Stated Choice Analysis of Conditional Purchase and Information Cue Effects in Online Group Purchase

Group-purchase institutions, a type of Internet shopping website, allows consumers to aggregate their demands for a product to gain discounts in purchase price. Modeling consumers’ bidding behavior in this institution using the economic perspective of constraint, expectation, and preference interactions, we study two group-purchase mechanisms (i.e., conditional purchase and information cue) on a buyer’s purchase choice across competing group-purchase alternatives. Using a conditional purchase mechanism, a buyer is not obliged to commit to the purchase if the best price is not met (i.e., the final offered price is greater than the best available lowest price). Through the information cue, a buyer could obtain information on the current number of orders collected. We analyzed a set of laboratory experimental data based on a group-purchase institution using the stated choice method. We find that a buyer is more likely to buy through group-purchase when a conditional purchase mechanism is provided. However, providing more information does not necessarily alleviate buyer uncertainty and inertia. The presence of information cue does induce them to choose a riskier but cheaper group-purchase option. In such cases, the choice elasticity of a risky group-purchase option is more sensitive to the information cue than to the conditional purchase mechanism

Willingness to Pay for Imported Beef and Risk Perception: An application of Individual-Level Parameter

The controversy surrounding the Mandatory Country-of-Origin Labeling (COOL) has attracted research attentions. A number of studies have reported consumers are willing to pay more for beef labeled with U.S. origin versus beef from unknown or other origins. Despite that, relatively little is known about what motivates consumers’ preference for origin-labeled food products (Lusk et al 2006). Using Individual-Level Parameters following a mixed logit model, we found that U.S. consumers were willing to pay significantly less for imported steak from Australia and Canada compare to U.S. steak. Further, we found that the negative willingness to pay is associated strongly with consumers’ perception of food safety on the exporting country.beef, country of origin, mixed logit, individual-level parameters, stated choice experiment, Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Marketing, Q13, Q18,

A De-biased Direct Question Approach to Measuring Consumers' Willingness to Pay

Knowledge of consumers' willingness to pay (WTP) is a prerequisite to profitable price-setting. To gauge consumers' WTP, practitioners often rely on a direct single question approach in which consumers are asked to explicitly state their WTP for a product. Despite its popularity among practitioners, this approach has been found to suffer from hypothetical bias. In this paper, we propose a rigorous method that improves the accuracy of the direct single question approach. Specifically, we systematically assess the hypothetical biases associated with the direct single question approach and explore ways to de-bias it. Our results show that by using the de-biasing procedures we propose, we can generate a de-biased direct single question approach that is accu-rate enough to be useful for managerial decision-making. We validate this approach with two studies in this paper.Comment: Market Research, Pricing, Demand Estimation, Direct Estimation, Single Question Approach, Choice Experiments, Willingness to Pay, Hypothetical Bia

Methodological Guidelines for Advertising Research

In this article, highly experienced advertising academics and advertising research consultants John R. Rossiter and Larry Percy present and discuss what they believe to be the seven most important methodological guidelines that need to be implemented to improve the practice of advertising research. Their focus is on methodology, defined as first choosing a suitable theoretical framework to guide the research study and then identifying the advertising responses that need to be studied. Measurement of those responses is covered elsewhere in this special issue in the article by Bergkvist and Langner. Most of the frameworks are derived from the authors\u27 own published work, although other frameworks are noted where appropriate

Buying behavior of consumer towards branded apparel in Norway

Masteroppgve International Business and marketing - Nord universitet 201

Buying under Pressure: Purchase Pressure Cues and their Effects on Online Buying Decisions

Although purchase pressure cues (PPC) that signal limited time (LT) or limited product availability (LPA) are widely used features on e-commerce websites to boost sales, research on whether and why PPCs affect consumers’ purchase choice in online settings has remained largely unexplored. Drawing on the Stimulus-Organism- Response (S-O-R) model, consumer decision-making literature, and prospect theory, we conducted a controlled lab experiment with 121 subjects in the context of Deal-ofthe- Day (DoD) platforms. We demonstrate that while LT pressure cues significantly increase deal choice, LPA pressure cues have no distinct influence on it. Furthermore, our results show that perceived stress and perceived product value serve as two serial mediators explaining the theoretical mechanism of why LT pressure cues affect deal choice. Complementary to these results, we provide evidence that higher perceived stress is accompanied by significant changes in consumers’ physiological arousal. Further theoretical and practical implications of our findings are discussed

Canadian consumers' functional food choices : labelling and reference-dependent effects

The growing interest among consumers in the link between diet and health makes functional food one of the fastest growing sectors in the global food industry, especially functional dairy products. Understanding consumer choices with respect to functional food is an important and relatively new research area. Given the credence nature of functional food attributes, labelling plays a key role in allowing consumers to make informed choices about foods with enhanced health attributes. In 2007, Canada launched a review of the regulatory system for health claims on functional foods, which included rules concerning the approval, labelling and verification of health claims. In 2010 two new health claims related to oat products and plant sterols were approved by Health Canada. An analysis of how consumers respond to health claim information is therefore timely. This thesis focuses on examining the effects of different types of labelling and verification of health claims on consumers stated preferences for a specific functional food product, Omega-3 milk. The analysis incorporates reference-dependent effects. This study improves the knowledge of Canadian consumer understanding of health claims and the impact of health claims on consumer choice. This research is one of the first studies to simultaneously examine the effects of different types of health claims (e.g. function claims, risk reduction claims and disease prevention claims) and other ways of signalling or implying health benefits (e.g. symbols) on Canadian consumers' functional food choices. This study contributes to the knowledge in this domain by providing a comparative analysis of different types of labelling strategies. The extant knowledge of labelling effects in the formats of risk reduction claims, disease prevention claims and symbols or imagery on functional foods is limited. One of the primary contributions of this study is addressing this gap in the literature. The theoretical framework of this thesis is based on random utility theory. A stated preference choice experiment is designed to examine consumers' response to Omega-3 milk under different labelling scenarios. Using data from an online survey of 740 Canadians conducted in summer 2009, discrete choice models, including Conditional Logit, Random Parameter Logit and Latent Class models, and Willingness-To-Pay (WTP) values are estimated. The results suggest that full labelling (function claims, risk reduction claims and disease prevention claims) is preferred over partial labelling (e.g. the use of a heart symbol to imply a health claim), but primarily for risk reduction claims. There is no significant difference between a function claim, such as "good for your heart" and partial labelling in the form of a red heart symbol. The results also suggest that consumers on average respond positively to verification of health claims by government and the third party agencies, however, the Latent Class models reveal considerable heterogeneity in consumer attitudes toward the source of verification. The influences of key-socio-demographic (e.g. income, education and health status) and attitudinal factors (e.g. attitude, trust and knowledge) provide further insights into consumer responses in the choice experiment to identify different consumer segments. Moreover, the results reveal reference-dependent effects where perceived losses of ingredient or price attributes have a greater influence on consumer choice than perceived gains. In terms of industry and public policy implications, this study suggests that food manufacturers in Canada would benefit from the ability to make more precise health claims. The implications derived from the Latent Class Models could help the Canadian functional food industry to identify target consumer segments with different characteristics for the purpose of developing marketing strategies. Furthermore, the results of this study suggest that Canadian consumers are receptive to both full labelling and partial labelling. It indicates that public policy makers need to pay attention to effectively regulating health claims for functional foods so as to balance the need for credible health claims to facilitate the development of the functional food sector with the imperative of protecting consumers from misleading health claims. Public policy makers should also be aware that the verification of health claims plays an important role in reducing consumers' uncertainty and making health claims more credible

Willingness to Pay for Country-of-origin Labeled, Traceable, and BSE-tested Beef

While previous studies have investigated country-of-origin effect from various angles, it remained unexplored the extent to which Country of Origin Labeling (COOL) affects U.S. beef imports from specific countries. Using choice-experiment data, willingness to pay (WTP) for Australian, Canadian beef in addition to other enhancement attributes were estimated with a Mixed Logit Model and a Latent Class Model. The results revealed unobserved taste heterogeneity and important differences in the WTP between the imported and domestic steak. The Latent Class Model estimated the range of discount needed for consumers to switch from U.S. to Canadian steak was a range from $1.09 to$35.12 per pound. Results from the Mixed Logit Model reiterated strong domestic preference. Significant positive WTP for BSE-tested, traceable, and tenderness-assured beef were also observed. In addition, perceived risk theory was utilized to explain the difference in WTP for domestic and imported beef. The psychometric method proposed in Pennings et al. (2002) were adopted, which disentangled perceived risk into risk perception and risk attitude. Using a mixed logit model with error component specification, the result revealed a strong link between risk perception and risk attitude towards consumer choice of country-of-origin labeled beef. Specifically, we found that perceived risk factors have a stronger impact on imported beef than domestic beef, which could partially explain consumers’ aversion towards imported beef. Lastly, the perceived risk framework was expanded to explain variation in the WTP for traceable and BSE-tested beef. The results indicated significant and non-linear impact from risk attitude and risk perception to WTP for the attributes. In addition, BSE-concern, and perceived level of control agribusiness has on food safety significantly influenced WTP for traceable and BSE-tested beef

Perceptions of expertise : a determinant factor on the acceptance of user-designed products

the traditional paradigm of innovation in which consumers are merely buyers, firms are increasingly drawing on their user communities to conceptualize new products. Innovation scholars acknowledge this process as beneficial for both firms and observing consumers (consumers not involved in the conceptualization process). However, some caveats were made regarding the expertise of users when conceiving products that are either complex, luxurious or when knowledge about technical details such as materials or components is needed. This research aims to investigate whether observing consumers perceive users (vis-à-vis professional designers) to possess enough expertise to design products ideated around technical and functional details. Additionally, two moderators of this effect are studied: observing consumers’ uncertainty avoidance beliefs and perceptions of similarity these have towards the creators of new products. We conducted an experimental study using two design modes: products designed by users or by firms’ professionals. The data have been collected in MTurk measuring participants’ perceptions of expertise and purchase intentions. The results show that consumers prefer professionals’ input for these products due to higher perceptions of expertise (that also lead to higher quality perceptions). Additionally, we find that this preference is exacerbated for high uncertainty-avoiding consumers and that expertise perceptions mediate purchase intentions differently depending on the perceptions of similarity that observing consumers have towards the creators of a product. This study adds to the innovation literature by showing that consumers’ involvement in NPD is not universally beneficial and that uncertainty avoidance beliefs and perceptions of similarity are two critical boundary conditions