Abstract

Most past studies modeling consumer decision processes treated the brand of a product as an attribute parallel to the price, color, or size of a product; and as a result, such studies assigned an equal (i.e., non-contingent) importance weight across brands for each attribute. In contrast, the current research presents a multi-level choice model that incorporates a brand-contingent attribute-weighting process, in which brand is a higher-order construct that influences attribute importance. The empirical results using real purchase decision data and survey data from an airline industry show that attribute importance weights are contingent upon two aspects of a brand—the perceived relative position of the brand and consumers’ brand usage experiences. When consumers perceive a brand to be inferior to its competitors in a given attribute, consumers generally place greater weight on that attribute for that brand (i.e., brand-contingent negativity effect). In contrast, when consumers perceive a brand to be superior to its competitors in a given attribute, only consumers with an extensive brand usage experience place greater weight on that attribute for that brand (i.e., brand-contingent positivity effect). By modeling consumer decision processes based on the consumer behavior literature, this research provides managerial insights on brand positioning and segmentation strategies based on consumers’ brand usage experiences.

Keyword

brand ;  brand experience ;  importance weigh ;  modeling consumer behavior ;  negativity effect ;  positioning

Abstract

The present research investigates how purchase motives (hedonic vs. utilitarian) influence the effectiveness of partitioned versus combined pricing. Across four studies, we find that compared to combined pricing, partitioned pricing increases hedonic purchases, but not utilitarian purchases. We find this happens because consumers considering a hedonic purchase tend to feel anticipated guilt associated with their hedonic spending, and partitioned pricing is used as a guilt-mitigating justification for the spending. Specifically, consumers with a hedonic purchase motive underprocess a surcharge, which enables them to perceive the price of the product as lower than the actual, combined price. This lower price perception helps consumers justify their hedonic purchase as an act of saving money, and as a result, alleviates guilt. These effects are magnified among consumers who have high disposition to feel consumption guilt. When a price discount is offered, it attenuates the effectiveness of partitioned pricing because the price discount serves as a more effective justification by offering actual saving, not just the perception of saving. Our findings contribute to the pricing literature by uncovering a motivational factor influencing the effectiveness of partitioned (vs. combined) pricing, and offer a useful pricing guideline to product managers based on the product-pricing fit revealed in our research. (C) 2019 New York University. Published by Elsevier Inc. All rights reserved.

Keyword

Guilt ;  Hedonic/utilitarian motivation ;  Justification ;  Partitioned pricing

Abstract

We propose a brand-contingent weighting model in which attribute-importance is contingent upon (1) the competitive position of a brand, and (2) brand familiarity. Using real flight ticket purchase data, our dynamic multi-level model demonstrates that a consumer assigns different weights to the same attribute across brands, within one decision context.

Keyword