Behavioral Aspects of Pricing

Buyers sometimes exhibit seemingly “irrational” behavior with respect to prices and use socially embedded heuristics to simplify their purchase decisions. In some cases small changes in prices can lead to much larger than anticipated changes in sales and profitability. Sellers need to understand the heuristics consumers use, the situations in which they emerge, and recognize how they can respond in markets where information and knowledge of product attributes and competitive prices is increasingly available via the Internet. This chapter explores consumers’ behavioral reactions to price through a review of contemporary literature in the field of pricing. The chapter delineates the nature and scope of these effects based upon a critical review of the most up-to-date empirical research in the field, and concludes by providing implications for innovation in pricing, and guidance for managers to reduce the disconnect between themselves and consumers

The effect of social media communication on consumer perceptions of brands

Researchers and brand managers have limited understanding of the effects social media communication has on how consumers perceive brands. We investigated 504 Facebook users in order to observe the impact of firm-created and user-generated social media communication on brand equity, brand attitude and purchase intention by using a standardized online survey throughout Poland. To test the conceptual model, we analyzed 60 brands across three different industries: non-alcoholic beverages, clothing and mobile network operators. When analyzing the data, we applied the structural equation modeling technique to both investigate the interplay of firm-created and user-generated social media communication and examine industry-specific differences. The results of the empirical studies showed that user-generated social media communication had a positive influence on both brand equity and brand attitude, whereas firm-created social media communication affected only brand attitude. Both brand equity and brand attitude were shown to have a positive influence on purchase intention. In addition, we assessed measurement invariance using a multi-group structural modeling equation. The findings revealed that the proposed measurement model was invariant across the researched industries. However, structural path differences were detected across the models

News in an era of content confusion: effects of news use motivations and context on native advertising and digital news perceptions

This study examined the effects of differing native advertising framing contexts (hard versus soft news) and individuals’ news use motivations on ability to perceive commercialized content, evaluations of native advertising, and ensuing digital news perceptions. Based upon the framework of the persuasion knowledge model, an online experiment was conducted among a sample of U.S. adults (N = 684). When revealed as advertising, people were more likely to perceive the hard news rather than the soft news framing as commercial in nature. Furthermore, hard news approaches to native advertising were perceived unfavorably by audiences and tarnished the subsequent reporting of actual journalists.Accepted manuscrip

What do they know about me? Contents and Concerns of Online Behavioral Profiles

Data aggregators collect large amount of information about individual users and create detailed online behavioral profiles of individuals. Behavioral profiles benefit users by improving products and services. However, they have also raised concerns regarding user privacy, transparency of collection practices and accuracy of data in the profiles. To improve transparency, some companies are allowing users to access their behavioral profiles. In this work, we investigated behavioral profiles of users by utilizing these access mechanisms. Using in-person interviews (n=8), we analyzed the data shown in the profiles, elicited user concerns, and estimated accuracy of profiles. We confirmed our interview findings via an online survey (n=100). To assess the claim of improving transparency, we compared data shown in profiles with the data that companies have about users. More than 70% of the participants expressed concerns about collection of sensitive data such as credit and health information, level of detail and how their data may be used. We found a large gap between the data shown in profiles and the data possessed by companies. A large number of profiles were inaccurate with as much as 80% inaccuracy. We discuss implications for public policy management.Comment: in Ashwini Rao, Florian Schaub, and Norman Sadeh What do they know about me? Contents and Concerns of Online Behavioral Profiles (2014) ASE BigData/SocialInformatics/PASSAT/BioMedCom Conferenc

Dollar-Off or Percent-Off? Discount Framing, Construal Levels, and Advertising Appeals

In two studies, the authors reveal how consumers react to marketing messages when two commonly used promotional tactics – price discounts and advertising messages – are synergized. Building on construal level theory, Study 1 shows how dollar-off discount framings (“Buy 2, get $10 off”) trigger low-level construal, while percent-off discount framings (“Buy 2, Get 50% off”) activate high-level construal. Study 2 demonstrates that congruent levels are matched when dollar-off discount appeals are paired with attribute appeals and when percent-off appeals are paired with benefit appeals, leading to more effective marketing communications

The effects of disclosure format on native advertising recognition and audience perceptions of legacy and online news publishers

This experiment with a representative sample of US adults (N=800) examines the effects of disclosure design characteristics in sponsored news on readers’ ability to recognize such content as paid advertising, and examines whether such recognition differently affects perceptions of legacy and digital-first publishers. Although fewer than 1 in 10 participants were able to recognize native advertising, our study shows that effectively designed disclosure labels facilitate recognition. However, participants who did recognize native advertising had lessened opinions of the publisher and the institution of advertising, overall.American Press Institut

Measuring consumers' engagement with brand-related social-media content: development and validation of a scale that identifies levels of social-media engagement with brands

The main purpose of this study is to develop a scale to measure consumer's engagement with social media brand-related content. The reported scale (CESBC) comprises three dimensions: consumption, contribution, and creation. Qualitative techniques were used to generate an initial pool of items that capture different levels of consumer engagement with social media brand-related content. Quantitative data from a consumer survey (=2252) was then collected in two phases to calibrate and validate the ensuing scale. Results confirmed the structure and psychometric properties of the CESBC. As expected, each subscale is significantly correlated with nomological network constructs, i.e., brand equity and brand attitudes

The role of customer experience in building brand loyalty within the service context

Customer experience theory, research, and practice represent an evolving area of study within the marketing discipline. Despite its importance, the customer experience concept remains vague and lacks a thorough theoretical foundation. This study addresses this gap in the literature and examines the antecedents and consequences of customer experience from customer perspectives. The study provides a conceptual framework building from a qualitative study and the existing literature. This article includes a formal test of the framework using a large-scale survey of British customers to examine their experience with resort-hotel brands. The results show price perception, core services, and word-of-mouth have a direct impact on how customers interpret their experiences with resort-hotel brands; perceived service quality plays a mediatory role in the relationship between servicescape, core service, and customer experience. Measuring validation strength of customer experience upon brand loyalty by best fit in combination with cross-sample predictive validity models is a valuable contribution of this study

Vodcast Impact on Students\u27 Attitudes and Behavioral Intentions

Purpose: This paper uses structural equation modeling to assess the effectiveness of Vodcasts (video podcasts) as part of a university’s communication strategy with prospective students. Design/methodology/approach: Three theoretical models were tested using a structural equation model. Findings: We find that perceived informativeness, credibility, and irritation of the advertising are directly related to the value of the Vodcast advertising. However of those three factors, only the informativeness is directly related to the intent to take further action toward enrollment. In addition, while prior work has suggested that perceived entertainment of advertising positively influences its perceived value, we find that for these university Vodcasts, perceived entertainment is not a statistically significant factor. Research limitations/implications: The results suggest that for Vodcasts used for these purposes, less attention should be given to entertainment value, and more attention should be focused on providing useful information in a manner that is credible and not irritating to students. Originality/value: Vodcasts have become part of the Internet multimedia experience and have been integrated into universities’ web-based promotion strategies. While prior work has examined general advertising on the web, few studies have considered the impact of the interactive medium of Vodcasts on attitudes and behavioral intentions