The impact of context and promotion on consumer responses and preferences in out-of-stock situations
AbstractIn general, consumer preferences depend on the context of a decision situation. This paper highlights the context-dependence of substitution behavior in out-of-stock (OOS) situations and provides evidence for the relevance of promotion as essential driver of customers' OOS reactions. We demonstrate both theoretically and empirically how OOS-induced preference shifts can be explained and predicted using context and phantom theory. In a series of experiments, we show that consumers substitute in accordance to a negative similarity effect, which is reduced for stock-outs of promoted low-involvement FCMGs. If a similar substitute is offered at a reduced price, the effect is enforced. For dissimilar substitutes, we show the contrary. The empirical findings further suggest an augmented probability of purchase postponement and a significant smaller chance of brand switching for stock-outs of promotional products. Furthermore, our study emphasizes outlet switching as a so far uninvestigated OOS reaction and discusses implications for retailers and manufacturers.
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Bibliographic InfoPaper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2011-050.
Length: 48 pages
Date of creation: Aug 2011
Date of revision:
Out-of-Stock; Context Effects; Phantoms; Promotion; Preference Shifts;
Find related papers by JEL classification:
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-22 (All new papers)
- NEP-EVO-2011-08-22 (Evolutionary Economics)
- NEP-MKT-2011-08-22 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- BREUGELMANS, Els & CAMPO, Katia & GIJSBRECHTS, Els, 2005. "Opportunities for active stock-out management in online stores: The impact of the stock-out policy on online stock-out reactions," Working Papers 2005005, University of Antwerp, Faculty of Applied Economics.
- Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, University of Chicago Press, University of Chicago Press, vol. 16(2), pages 158-74, September.
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