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On the Edge of Buying: A Targeting Approach for Indecisive Buyers Based on Willingness-to-Pay Ranges

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  • Dost, Florian
  • Wilken, Robert
  • Eisenbeiss, Maik
  • Skiera, Bernd

Abstract

Targeting the “right” consumers is a core part of marketing. Whereas existing techniques to identify these consumers use demographic or psychographic variables or behaviors such as response probabilities, a proposed new targeting approach builds on consumers’ incremental responses to identify them by their willingness-to-pay (WTP) ranges. These WTP ranges reveal a consumer as a definite buyer, a definite non-buyer, or an indecisive buyer. The proposed theoretical framework indicates that indecisive buyers offer the highest incremental responses to targeted marketing mix activities and thus should be the most preferred targeting group. A sequence of three laboratory experimental studies validates the proposed approach for targeted price discounts and non-price tactics. In addition, a large-scale field experiment involving a consumer engagement campaign that includes observed purchase behavior demonstrates the high external validity and applicability of this approach.

Suggested Citation

  • Dost, Florian & Wilken, Robert & Eisenbeiss, Maik & Skiera, Bernd, 2014. "On the Edge of Buying: A Targeting Approach for Indecisive Buyers Based on Willingness-to-Pay Ranges," Journal of Retailing, Elsevier, vol. 90(3), pages 393-407.
    • Handle: RePEc:eee:jouret:v:90:y:2014:i:3:p:393-407
    DOI: 10.1016/j.jretai.2014.03.007
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    References listed on IDEAS

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    Cited by:

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    2. Dost, Florian & Geiger, Ingmar, 2017. "Value-based pricing in competitive situations with the help of multi-product price response maps," Journal of Business Research, Elsevier, vol. 76(C), pages 219-236.
    3. Robin Gubela & Artem Bequé & Stefan Lessmann & Fabian Gebert, 2019. "Conversion Uplift in E-Commerce: A Systematic Benchmark of Modeling Strategies," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 18(03), pages 747-791, May.
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    5. Juan Pérez & Héctor López-Ospina, 2022. "Competitive Pricing for Multiple Market Segments Considering Consumers’ Willingness to Pay," Mathematics, MDPI, vol. 10(19), pages 1-32, October.
    6. Scholdra, Thomas P. & Wichmann, Julian R.K. & Reinartz, Werner J., 2023. "Reimagining personalization in the physical store," Journal of Retailing, Elsevier, vol. 99(4), pages 563-579.
    7. Gubela, Robin & Bequé, Artem & Gebert, Fabian & Lessmann, Stefan, 2018. "Conversion uplift in e-commerce: A systematic benchmark of modeling strategies," IRTG 1792 Discussion Papers 2018-062, Humboldt University of Berlin, International Research Training Group 1792 "High Dimensional Nonstationary Time Series".
    8. Tuo Wang & Michael Y. Hu, 2019. "Differential pricing with consumers’ valuation uncertainty by a monopoly," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(3), pages 247-255, June.
    9. Ying, Jiahui & Shonkwiler, Vanessa P. & Campbell, Benjamin L., 2018. "Willingness to Pay or Not to Pay: Valuing Foods Some Respondents Find Distasteful," 2018 Annual Meeting, August 5-7, Washington, D.C. 274065, Agricultural and Applied Economics Association.

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