Advanced Search
MyIDEAS: Login to save this article or follow this journal

Experimental Evidence on the Negative Effect of Product Features and Sales Promotions on Brand Choice

Contents:

Author Info

  • Itamar Simonson

    (Stanford University)

  • Ziv Carmon

    (Duke University)

  • Suzanne O'Curry

    (DePaul University)

Registered author(s):

    Abstract

    Sales promotions and product enhancements are commonly expected to increase a brand's sales, when they do not negatively impact its utility and cost. That is, the purchase probability of consumers who find the promotion or additional feature attractive will increase, whereas the purchase likelihood of other consumers will not be affected. In contrast, we propose that consumers, who perceive a new feature or promotion as providing little or no value, will be less likely to purchase the enhanced brand even when the added feature clearly does not diminish the value of the brand. Thus, a new product feature or promotion may decrease a brand's overall choice probability when the segment of consumers who perceive it as providing little or no value is large compared to the segment that finds the feature attractive. This prediction was supported in three studies using actual promotions that have been employed in the marketplace (e.g., a Doughboy Collector's Plate that buyers of Pillsbury cake mix had the option to purchase for $6.19). We examined five alternative explanations for this effect. The results suggest that, when consumers are uncertain about the values of products and about their preferences, such features and premiums provide reasons against buying the promoted brands and are seen as susceptible to criticism. We discuss the theoretical and practical implications of the findings for segmentation, product, promotional, and pricing strategies.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://dx.doi.org/10.1287/mksc.13.1.23
    Download Restriction: no

    Bibliographic Info

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 13 (1994)
    Issue (Month): 1 ()
    Pages: 23-40

    as in new window
    Handle: RePEc:inm:ormksc:v:13:y:1994:i:1:p:23-40

    Contact details of provider:
    Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA
    Phone: +1-443-757-3500
    Fax: 443-757-3515
    Email:
    Web page: http://www.informs.org/
    More information through EDIRC

    Related research

    Keywords: brand choice; buyer behavior; product policy; promotion;

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Popkowski Leszczyc, Peter T.L. & Pracejus, John W. & Shen, Yingtao, 2008. "Why more can be less: An inference-based explanation for hyper-subadditivity in bundle valuation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(2), pages 233-246, March.
    2. Soman, Dilip & Liu, Maggie Wenjing, 2011. "Debiasing or rebiasing? Moderating the illusion of delayed incentives," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 307-316, June.
    3. Marianne Bertrand & Dean Karlin & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," NBER Working Papers 11892, National Bureau of Economic Research, Inc.
    4. Raghubir, Priya & Celly, Kirti Sawhney, 2011. "Promoting promotions: Does showcasing free gifts backfire?," Journal of Business Research, Elsevier, vol. 64(1), pages 55-58, January.
    5. Kristina Shampan'er & Dan Ariely, 2006. "How small is zero price? : the true value of free products," Working Papers 06-16, Federal Reserve Bank of Boston.
    6. Kivetz, Ran & Simonson, Itamar, 2003. "The Role of Effort Advantage in Consumer Response to Loyalty Programs: The Idiosyncratic Fit Heuristic," Research Papers 1738r, Stanford University, Graduate School of Business.
    7. Marianne Bertrand & Sendhil Mullainathan & Dean Karlan & Eldar Shafir & Jonathan Zinman, 2009. "What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment," Working Papers 968, Economic Growth Center, Yale University.
    8. Sooyeon Lee-Wingate & Kim Corfman, 2010. "A Little Something for Me and Maybe for You, Too: Promotions that Relieve Guilt," Marketing Letters, Springer, vol. 21(4), pages 385-395, December.
    9. Newman, George E. & Jeremy Shen, Y., 2012. "The counterintuitive effects of thank-you gifts on charitable giving," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 973-983.
    10. Nayga, Rodolfo M., Jr. & Shaw, W. Douglass & Silva, Andres, 2006. "The Effect of Risk Presentation on Product Valuation: An Experimental Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21429, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Larson, Ronald B. & Steinhofer, Kelley, 2005. "Supermarket Selection by Singles in the Midwest," 2005 Annual meeting, July 24-27, Providence, RI 19429, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Liberman, Varda & Ross, Lee, 2006. "Idiosyncratic matching and choice: When less is more," Organizational Behavior and Human Decision Processes, Elsevier, vol. 101(2), pages 168-183, November.
    13. Danijela Mandić, 2009. "Long-term impact of sales promotion on brand image," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 21(2), pages 235-246.
    14. Waller, William S. & Zimbelman, Mark F., 2003. "A cognitive footprint in archival data: Generalizing the dilution effect from laboratory to field settings," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 254-268, July.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:13:y:1994:i:1:p:23-40. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.