Special Session Summary Psychological Correlates of Deal Proneness and Deal-Responsive Behavior

Donald R. Lichtenstein, University of Colorado
[ to cite ]:
Donald R. Lichtenstein (1997) ,"Special Session Summary Psychological Correlates of Deal Proneness and Deal-Responsive Behavior", in NA - Advances in Consumer Research Volume 24, eds. Merrie Brucks and Deborah J. MacInnis, Provo, UT : Association for Consumer Research, Pages: 272-273.

Advances in Consumer Research Volume 24, 1997      Pages 272-273

SPECIAL SESSION SUMMARY

PSYCHOLOGICAL CORRELATES OF DEAL PRONENESS AND DEAL-RESPONSIVE BEHAVIOR

Donald R. Lichtenstein, University of Colorado

Much of the empirical research within the sales promotion domain has relied exclusively on behavioral-based scanner data. While this research is valuable in providing estimates of response elasticities to various promotional vehicles, this research is perhaps less equipped to address the psychological motivations and tendencies affecting consumer decision-making. This session brought together several academics who have been active in conducting research designed to provide insights into the psychological mechanisms associated with deal proneness and deal-responsive behavior. The goal of this special session was be to explore the issue of "why consumers respond to deals as they do." Research in this stream attempts to balance perspectives and provide insight into the findings from the scanner-based sales promotion research stream. As such, the goal of all three presentations in this session concerned generating insights into why consumers respond to deals.

 

"PSYCHOLOGICAL CORRELATES OF A PRONENESS TO DEALS: A DOMAIN-SPECIFIC ANALYSIS"

Donald R. Lichtenstein, University of Colorado at Boulder

Scot Burton, University of Arkansas

Richard G. Netemeyer, Louisiana State University

In the first presentation, Lichtenstein noted that in recent years, packaged goods manufacturers have allocated increasing amounts of their promotional budgets towards consumer sales promotions. Consistent with this trend, and aided by the availability of scanner data, academic researchers have paid increased attention to the effects of sales promotions on consumer shopping behavior. Many of these studies have investigated the impact of observable variables such as deal type, frequency, duration, depth, and retraction on deal-responsive behavior.

Lichtenstein stated that while these studies are very valuable in providing estimates of response elasticities to these promotional mix variables, they are limited in at least a few respects. First, because these studies typically only measure overt consumer behaviors, they do not investigate psychological variables which may underlie deal-responsive behavior. Second, researchers conducting these studies often inference from deal-responsive behavior to deal proneness with no independent measurement of the deal proneness construct. As behavior is usually (if not always) multiply-motivated, deal-responsive behavior will have other antecedents (e.g., price consciousness) in addition to deal proneness. Thus, equating deal proneness with deal-responsive behavior results in a confounding of antecedent constructs. Third, much previous research has treated deal proneness as a generalized, rather than domain-specific, costruct. This practice does not allow for the possibility that consumer proneness to deals may depend on the type of deal and that proneness to alternative types of deals may have differing psychological correlates.

Lichtenstein presented findings from two studies which assessed theoretically-based hypotheses for the relationship between several latent domain-specific deal proneness constructs (e.g., display proneness, sale proneness, coupon proneness, rebate proneness) and several psychological variables with consumer behavior implications (e.g., brand loyalty, impulsiveness, need for cognition, price-quality perceptions). As such, the studies reported in this presentation complemented and represented a direct extension of the work of Lichtenstein, Netemeyer, and Burton (1995, December, Journal of Consumer Research). These researchers employed direct measures of a proneness to respond to deals in each of eight domains and related the measures to deal-responsive behaviors assessed unobtrusively in a natural field setting. Lichtenstein et al. (1995) found evidence that the domain-specific deal proneness measures explained differential amounts of variance across deal-responsive behavioral domains in a manner consistent with a domain-specific conceptualization of deal proneness. However, no insights were provided regarding the psychological variables or processes which might differentiate one type of deal proneness from another. To the degree that deal proneness is indeed domain-specific, proneness to alternative types of deals would be expected to have, to some degree, differing psychological correlates. Thus, the purpose of this presentation was to report findings across two studies of grocery shoppers collected from different geographic regions of the country which address this issue. Findings supported the notion that the domain-specific deal prone constructs do have differing psychological correlates.

 

"FRAMING THE DEAL: THE ROLE OF RESTRICTIONS IN ACCENTUATING DEAL VALUE"

J. Jeffrey Inman, University of Wisconsin

Priya Raghubir, Hong Kong University of Science and Technology

Anil C. Peter, University of Southern California

Advertisers and retailers often promote their products using restrictions. For instance, a recent weekly flyer by a prominent retailer limited purchase on fifty percent of the specials advertised on their front page. Academics acknowledge the widespread use of scarcity tactics such as restrictions for gaining compliance. However, there is little research in the trade and consumer promotion literature about the effect of these tactics. While the general role of scarcity has been examined in some depth in psychology, most of the empirical work in this area has either been undertaken with little consideration for how a scarcity tactic would affect choice behavior or has been tested under extreme conditions (e.g., a total ban) that leave unclear the applicability of scarcity theory in the context of promotions for commonly known brands.

While offering the basis for predicting a general positive effect on restrictions on choice probability, commodity theory provides little guidance for understanding the contingencies under which restrictions’ effect may vary. For example, if restrictions serve as a signal of transaction value, the size of this effect should increase as consumers’ ability and/or motivation to independently assess the worth of a transaction using additional information reduces. In attempting to understand the manner in which restrictions work, in the second presentation Inman examineed contextual and individual factors that moderate the effect of restrictions on consumers’ response to sales promotions. Further, the possibility of a mediating effect of an attitude change was examined. Commodity theory does not predict whether this attitude change will be due to an increased evaluation of the deal per se, an increased evaluation of the restricted brand, or both.

Inman presened a theoretical framework to examine how restrictions affect consumer purchase behavior, positing that consumers use them as a source of information while making a purchase judgment. Inman and his colleagues constructed this framework through a series of studies that flesh out the framework and test its robustness along the way. A sales restriction was defined as a tactic that curtails a consumer’s freedom to purchase a market offering. Consumers’ freedom may be curtailed through limiting the quantity which a consumer can purchase (e.g., "limit ___ per customer"), which Inman and his colleagues refered to as a purchase quantity limit; limiting the duration during which a consumer can avail herself or himself of an offer, such as "Offer expires on ___," commonly referred to as a time limit; or instituting a precondition for a consumer to purchase (e.g., "Only available with purchase of ___"), which they referred to as the purchase precondition. They examined the nature of the information contained in a restriction and explored conditions that foster or inhibit its use as a source of information for a purchase-related decision. A restriction may be viewed as a signal containing information about the worth of the transaction, the brand, or other aspects of the market context.

They presented findings from four studies using different methods (i.e., grocery sales data, a simulated grocery store experiment and a survey), samples (i.e., West Coast, Midwest, and Hong Kong) and operationalizations of restrictions (i.e., purchase quantity limit, minimum store purchase, and time limit) consistently demonstrating that imposing a purchase restriction on a promoted brand can increase the restricted brand’s probability of choice. This effect is a function of contextual variables (e.g., price cut) and psychographic and behavioral individual difference variables (e.g., need for cognition, brand usage, and deal proneness). Taken together, they established the nomological validity of the theory that restrictions are a source of information which consumers use to disambiguate deal value, the use of which depends on the availability and diagnosticity of alternative sources of information.

 

"WHEN CONSUMERS SPACE-OUT AT POINT-OF-PURCHASE"

Stephen J. Hoch, University of Pennsylvania

Brian Wansink, University of Pennsylvania

Robert Kent, University of Delaware

Most everyday consumption behavior is incredibly mundane. The stakes are low and characterized by flat optima C- little gained through making the optimal decision; little lost by making even the worst decision; but plenty to be gained by being expedient and getting on with the rest of life. The basic thesis of the third presentation is that once inside the store, there is a segment of consumers who are readily open to reasonable suggestion prompted by promotional deals. In the context of grocery shopping, a suggestion qualifies as reasonable if: (a) the deal prompting the suggestion looks good at first glance and does not appear to increase the effort consumers must expend in moving toward their meta-goal of purchasing all that is needed to make it through each week; and (b) the promotion does not highlight the self-serving, opportunistic goals of the marketer. Hoch presented: (a) the preconditions (internal psychological and external situational) that lead consumers to "space-out" whereby they relinquish attentional control to the marketer and essentially go on automatic pilot; and (b) a series of experiments focusing on operationally exploiting consumer "spacey-ness."

Specifically, Hoch discussed six experiments that examined the viability of increasing multi-unit purchases through supplanting the default internal anchor of "quantity 1" with innocuous looking higher external "anchors." The external anchors appeared at point-of-purchase through: quantity limits (with findings that could not be explained by product scarcity), size of shipping cartons, "x for $1," etc.... Hoch then discussed the viability of sing consumer "spacey-ness" (and the related concept of consumer expertise) as a variable on which to effectively price discriminate. Hoch discussed the implications of his findings for the domains of credit cards and rebates, where the potential for "spacing out" is even greater due to the temporal separation between initial purchase and eventual payment or redemption. Hoch talked about the opportunity to price discriminate toward those consumers who "space out."

 

COMMENTS OF TERENCE A. SHIMP, SESSION SYNTHESIZER

With respect to the first presentation, Shimp noted that the evidence presented is consistent with mounting evidence elsewhere that the term "deal" is very general and that all deals are not equivalent. He agreed with the conclusion of the presentation that theorizing needs to be done at a deal-specific level rather than referring to "deals" in general. However, on the premise that the psychological correlates were more likely to be antecedent states to the domain-specific deal proneness variables, he suggested that it may be more appropriate to use them as the independent variables in the regression analysis and the domain-specific deal proneness variables as the dependent variables, rather that visa-versa as done by the authors.

In commenting on the presentation of Inman et al., Shimp noted that the evidence suggested that purchase quantity restrictions do increase purchase behavior and that, once again, the importance of the variable "need for cognition" seems to affect this relationship. However, as a segue into the third presentation of Hoch, Shimp questioned whether either scarcity theory or anchoring and adjustment could account for this phenomenon. There was much discussion of the implications of these theories for the findings of Inman et al. (and subsequently for the findings of Hoch’s findings in the third presentation). There was debate as to whether these two theoretical accounts were competing or not in the context of these two studies in their ability to account for the effects obtained.

With specific respect to the third presentation, Shimp noted evidence supporting the phenomenon that marketers can encourage larger purchase quanitities by supplying a larger anchor. However, Shimp noted some inconsistency with the second presentation in that a lower quanity limit (implying scarcity) encouraged larger purchases.

Shimp then noted that if larger purchase anchors were effective, why is it the case that not all marketers are using them. Hoch responded, noting that the market was dynamic and further, some marketers "never get the message." After some discussion where members of the audience recognized that, like consumers, marketers can sometimes not pay careful attention to market factors, the session concluded.

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