research, and we will provide evidence for this supposition. Throughout this review, we present insights from a variety of different disciplines, including marketing, psychology, neuroscience and nutrition science. Albeit far from exhaustive, this non-systematic review aims at providing a joint perspective from various fields, highlighting that future research endeavor is certainly auspicious.
... Thus, price-quality schema does not focus on actual product quality, but on the consumer's belief in the relationship between quality and price (Lichtenstein and Burton, 1989). As also indicated by Kim and Jang (2013) many consumers perceive that price and quality are highly correlated. The consumers develop these beliefs through their own consumption experiences (Smith and Natesan, 1999), and are likely to pursue high priced products in an effort to achieve better quality (Hauck and Stanforth, 2007). ...
Despite the rapid increase in online shopping, the literature is silent in terms of the interrelationship between perceived risk factors, the marketing impacts, and their influence on product and web-vendor consumer trust. This research focuses on holidaymakers’ perspectives using Internet bookings for their holidays. The findings reveal the associations between Internet perceived risks and the relatively equal influence of product and e-channel risks in consumers’ trust, and that online purchasing intentions are equally influenced by product and e-channel consumer trust. They also illustrate the relationship between marketing strategies and perceived risks, and provide managerial suggestions for further e-purchasing tourism improvement.
... The price can be a clue regarding expectations related to the performance of the products and services (Mattila & O'Neill, 2003). In other words, price can affect customers' satisfaction regarding a product or service (Bojanic, 1996), repurchasing, andWOM intentions (Han andRyu, 2009;Kozak, 2001), which has a psychological effect on their assessments (Kim & Jang, 2013). Price can also play a role as a moderate variable between satisfaction and behavioural intention (Siu, Wan, & Dong, 2012). ...
Objective – The purpose of this paper is to have a revision on customer perceived value and main components of customer value. Methodology/Technique – This study was conducted to address following problem. The problem is; satisfied customers may not return to the firm and spread positive word-of-mouth communications to others despite of having customer satisfaction in a firm. Whereas customer value can help to build trust and causes willing to commit long-term relationship with a firm. Thus, customer perceived value is discussed by offering a review on the importance of customer perceived value, and its main components. Findings – The paper finds out, in spite of having customer satisfaction, the firm does not deliver what is exactly value in the mind of customer. Therefore, by offering desired value to the customers, long-term relationship gained which is the result of customer loyalty. Novelty – This revision attempts to makes more clarification on customer perceived value as a foundation stone to the success of buyer-seller relationships. Paper type: Conceptual Paper
... In terms of customers, the price can be a clue regarding expectations related to the performance of the products and services (Mattila & O'Neill, 2003). In other words, price can affect customers' satisfaction regarding a product or service (Bojanic, 1996), repurchasing, and WOM intentions (Han & Ryu, 2009;Kozak, 2001), which has a psychological effect on their assessments (Kim & Jang, 2013). Price can also play a role as a moderate variable between satisfaction and behavioural intention (Siu, Wan, & Dong, 2012). ...
The main objective of this study was to determine the impact of employee hospitability on customer satisfaction, the impact of customer satisfaction on behavioural intentions, and the moderate effect of the perceived price in this relationship. Structural Equation Modelling was used to analyse the specified relationships. It was proved that employee hospitability affects customer satisfaction, and customer satisfaction affects both the repurchase intention and word-of-mouth (WOM) positively. In addition, when customers were divided into two groups, it was proved that the relationship between customer satisfaction and WOM is stronger in the unreasonable price perception group.
... Wine that is thought to be more expensive is also associated with greater stimulation of the pleasure centers of the brain (Plassmann et al. 2008). In general, menu prices are used by consumers as a signal of restaurant quality (Hardesty et al. 2007;Kim and Jang 2013). ...
A field experiment was conducted to assess how diners' taste evaluations change based on how much they paid for an all-you-can-eat (AYCE) buffet. Diners at an AYCE restaurant were either charged $4 or $8 for an Italian lunch buffet. Their taste evaluation of each piece of pizza consumed was taken along with other measures of behavior and self-perceptions. Their ratings were analyzed using 2 × 3 mixed design analysis of variance (ANOVA). Diners who paid $4 for their buffet rated their initial piece of pizza as less tasty, less satisfactory and less enjoyable. A downward trend was exhibited for each of these measures with each additional piece (P = 0.02). Those who paid $8 did not experience the same decrement in taste, satisfaction and enjoyment. Paying less for an AYCE experience may face the unintended consequence of food that is both less enjoyable and rapidly declining in taste and enjoyability. In a sense, AYCE customers get what they pay for.Practical ApplicationsThis study demonstrates that when eating in a less expensive all-you-can-eat (AYCE) buffet, people find the food less tasty. Such a consequence means a less enjoyable experience for the consumers, which may have implications for repeat purchase. By employing a low-price strategy, AYCE restaurants can attract the initial business of customers. However, these customers may end up evaluating the food unfavorably. As a result, the low-price strategy may not be as profitable in the long term. This study has implications for both consumers and restaurants.
This research aims to study the impact of the perceived brands of hotels and destination management corporates on customer citizenship behavior and employee responsiveness. In addition, studying the effect of employee responsiveness and perceived brand on customer citizenship behavior. There were 246 questionnaires distributed among tourists from different destinations at Cairo international airport and international hotel chains in Cairo. The results declared that brand awareness, brand attributes, and brand identity have a positive impact on customer citizenship behavior. Moreover, they have a positive impact on employee responsiveness which affects customer citizenship behavior. On the other side, there was a negative impact of employee responsiveness on customer citizenship behavior. This research recommends the importance of considering customer feedback, launching promotional campaigns to spread brand awareness, improving brand quality, and enhancing employees' skills to guarantee customer satisfaction, loyalty, and perceived value.
When making travel decisions, consumers are frequently exposed to a multitude of options, including differing price levels for the same product or service across a range of online travel agencies. The current research investigates how the magnitude of price dispersion in online pricing can influence travelers’ product evaluations and purchase intentions. Specifically, we predict that travelers will prefer a hotel with no price dispersion to a hotel with different prices listed when the price difference is small, or narrow. However, when the price difference is more pronounced, or wide, travelers will prefer a hotel with price differences compared to a hotel with no price dispersion. Four experiments demonstrate that this effect is consistent across different contexts and categories. Additionally, based on life history theory, we argue that the relative preference for the same versus different price dispersion will be moderated by the travelers’ childhood socioeconomic status (SES).
This study aims to investigate consumer perceptions and reactions in terms of specific discount patterns (fixed price, 40% discount, discount from 500 TL to 300 TL and 20% + 25% discount) in price promotion. According to the results, specific discount patterns in price promotion have a significant effect on perceived price attractiveness and purchase intention. When the specific discount patterns in price promotion and gender interaction were analyzed in terms of perceived price attractiveness, the scenario of the “discount from TL 500 to TL 300” significantly differentiated from both the control scenario (fixed price) and experimental scenarios for female. For males, no significant difference was found between the control and experimental scenarios. In terms of purchase intention, a significant difference was found between the fixed price scenario and the discount scenario from 500 TL to 300 TL and between the fixed price and 20% + 25% discount scenario. The theoretical managerial implications of the study were discussed, and future research suggestions were presented.
Destination branding is a key factor in the creation of a differentiated identity to increase a tourist’s interest in travelling to a specific area. This study investigated the effects of self-congruity and destination image on destination loyalty. The sample comprised of both Western and Asian destination tourists to South Korea. To analyse the data, descriptive statistics, confirmatory factor analysis, and structural equation modelling (SEM) methods were utilized. The findings confirmed the influential role of self-congruity and destination image on destination loyalty in both samples. A multi-group SEM analysis revealed the differential effect of self-congruity and destination image on destination loyalty, which was dependent on the tourists’ countries of origin.
This study explores the importance of psychographic characteristics as potential segmentation bases in the higher education sector. In particular, we develop a taxonomy of university students based on their achievement orientation and prestige sensitivity. The study analyses the survey data obtained from 948 respondents using cluster analyses and multiple analysis of variance (MANOVA), indicating interesting findings. Three distinct clusters emerge, namely Strivers, Modest Achievers and Prestige-seeking Innovators. Findings reveal that Prestige-seeking Innovators have a more positive attitude towards the university, whereas Strivers have the strongest sense of regret over their decision to enrol at their current university and would seize the opportunity to enrol in a more prestigious university. The taxonomy is highly relevant to marketers of higher education institutions as it gives insights into potential bases for segmentation, positioning and communication strategies targeting the specific characteristics of each segment.
Purpose
This research aims to investigate differences between cohorts and perceptions of luxury goods and services.
Design/methodology/approach
A survey asked participants to rate goods to determine their perceptions of luxury. Participants also provided information concerning elasticity and motivations for purchasing goods and services. A total of 347 participants in three age groups completed the questionnaire.
Findings
The study shows that there are significant differences between cohort groups in their perceptions of luxury goods and services, especially between the oldest and youngest cohorts. The elasticity measures showed that for all three cohorts, certain goods and services were inelastic and, therefore, were considered not to be luxury goods. The reasons why people buy goods they do not need varied between cohorts.
Research limitations/implications
The results of the study may not be generalizable to other groups of consumers because it was a convenience sample.
Practical implications
The results of this study show that marketers need to tailor messages to individual cohort groups. Consumers' experiences at their “coming of age” do influence perceptions of luxury. There are different motivations for buying among the cohort groups. Identifying and leveraging these motivators in marketing communication will help to target these groups with appropriate messages. Marketers need to understand those motivations and develop communication campaigns that target those groups.
Originality/value
Little research has focused on the cohort perception of luxury. Although there is evidence to suggest there will be differences between age groups, this study seeks to investigate those differences to help marketers to tailor their messages more effectively.
Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions about the concepts and their relationships are presented, then supported with evidence from the literature. Discussion centers on directions for research and implications for managing price, quality, and value.
Although Western economies have not yet transitioned out of crisis, the luxury sector is growing again, especially at the high end. In emerging countries, the luxury sector's expansion has reached double digits. However, as luxury products continue to penetrate global markets, the prestige of brands like Louis Vuitton has not declined at all. This seems at odds with the concept of luxury being tied to rarity and exclusivity. Thus, how can we reconcile these facts with theory? In order to capture mounting demands—not only from extraordinary people, but also from ordinary individuals—luxury brands enact virtual rarity tactics, construct themselves as art, and adopt a fashion business model while deemphasizing exceptional quality and country of origin. Rarity of ingredients or craft has been replaced by qualitative rarity. Further, the cult of the designer is a potent tool in building emotional connections with a vast number of clients. Today, brands in the luxury sector are actually selling symbolic and magic power to the masses. There exists a culture gap between Asia and the West; namely, Asian consumers feel safer buying prestigious Western brands with which individuals around them are familiar. The insights offered herein provide clues for entrepreneurs attempting to launch luxury brands.
Consumers often behave differently than they would ideally like to behave. We propose that an anticipatory pain of paying drives “tightwads” to spend less than they would ideally like to spend. “Spendthrifts,” by contrast, experience too little pain of paying and typically spend more than they would ideally like to spend. This article introduces and validates the “spendthrift-tightwad” scale, a measure of individual differences in the pain of paying. Spending differences between tightwads and spendthrifts are greatest in situations that amplify the pain of paying and smallest in situations that diminish the pain of paying.
If service quality relates to retention of customers at the aggregate level, as other research has indicated, then evidence of its impact on customers' behavioral responses should be detectable. The authors offer a conceptual model of the impact of service quality on particular behaviors that signal whether customers remain with or defect from a company. Results from a multicompany empirical study examining relationships from the model concerning customers' behavioral intentions show strong evidence of their being influenced by service quality. The findings also reveal differences in the nature of the quality-intentions link across different dimensions of behavioral intentions. The authors' discussion centers on ways the results and research approach of their study can be helpful to researchers and managers.
The authors report a study of the effects of price, brand, and store information on buyers' perceptions of product quality and value, as well as their willingness to buy. Hypotheses are derived from a conceptual model positing the effects of extrinsic cues (price, brand name, and store name) on buyers' perceptions and purchase intentions. Moreover, the design of the experiment allows additional analyses on the relative differential effects of price, brand name, and store name on the three dependent variables. Results indicate that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy. Favorable brand and store information positively influenced perceptions of quality and value, and subjects' willingness to buy. The major findings are discussed and directions for future research are suggested.
This case study examined the relationship among hotel room prices, occupancy percentage, and guest satisfaction using 3 years of data from 3,875 actual guest satisfaction surveys at an upper-midscale hotel. The study concludes that price was a significant predictor of overall guest satisfaction and three key guest-satisfaction components: guest room cleanliness, maintenance, and attentiveness of staff (with negative, curvilinear relationships in all cases). Conversely, occupancy percentage failed to be a significant predictor of guest satisfaction.
Used 7 price-related constructs, 5 consistent with a perception of price in its "negative role" and 2 consistent with a perception of price in its "positive role," as independent variables to predict marketplace responses/behaviors in 5 domains: price search, generic product purchases, price recall, sale responsiveness, and coupon redemption. The price-related constructs explained a significant amount of variance in all 5 domains, providing evidence of predictive validity. Results of a higher order factor analysis are also reported, which provide some support for the positive-negative perception of price taxonomy.
SERVQUAL, an instrument developed by Parasuraman, Zeithaml and Berry, is currently the most popular measure of service quality. Compares these original studies with subsequent research employing the SERVQUAL instrument. Analyzes its psychometric properties to gain some basic insights into the overall utility of this measure, and offers directions for its use in future research. Discusses managerial implications and recommendations resulting from these analyses.
In this article, the authors examine how consumer choice between hedonic and utilitarian goods is influenced by the nature of the decision task. Building on research on elaboration, the authors propose that the relative salience of hedonic dimensions is greater when consumers decide which of several items to give up (forfeiture choices) than when they decide which item to acquire (acquisition choices). The resulting hypothesis that a hedonic item is relatively preferred over the same utilitarian item in forfeiture choices than in acquisition choices was supported in two choice experiments. In a subsequent experiment, these findings were extended to hypothetical choices in which the acquisition and forfeiture conditions were created by manipulating initial attribute-level reference states instead of ownership. Finally, consistent with the experimental findings, a field survey showed that, relative to market prices, owners of relatively hedonic cars value their vehicles more than do owners of relatively utilitarian cars. The authors discuss theoretical implications of these reference-dependent preference asymmetries and explore consequences for marketing managers and other decision makers.
Demand-based pricing is underused in many service in- dustries, because customers are believed to perceive such pricing as unfair. Fencing can be highly effective in im- proving the perceived fairness of demand-based pricing. In this study, five fences were explored in a restaurant con- text across three countries (Singapore, Sweden, and the United States). Demand-based pricing in the form of cou - pons (two for the price of one), time-of-day pricing, and lunch/dinner pricing were perceived as fair. Weekday/ weekend pricing was seen as neutral to slightly unfair. Ta - ble location pricing was seen as somewhat unfair with po - tential negative consumer reactions to this practice. Furthermore, framing demand-based pricing as discounts improved perceived fairness. The findings were largely consistent for the three countries. Specifically, framing demand-based pricing as discounts or gains showed no country-specific effect.
The authors thank Himanshu Mishra, Chris Tay-lor (parts of this research formed the basis of his honors thesis), and Mon-ica Wadhwa for their help in administering the experiments and coding participants' responses. They also thank Eric Johnson, participants of the Distinguished Scholars Retreat at the University of Alberta, and the three anonymous JMR reviewers for their comments and suggestions. We dedi-cate this article to the late Dick Wittink for his exceptional guidance and encouragement. May he rest in peace. Editor's note: In contrast to other lead articles that were invited by for-mer editor Dick Wittink, this article is based on a regular submission. The authors demonstrate that marketing actions, such as pricing, can alter the actual efficacy of products to which they are applied. These placebo effects stem from activation of expectancies about the efficacy of the product, a process that appears not to be conscious. In three experi-ments, the authors show that consumers who pay a discounted price for a product (e.g., an energy drink thought to increase mental acuity) may derive less actual benefit from consuming this product (e.g., they are able to solve fewer puzzles) than consumers who purchase and con-sume the exact same product but pay its regular price. The studies con-sistently support the role of expectancies in mediating this placebo effect. The authors conclude with a discussion of theoretical, managerial, and public policy implications of the findings.
Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions about the concepts and their relationships are presented, then supported with evidence from the literature. Discussion centers on directions for research and implications for managing price, quality, and value.
This research examines three factors that are associated with college students' credit card indebtedness. Using survey data, we find that college students' buying patterns and social networks affect their credit card indebtedness. Specifically, students with a tendency towards compulsive buying are more likely and those with greater social support are less likely to hold credit card debts. Depth interview data further illustrate the contexts and causes of overusing credit cards as well as solutions for their debt problem. This research sheds light on reasons why college students fall into credit card debt and suggests strategies for helping them use credit cards wisely.
The consumer culture has evolved into one of the most powerful forces shaping individuals and societies (Roberts and Sepulveda 1999 a, b). The desire to become a member of the consumer culture appears to be universal (Droge and Mackoy 1995). Changing attitudes toward money are an important catalyst behind the spread of the consumer culture. Money is important—especially to American college students who have been raised in a credit card society where debt is used freely (Ritzer 1995). Schor (1998) believes that access to easy credit is one of the causes of overspending. Using a causal modeling approach, the present study investigated the role money attitudes and credit card use play in compulsive buying within a sample of American college students (see Figure 1). Findings suggest that the money attitudes powerprestige, distrust, and anxiety (Yamauchi and Templer 1982) are closely related to compulsive buying and that credit card use often moderates these relationships. Study results have important public policy, marketing, and research implications.
In the standard economic account of consumer behavior the cost of a purchase takes the form of a reduction in future utility when expenditures that otherwise could have been made are forgone. The reality of consumer hedonics is different. When people make purchases, they often experience an immediate pain of paying, which can undermine the pleasure derived from consumption. The ticking of the taxi meter, for example, reduces one's pleasure from the ride. We propose a “double-entry” mental accounting theory that describes the nature of these reciprocal interactions between the pleasure of consumption and the pain of paying and draws out their implications for consumer behavior and hedonics. A central assumption of the model, which we call prospective accounting, is that consumption that has already been paid for can be enjoyed as if it were free and that the pain associated with payments made prior to consumption (but not after) is buffered by thoughts of the benefits that the payments will finance. Another important concept is coupling, which refers to the degree to which consumption calls to mind thoughts of payment, and vice versa. Some financing methods, such as credit cards, tend to weaken coupling, whereas others, such as cash payment, produce tight coupling.
Our model makes a variety of predictions that are at variance with economic formulations. Contrary to the standard prediction that people will finance purchases to minimize the present value of payments, our model predicts strong debt aversion—that they should prefer to prepay for consumption or to get paid for work after it is performed. Such pay-before sequences confer hedonic benefits because consumption can be enjoyed without thinking about the need to pay for it in the future. Likewise, when paying beforehand, the pain of paying is mitigated by thoughts of future consumption benefits. Contrary to the economic prediction that consumers should prefer to pay, at the margin, for what they consume, our model predicts that consumers will find it less painful to pay for, and hence will prefer, flat-rate pricing schemes such as unlimited Internet access at a fixed monthly price, even if it involves paying more for the same usage. Other predictions concern spending patterns with cash, charge, or credit cards, and preferences for the earmarking of purchases.
We test these predictions in a series of surveys and in a conjoint-like analysis that pitted our double-entry mental accounting model against a standard discounting formulation and another benchmark that did not incorporate hedonic interactions between consumption and payments. Our model provides a better fit of the data for 60% of the subjects; the discounting formulation provides a better fit for only 29% of the subjects (even when allowing for positive and negative discount rates).
The pain of paying, we argue, plays an important role in consumer self-regulation, but is hedonically costly. From a hedonic perspective the ideal situation is one in which payments are tightly coupled to consumption (so that paying evokes thoughts about the benefits being financed) but consumption is decoupled from payments (so that consumption does not evoke thoughts about payment). From an efficiency perspective, however, it is important for consumers to be aware of what they are paying for consumption. This creates a tension between hedonic efficiency and what we call decision efficiency. Various institutional arrangements, such as financing of public parks through taxes or usage fees, play into this tradeoff. A producer developing a pricing structure for their product or service should be aware of these two conflicting objectives, and should try to devise a structure that reconciles them.
How is risk-taking affected by prior gains and losses? While normative theory implores decision makers to only consider incremental outcomes, real decision makers are influenced by prior outcomes. We first consider how prior outcomes are combined with the potential payoffs offered by current choices. We propose an editing rule to describe how decision makers frame such problems. We also present data from real money experiments supporting a "house money effect" (increased risk seeking in the presence of a prior gain) and "break-even effects" (in the presence of prior losses, outcomes which offer a chance to break even are especially attractive).
While consumer choice research has dedicated considerable research attention to aspects of choice that are deliberative and conscious, only limited attention has been paid to aspects of choice that occur outside of conscious awareness. We review relevant research that suggests that consumer choice is a mix of conscious and nonconscious influences, and argue that the degree to which nonconscious influences affect choice is much greater than many choice researchers believe. Across a series of research domains, these influences are found to include stimulus that are not consciously perceived by the consumer, nonconscious downstream effects of a consciously perceived stimuli or thought process, and decision processes that occur entirely outside of awareness.
Recent tourism and hospitality research has evidenced growing interests in such marketing issues as pricing, quality management, and value-laden destination development. While these and related behavioral theories have been introduced into the tourism and hospitality literature, many of them need rigorous re-evaluations and systematic inquiries in the tourism and hospitality context. Hence, building on economic utility theory, this study investigates a pricing issue with a focus on potential asymmetric effects of positive and negative price deviations—deviations from the internal reference price—on overall price, quality, and value perceptions of traveling lodging customers. Results indicate that the hypothesized asymmetric effects between positive (i.e., gain) and negative (i.e., loss) price deviations exist in buyers’ judgments of quality and value, although this is not the case in overall price perceptions. The article includes managerial implications of the findings and suggestions for future research in related contexts.
Generation Y is regarded as the elusive new youth market, whose members are as resistant to advertising efforts as were members of Generation X before them. To investigate various factors that influence the use of advertising among the college segment of Generation Y, a survey was administered to a random sample of 368 college students. Questions probed self-identity, relevance of depictions in the media, and the informational value of advertising across eight media. Results show that gender and a variety of personality traits such as introversion/extroversion affect both the perceived value of advertising as an information source and the relevance of depictions in the media. Depictions in movies and television were rated significantly better than depictions in advertising. Implications are drawn for both media planners and marketing strategists trying to communicate with this elusive group.
Interpersonal influences are a key explanatory variable in many marketing applications. While individuals are frequently directed in their product choice and usage by referent others and may conform to these directions to gain group acceptance, our knowledge about the conformity pressures exerted in the marketplace is relatively limited. The purpose of this study is to explore conformity by examining the multitude of factors that predispose individuals to conform to the influence of others. A theoretical model of conformity is advanced, and applications of conformity theory to marketing practice are suggested.
In this article, we provide guidance for substantive researchers on the use of structural equation modeling in practice for theory testing and development. We present a comprehensive, two-step modeling approach that employs a series of nested models and sequential chi-square difference tests. We discuss the comparative advantages of this approach over a one-step approach. Considerations in specification, assessment of fit, and respecification of measurement models using confirmatory factor analysis are reviewed. As background to the two-step approach, the distinction between exploratory and confirmatory analysis, the distinction between complementary approaches for theory testing versus predictive application, and some developments in estimation methods also are discussed.
This essay explores the rise of ''speciality'' coffees over the past two decades, examining the changing structure and organization of the coffee trade. It concentrates on the shaping of consumption as retailers have moved from mass to niche marketing, imagining a class and generational map of the United States in their attempts to capture a segment of a shrinking market. Shifts in the consumption and marketing of a single commodity, such as coffee, are related to a wider set of social and cultural changes, and the essay concludes with a consideration of these changes and of an anthropology that attends to them.
In this article, we provide guidance for substantive researchers on the use of structural equation modeling in practice for theory testing and development. We present a comprehensive, two-step modeling approach that employs a series of nested models and sequential chi-square difference tests. We discuss the comparative advantages of this approach over a one-step approach. Considerations in specification, assessment of fit, and respecification of measurement models using confirmatory factor analysis are reviewed. As background to the two-step approach, the distinction between exploratory and confirmatory analysis, the distinction between complementary approaches for theory testing versus predictive application, and some developments in estimation methods also are discussed.
This paper presents an extension of the quality guidance model of Steenkamp and Van Trijp that includes consumer quality formation processes. Quality expectations and quality experiences are seen as antecedents of perceived overall product quality. The conceptual model is applied using LIS-REL to a data set on Danish butter cookies. Five plausible models of the relation between expectation, experience and perceived product quality are estimated. Finally one model is selected on the basis of three criteria: chi-square, RMSEA and AIC. The results show a model where expectations are indirectly related to perceived quality through experience.
This research aims to examine the relationships among three components of the physical environment (i.e., décor and artifacts, spatial layout, and ambient conditions), price perception, customer satisfaction, and customer loyalty in the restaurant industry. A total of 279 cases from a survey were used to assess overall fit of the proposed model and test hypotheses using structural equation modeling. The three factors of the physical environment strongly influenced how customers perceived price, and this price perception, in turn, enhanced customer satisfaction level and directly/indirectly influenced customer loyalty. Décor and artifacts were the most significant predictors of price perception among the three components of the physical environment. Furthermore, both price perception and customer satisfaction played significant partial/complete mediating roles in the proposed model. The paper provides potential ways for restaurateurs to increase customer loyalty by improving their understanding of the roles of physical environment, price perception, and customer satisfaction.
Although the role of price expectations in predicting consumer behavior has been widely acknowledged, little is known about the way in which price expectations depend on environmental elements in hospitality settings. We propose that restaurant guests base price expectations on (1) perceptions of customer input derived from behavioral cues (a self-service buffet) and (2) luxury perceptions derived from symbolic cues indicative of restaurant positioning (table decorations and menu descriptions). Results of two scenario experiments were in line with these predictions and indicate that environmental cues not only serve as a means to embellish the servicescape, but can also be used to reinforce a desired price image.
I. The nature of the problem, 183. — II. Functional and nonfunctional demand, 188. — III. The bandwagon effect, 190. — IV. The snob effect, 199. — V. The Veblen effect, 202. — VI. Mixed effects, 205. — VII. Conclusion, 206.
Identifies some managerially relevant factors that influence the size of the price premium that consumers will pay for national brands over store brands in grocery products. We define price premium as the maximum price consumers will pay for a national brand over a store brand, expressed as the proportionate price differential between a national brand and a store brand. Overall, perceived quality differential accounts for about 12 percent of the variation in price premiums across consumers and product categories and is the most important variable influencing price premiums.
Specialty coffeehouses have become an increasingly important segment of the foodservice industry in Hong Kong. The exponential growth of this segment has generated keen competition. Without a good understanding of their customers, these coffeehouses may end up losing market share to competitors. The purpose of this study is to identify the market segments in Hong Kong specialty coffeehouses based on the benefits sought by customers when they visit specialty coffeehouses. A survey of 1,000 customers was conducted. The results of this study support the effectiveness of segmenting the specialty coffeehouse customers in Hong Kong using the benefits variable. Four distinct segments of customers were identified: service seekers, atmosphere seekers, quality coffee seekers, and marketing-oriented customers. Based on the differences in coffeehouse selection factors, sociodemographic variables, and coffee consumption behaviors among the four segments, managers of specialty coffeehouses in Hong Kong can customize their strategies to meet the needs of these four market segments.
The authors integrate previous research that has investigated experimentally the influence of price, brand name, and/or store name on buyers' evaluations of prod¬uct quality. The meta-analysis suggests that, for consumer products, the relation¬ships between price and perceived quality and between brand name and perceived quality are positive and statistically significant. However, the positive effect of store name on perceived quality is small and not statistically significant. Further, the type of experimental design and the strength of the price manipulation are shown to significantly influence the observed effect of price on perceived quality.
The Great Good Place argues that "third places" - where people can gather, put aside the concerns of work and home, and hang out simply for the pleasures of good company and lively conversation - are the heart of a community's social vitality and the grassroots of democracy.
This paper defines hedonic consumption as those facets of consumer behavior that relate to the multisensory, fantasy and emotive aspects of product usage experience. After delineating these concepts, their theoretical antecedents are traced, followed by a discussion of differences between the traditional and hedonic views, methodological implications of the latter approach, and behavioral propositions in four substantive areas relevant to hedonic consumption-mental constructs, product classes, product usage and individual differences. Conclusions concern the usefulness of the hedonic perspective in supplementing and extending marketing research on consumer behavior.
Purpose
This research aims to investigate differences between cohorts and perceptions of luxury goods and services.
Design/methodology/approach
A survey asked participants to rate goods to determine their perceptions of luxury. Participants also provided information concerning elasticity and motivations for purchasing goods and services. A total of 347 participants in three age groups completed the questionnaire.
Findings
The study shows that there are significant differences between cohort groups in their perceptions of luxury goods and services, especially between the oldest and youngest cohorts. The elasticity measures showed that for all three cohorts, certain goods and services were inelastic and, therefore, were considered not to be luxury goods. The reasons why people buy goods they do not need varied between cohorts.
Research limitations/implications
The results of the study may not be generalizable to other groups of consumers because it was a convenience sample.
Practical implications
The results of this study show that marketers need to tailor messages to individual cohort groups. Consumers' experiences at their “coming of age” do influence perceptions of luxury. There are different motivations for buying among the cohort groups. Identifying and leveraging these motivators in marketing communication will help to target these groups with appropriate messages. Marketers need to understand those motivations and develop communication campaigns that target those groups.
Originality/value
Little research has focused on the cohort perception of luxury. Although there is evidence to suggest there will be differences between age groups, this study seeks to investigate those differences to help marketers to tailor their messages more effectively.
True loyalty, defined by a high relative attitude in addition to high repeat purchase, is an extremely valuable asset to the service firm – as the customer’s search motivation for competitive alternatives is reduced, he/she shows an immunity to the pull of competition and provides favourable word of mouth. A conceptual model presents the likely influence of customer relationships with service workers on the development of true customer loyalty to the service firm. It is suggested that strong customer relationships with a firm’s service personnel lead to true customer loyalty to the service firm, as positive attitudes towards service staff are transferred directly to the firm. In situations where a strong relationship develops between the customer and only one particular service worker, true loyalty to the service firm will be an outcome of high personal loyalty and therefore be dependent on the continued availability of the service worker. To assist managers in encouraging relationship development between high value customers and their service personnel, potential antecedents of relationship strength have been identified. These include: the amount of perceived benefits/rewards the customer receives from the service worker, the age of their relationship, the service contact intensity, the customer’s perceived risk in acquiring the service, the customer’s interpersonal orientation and the service worker’s customer orientation as perceived by the customer.
Social needs play an important role in the purchase of conspicuous goods. In this paper, we extend traditional economic models to accommodate social needs, such as desire for uniqueness and conformism, and examine their implications for pricing conspicuous goods. In the context of a duopoly, we identify the conditions under which the desire for uniqueness can increase demand among some consumers as the price of a product increases. Second, we show that while the desire for uniqueness leads to higher prices and firm profits, a desire for conformity leads to lower prices and profits. Third, we find that consumers purchase high quality products not because of their desire for uniqueness, but despite it. Finally, marketers of conspicuous goods might find it beneficial not to highlight the functional differences among their products, when the need for uniqueness is high. In a laboratory test, we find support for the claim that demand for a product among consumers who desire uniqueness might increase as its price increases. 1 1
The set of associations consumers have about a brand is an important component of brand equity. In this article, we focus on reference groups as a source of brand associations, which can be linked to one's mental representation of self to meet self-verification or self-enhancement goals. We conceptualize this linkage at an aggregate level in terms of self-brand connections, that is, the extent to which individuals have incorporated a brand into their self-concept. In 2 studies, we show that brands used by member groups and aspiration groups can become connected to consumers' mental representation of self as they use these brands to define and create their self-concepts. Results from Experiment 1 show that the degree to which member group and aspiration group usage influences individual self-brand connections is contingent on the degree to which the individual belongs to a member group or wishes to belong to an aspiration group. In Experiment 2, we found that for individuals with self-enhancement goals, aspiration group brand use has a greater impact on self-brand connections; for individuals with self-verification goals, on the other hand, member group use has a greater impact.
Supply relationships and e-auctions are complementary procurement forms that specialty coffee roasters can utilize when designing a procurement strategy. We model the roasters’ optimal choices of procurement strategies using an extended newsvendor model. By comparing the optimal strategies in a benchmark case solely based on relationships to a case in which auctions can be utilized, we derive the impact of e-auctions on the procurement quantity and profit under conditions of demand uncertainty. The two stage model predicts that the adjustment of procurement using e-auctions is most beneficial under market circumstances of high demand variability and small firm size. We use industry data to illustrate the market conditions for specialty coffee and discuss the potential impact of e-auctions on procurement strategies for specialty coffee based on our model. The theoretical propositions in conjunction with current industry data suggest that e-auctions have great potential to become an integral part of and shape roasters’ procurement approaches in the specialty coffee market.
Woodruff’s detailed discussion of the meaning and measurement of customer value and how companies can use customer value information
in designing their strategies makes a major contribution to marketing theory and practice. It provides an insightful synthesis
of the literature on customer value and points out why and how current theory on the subject should be strengthened. It also
offers suggestions for companies to foster customer value learning and incorporate it as a cornerstone of their competitive
strategies. The primary objectives of my commentary have been (1) to critically examine Woodruff’s contributions and highlight
unresolved issues requiring further investigation and (2) extend Woodruff’s contributions by proposing and discussing a detailed
framework for monitoring and leveraging customer value. In addressing these objectives, I have attempted to raise questions
and offer suggestions—some of which are necessarily tentative—in the hope that they will stimulate additional interest, debate,
and research on the topic.
A postal survey study of factors correlated with consumer debt investigated several psychological variables which have been suggested as causes or effects of debt. The survey was conducted with the help of a public utility company, and questionnaires were sent to three groups with different debt histories over the preceding two years: Non-Debtors (no debt to the company), Mild Debtors (late payment to the company), and Serious Debtors (sued for debt recovery by the company). Economic and demographic factors predicted debt category well, supporting previous results. Further variance between groups was accounted for by people's money management skills and facilities, by measures of their time horizons, and by aspects of their consumer behaviour. Non-debtors had more money management facilities (e.g. bank accounts) than debtors, and rated their abilities at money management more highly. Debtors had shorter time horizons than non-debtors. Debtors were more likely to buy cigarettes and Christmas presents for children than non-debtors. No group differences were found for attitudes to debt or locus of control. There were significant group differences for measures of economic socialization, social comparisons, use of credit, and other aspects of consumer behaviour, but these differences were not independently significant on multivariate analysis. Conclusions must be qualified because of low return rates, but the results suggest that a complex of psychological and behavioural variables affect debt and are affected by it. It is argued that these variables are linked to the psychology of poverty.
Three hundred British parents completed a long questionnaire on their attitudes to, and behaviour concerning, pocket-money allowances for their children. This study focused, through multiple regressions, on the demographic and psychographic predictors of specific attitudes. As has been established in previous studies, results indicated that most parents (88.4%) were in favour of pocket-money schemes; they should begin around 6 years-old (6.65 yrs); there is a near-linear relationship between child's age and amount received; that saving should be encouraged but that borrowing and lending from other children discouraged. They clearly approved of the establishment of clear rules around pocket money (when received, what to do when it ran out). Attitude statements were factor analysed to produce clear interpretable factors. These factor scores plus the answers to specific questions served as the dependent variable in a series of regressions which has four sets of independent variables pertaining to individual participants: demographic variables (sex, age, education, income); beliefs (religious and political); “money-pathology” score; and a measure of “money smarts” (parental allowance style) that assessed appropriate money-related behaviours. Political beliefs, parental “money pathology” and “money smarts” (which is a measure of parental authority with respect to allowances) were related to attitudes to child socialisation rather than actual (self-reported) behaviours. Results are discussed in terms of parental socialisation styles.