The Effect of Customization Strategy and Recommendations on Consumer Decision-Making

Brent Coker, University of Melbourne, Australia
Anish Nagpal, University of Melbourne, Australia
Partha Krishnamurthy, University of Houston at Texas, USA
To ease the effort required to make choices when customizing products for purchase, marketers frequently offer a recommendation. Little is known about the impact recommendations have on customized choices. In this research, we suggest the effect the recommendation level has on the final configured product depends on the starting point of customization. In three experiments, we demonstrate how a recommended option level significantly influences the final choice when customers are given a base option and allowed to trade-up (building-up strategy), but does not influence final choice when given the maximum level option and allowed to trade-down (paring-down strategy). The dominance of features over price in influencing purchase decisions leads to more saliency of the recommendation in the paring-down strategy than in the building-up strategy. This leads to a shift of reference point from base attribute to recommended attribute in the building-up strategy, but not in the paring-down strategy. These findings have implications for marketers offering customized product options, and shed light onto conditions of reference point shift when decision making.
[ to cite ]:
Brent Coker, Anish Nagpal, and Partha Krishnamurthy (2010) ,"The Effect of Customization Strategy and Recommendations on Consumer Decision-Making", in NA - Advances in Consumer Research Volume 37, eds. Margaret C. Campbell, Jeff Inman, and Rik Pieters, Duluth, MN : Association for Consumer Research, Pages: 461-462 .