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The impact of context and promotion on consumer responses and preferences in out-of-stock situations

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  • Nicole Wiebach
  • Jana L. Diels
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    Abstract

    In 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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    File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2011-050.pdf
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    Bibliographic Info

    Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2011-050.

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    Length: 48 pages
    Date of creation: Aug 2011
    Date of revision:
    Handle: RePEc:hum:wpaper:sfb649dp2011-050

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    Related research

    Keywords: Out-of-Stock; Context Effects; Phantoms; Promotion; Preference Shifts;

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    1. 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.
    2. Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, University of Chicago Press, vol. 16(2), pages 158-74, September.
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