IDEAS home Printed from https://ideas.repec.org/p/hum/wpaper/sfb649dp2011-021.html
   My bibliography  Save this paper

Customer Reactions in Out-of-Stock Situations – Do promotion-induced phantom positions alleviate the similarity substitution hypothesis?

Author

Listed:
  • Jana Luisa Diels
  • Nicole Wiebach

Abstract

Out-of-Stock (OOS) is a prevalent problem customers face at the POS. In this paper, we demonstrate both theoretically and empirically how OOS-induced substitution patterns can be explained and predicted by means of context and phantom theory. We further analyze the relevance of promotions, for which OOS is most pronounced, as essential driver of differences in customers’ OOS reactions. The results of an online experiment demonstrate that customers substitute unavailable items in accordance to a negative similarity effect which is reduced, however, for OOS items on promotion. The empirical findings further suggest that customers’ OOS responses differ for promoted vs. non-promoted items. We find that customers being affected by a stock-out of promotional products significantly more often postpone purchases and tend to avoid substitution resulting in severe losses for the retailer. However, for non-promoted items, customers easily switch to alternative brands. That way, manufacturers lose profit and possibly loyal customers.

Suggested Citation

  • Jana Luisa Diels & Nicole Wiebach, 2011. "Customer Reactions in Out-of-Stock Situations – Do promotion-induced phantom positions alleviate the similarity substitution hypothesis?," SFB 649 Discussion Papers SFB649DP2011-021, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  • Handle: RePEc:hum:wpaper:sfb649dp2011-021
    as

    Download full text from publisher

    File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2011-021.pdf
    Download Restriction: no

    More about this item

    Keywords

    Out-of-Stock; Context Effects; Phantoms; Promotion; Consumer Decision Making;

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hum:wpaper:sfb649dp2011-021. 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: (RDC-Team). General contact details of provider: http://edirc.repec.org/data/sohubde.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.