Noneconomic Motivations For Price Haggling: an Exploratory Study

Michael A. Jones, University of Alabama
Philip J. Trocchia, University of Alabama
David L. Mothersbaugh, University of Alabama
ABSTRACT - It is assumed that consumers’ primary motivation to price haggle is to obtain a better dollar value for their purchases. This study, however, explores nonfinancial reasons for consumers to price haggle. From depth interviews, we found that consumers may fulfill three primary needs when haggling over price. These are the needs for achievement, affiliation, and dominance. The paper provides implications for retailers and areas for future study.
[ to cite ]:
Michael A. Jones, Philip J. Trocchia, and David L. Mothersbaugh (1997) ,"Noneconomic Motivations For Price Haggling: an Exploratory Study", in NA - Advances in Consumer Research Volume 24, eds. Merrie Brucks and Deborah J. MacInnis, Provo, UT : Association for Consumer Research, Pages: 388-391.

Advances in Consumer Research Volume 24, 1997      Pages 388-391

NONECONOMIC MOTIVATIONS FOR PRICE HAGGLING: AN EXPLORATORY STUDY

Michael A. Jones, University of Alabama

Philip J. Trocchia, University of Alabama

David L. Mothersbaugh, University of Alabama

ABSTRACT -

It is assumed that consumers’ primary motivation to price haggle is to obtain a better dollar value for their purchases. This study, however, explores nonfinancial reasons for consumers to price haggle. From depth interviews, we found that consumers may fulfill three primary needs when haggling over price. These are the needs for achievement, affiliation, and dominance. The paper provides implications for retailers and areas for future study.

Consumers often haggle over price and features in a variety of shopping contexts including appliances, furniture, automobiles, and homes (Evans and Beltramini 1987; Vaccaro and Coward 1993). Attaining better dollar value for their purchases appears to be a primary bargaining motive. However, financial gain may not be sufficient to motivate bargaining behavior in the face of the many costs, both economic and psychological, that accompany the bargaining task (Evans and Beltramini 1987; Pruitt and Carnevale 1993). The importance of noneconomic factors in motivating shopping behaviors has been well-documented (Babin, Dardn, and Griffin 1994; Tauber 1972; Westbrook and Black 1985). Noneconomic factors may also be important in motivating consumers to engage in bargaining. Sherry (1990, p. 26), for instance, states that the essence of bargaining "surely transcendsthe satisfaction of mere economic gain." Increased awareness of these noneconomic motivations may be an important step for retailers in developing appropriate and effective pricing policies, promotional strategies, and salesforce training programs. Retailers who recognize these motivations may increase customer satisfaction by a) implementing optimal pricing policies for their particular clientele, b) promoting the benefits of negotiated pricing policies, and c) altering salesforce behaviors in order to better address customer motivations. We examined the noneconomic motives for consumer price haggling by conducting a series of in-depth interviews with persons who had recently engaged in the process of price bargaining.

BACKGROUND

Haggling has traditionally been discussed in financial terms. Uchendu (1967, p. 37) defines haggling as a rational system of price formation "which aims at establishing particular prices for specific transactions, acceptable to both buyer and seller within the price range that prevails in the market." More recently, Kassaye (1990, p. 53) defined haggling as "an intricate behavior of give and take engaged by buyer and seller in an attempt to establish a price acceptable to both." Although it is clear from these definitions that people haggle over price, the current study examines the noneconomic motivations for consumers to bargain with salespersons.

Prior research has investigated the manner in which individual needs influence consumers’ interpersonal orientations in the bargaining process (e.g., cooperative versus competitive), but has not investigated noneconomic benefits that might motivate consumers to bargain (Chaney and Vinacke 1960; Terhune 1968). For instance, Terhune (1968) designed a study in which subjects dominant in either the need for achievement, affiliation, or power played a series of Prisoner’s Dilemma games. They found that these motives influenced subjects’ behavior in the games. Individuals high in the need for achievement appeared most likely to cooperate while individuals high in the need for power were most likely to seek exploitation. However, since subjects were required to negotiate, the study only measured the bargaining strategies that subjects employed and the financial outcomes that resulted. As such, the subjects’ motivations regarding whether or not they should bargain at all were not considered. Furthermore, while Rubin and Brown (1975) suggest that the personal needs for affiliation, achievement, and power influence bargaining behaviors (such as willingness to cooperate) and attitudes (such as interest in maximizing financial gain), the effects of these needs on individuals’ motivations to bargain were not addressed. Likewise, neither Pruitt (1981), Pruitt and Carnevale (1993), nor Neale and Bazerman (1985), in their comprehensive reviews of negotiation studies, addressed nonfinancial motives for persons to engage in bargaining behaviors.

METHOD

Depth interviews were chosen as the data collection method. According to Strauss (1990), such qualitative methods are appropriate when (a) attempting to uncover what lies behind any phenomena about which little is known and (b) seeking to provide intricate details of phenomena that are difficult to convey with quantitative methods. Additionally, depth interviews are thought to provide more flexibility than the conventional questionnaire approach (Patton 1990) and have been used in numerous consumr studies seeking to understand motivations (cf., Hirschman 1992; Otnes, Lowery, and Kim 1993). We included multiple stage data collection, which was iterative and guided by an emergent design (Lincoln and Guba 1985). As such, the structure of the interview guide changed based on the results of previous interviews. As the interviews progressed, greater attention was focused on emergent themes.

A purposeful sampling technique was employed. This technique selects information-rich cases whose study will provide a comprehensive understanding of the issues (Patton 1990). In the current study, we interviewed individuals who bargained over a substantial purchase within the last two years. In addition, we sought to interview a subset of individuals who either enjoyed to bargain or considered themselves to be particularly good bargainers. Of 38 interviews conducted, 16 fit into this subset. Confidentiality to all participants was assured in order to aid open and honest discussion on the part of the informants.

DATA GATHERING AND ANALYSIS

Each formal interview lasted between 30 and 90 minutes and was audiotaped. A verbatim transcript of each audiotaped interview was produced. Significant ideas and findings were identified in the margins of each interview transcript. The ideas and findings were categorized by content. These categories developed into themes, because they (a) appeared many times, and/or (b) appeared infrequently but carried important analytical impact (Ely, Anzul, Friedman, Garner, and Steinmertz 1992).

In order to ensure accuracy in the interviews, investigator triangulation was employed. This technique involves the use of multiple researchers to study the same research questions (Denzin and Lincoln 1994). Member checks were also conducted after all interviews were completed (Celsi, Rose and Leigh 1993; Denzin and Lincoln 1994). First, all informants were delivered copies of their interview transcripts. They were asked to state whether any remark had been misquoted, and were encouraged to add any comments they felt would enhance the clarity of their previous thoughts. Second, key informants were asked to respond to a series of written follow-up questions based on information received in subsequent interviews with other participants. Third, emergent themes were presented to several key informants and asked if the quotes attributed to them were taken in the proper context of their earlier statements.

RESULTS AND DISCUSSION

The interviews yielded a rich body of data in which several themes emerged. After identifying these themes, it became apparent that the "trio of needs" theory provides an excellent framework for understanding and discussing consumers’ bargaining motives. Psychologists believe that a trio of basic human social needs can be used in explaining the fundamentals of human behavior (Carlson 1990; Schiffman and Kanuk 1994; Terhune 1968). This trio includes the needs for (a) achievement, (b) dominance, and (c) affiliation. It was evident from the results of our interviews that consumer motives for engaging in bargaining behaviors clearly fit into the previously discussed trio of needs; the act of bargaining helps some individuals to satisfy these underlying needs. The following discussion defines these needs and demonstrates their importance in precipitating consumer bargaining behavior.

Need for Achievement

Murray (1938) states that the need for achievement manifests itself when individuals want to accomplish difficult tasks, overcome obstacles, attain high personal standards, and surpass others. Further, individuas who possess a high need for achievement attempt to accomplish difficult tasks as well and as quickly as possible. They also tend to be more self-confident and enjoy taking calculated risks. From our interviews, we uncovered two ways in which the need for achievement manifests itself in bargaining situations: (a) attaining high personal standards and (b) surpassing others.

Attaining High Personal Standards. Some individuals have a need to do everything well. For these people, bargaining behaviors are a manifestation of this need. The feelings that these consumers derive from bargaining are similar to the "smart-shopper feelings" introduced by Schindler (1989). Schindler states that the excitement felt by some consumers when paying a low price is a function of their ego-expressive needs. Similarly, Holbrook, Chestnut, Oliva, and Greenleaf (1984) found that paying a low price on a particular item might lead a consumer to feel proud, smart, or competent. Bargaining can also generate these good feelings. Some consumers generate these feelings by accomplishing the goal of price reduction by using their agent, topic, and persuasion knowledge in a beneficial way (Friestad and Wright 1994). Consistent with these thoughts, Sherry (1990, p. 26) states the following: "dickering is linkedto feelings of competence and mastery." These feelings are evident in the following example.

Interviewer: So how do you feel about yourself [when you bargain]?

Informant: I feel good about myself for doing it because I’m doing what I’ve been taught to do. I’m applying my business skills to my personal financial life.

Other consumers attempt to satisfy this need for achievement by working hard for what they believe is right. These individuals, when faced with the feeling that a retailer is trying to take advantage of them, attempt to seek justice by dickering with the merchant. The following response indicates these feelings.

"...kind of the innate sense of what’s right-not getting ripped off. It’s not so much the $15 that you’re going to get on the dress, it’s knowing that they don’t need to be charging that for that. It’s like 'who do you think you’re fooling?’ This is not worth that. I don’t want to pay that."

Surpassing Others. One outlet in which consumers may demonstrate their superiority is through communicating their expert bargaining skills to others. One informant stated that she asked friends how much they paid for their cars in an attempt to "flaunt" the superior deal she received. Another informant provided a similar sentiment.

"Quite a few guys who had [Ford] Probes asked me how I got it for that whenever I buy a new car I carefully remove the sticker from my window and I photocopy it and keep it in my folder. So the guys who bought the same thing they say they paid more than what I paid."

Some people bargain because they enjoy competition and are determined to win. These individuals often view their participation in bargaining transactions as if they were playing a game. One informant, for instance, equated bargaining with playing poker. As such, he stated that automobile salespeople usually ask him to reveal the price that he is willing to pay. He equated this to "showing his hand" in poker. The following quotations indicate the concept of bargaining as a game in which one participant wins at the expense of his opponent. The first informant expresses the feeling of satisfaction that he derives from winning (or surpassing the competition); the second appears disconsolate when describing the act of paying full price. He equates this to losng (or being surpassed).

"Partly the enjoyment of it [bargaining] is winning the game. Part of the enjoyment is the pleasure that it givesThere is the thrill of victory as well as the 'I saved twenty dollars’In most cases the pleasure is more the motivation [than the price savings]Cjust for the satisfaction of winning. That is why people with a lot of money still do it."

"It’s like a gameIt’s just that feeling that you lost the game [when you pay full price]. Even if you come away with the product you wanted, and you could afford it, you lost the game."

Another informant indicated her pride in "defeating" the auto dealership from which she recently purchased her car. The informant happily related to us that, due to her tough bargaining stance, the salesperson told her at the conclusion of negotiations, "We don’t want to see you around here anymore."

Need for Dominance

The need for dominance (also referred to as the need for power) relates to an individual’s need or desire to control his or her environment (Murray 1938). According to Schiffman and Kanuk (1994, p. 116), "Many individuals experience increased self-esteem when they exercise power over objects or people." The notion that some people bargain in order to feel a sense of power was evident in a number of our interviews. For some, victory in bargaining is viewed as a sign of virility. One informant, for instance, regarded the desire to haggle as a "macho" characteristic, reflecting an exhilarating feeling of power or strength. Similarly, others express a need to dominate their environments through the use of war as a metaphor for their bargaining experiences.

War. Some individuals who are seeking to satisfy their need for power consider bargaining as a war against the salesperson or business. Unlike the informants who expressed the act of bargaining in terms of a friendly game, these individuals revealed an open hostility toward their salesperson "adversary." Consider the strong emotions expressed by this informant.

"My attitude toward car dealerships is they’re out to screw me. I’m not going to go in there and be a jellyfishCa sponge for those people to take advantage of me. They’ve left a bad taste in my mouth. From now on, I’m going to battle. My attitude toward buying a car is more like a fight...A one price policy would mean I automatically lost the fight."

Control. Informants also expressed a need for dominance in terms of a desire to control their environments. Bargaining is one venue in which these individuals can satisfy this need. These informants’ high need for control can be seen in the following passages:

"I seize control. I turn the tables and seize control. I have the money. He [the salesman] wants the money so I make the offer. I determine what I’m going to offer for it. Now if he is unwilling to do that, then I walk out."

"I like being able to be in control of thingsI would say that it plays into my sense of wanting to control the negotiationCto control the situation in other words. As long as you are in control, I think you live with the outcome a lot better no matter what it is."

"The other thing, too, is you’ve got to get to someone who can make a decision [referring to the manager]. You explain what the situation is."

Need for Affiliation

Individuals who are seeking to satisfy their need for affiliation attempt to develop friendships and seek accptance and belonging from others (Murray 1938). The act of bargaining can play an important role in fulfilling consumers’ needs for affiliation. Informants expressed a need for affiliation with three types of audiences. These audiences included (1) the individuals with whom they negotiate such as salespeople, (2) invited purchase pals, including friends and family, and (3) significant others who may or may not be physically present during negotiations.

Company Representatives/Salespeople. Many informants expressed concern with what salespeople think of them. These individuals feel as if salespeople expect customers to bargain and will form negative evaluations of them if they fail to bargain. By engaging in negotiations, they believe that they are more likely to find acceptance by sales personnel. This desire for acceptance was evident in the following response.

"If I don’t bargain, those salespeople will laugh at me when I leave because I paid full price."

Purchase Pals. Some individuals bring along friends whom they believe to be effective negotiators in order to assist them in their bargaining. Previous literature has identified such assistants as "purchase pals" (Bell 1967). A number of our informants expressed fond memories of their bargaining experiences with purchase pals. These life experiences produced a sort of "bonding" between friends. The following interview excerpt provides an example.

"I had a friend with me who was kind of my guide who came along with me and helped me bargain. It was my first purchase of a car. My friend had purchased cars before and basically knew a little about cars. He’d been through the process. He kind of knew what to look for. He could tell if some cars had been in accidents or had work done. Personally, I didn’t know what to look for. He went so they wouldn’t take advantage of me. Like he knew what was wrong with the car and he talked the price down...It was nice having him around to help me."

Significant Others. Some people engage in bargaining behaviors in order to be viewed more positively by friends and family. They feel that negotiating over price is a socially desirable practice. These informants expressed such concerns.

"I was able to play 'Big Man Daddy’ in front of my daughters. And they were being impressed. In a way I was putting on a show. And you know daughters, they just think you’re wonderful anyway and when they see you telling the dealer you’re not going to pay that much money and I can remember telling Barbara, "We’ll just let them squirm for a bit."

"[I bargain because I] want to say that I got a good deal on that car. I want to be thought of as a person that wouldn’t throw away her money and doesn’t waste money. It’s more appealing to be thrifty and to spend money wisely."

SUMMARY AND IMPLICATIONS

A plethora of studies have investigated the subject of negotiation. To our knowledge, however, no study has considered the noneconomic motivations that consumers have to engage in retail bargaining. These noneconomic motives can be classified using three basic human social needs: the needs for achievement, dominance, and affiliation. Of those who bargained for noneconomic reasons, some informants seemed motivated to bargain in order to satisfy only one particular need. For other consumers, however, bargaining served to fulfill multiple needs. Clearly, or results indicate that, to some consumers, bargaining is more than just a "necessary evil."

Implications for marketing managers are numerous. Since some consumers receive noneconomic benefits from bargaining, retail managers and manufacturers should carefully consider their decision before implementing and promoting a "no haggle" policy. Some consumers who buy goods and services without the opportunity to negotiate may be less satisfied with their purchase experiences. Salesforce behaviors should therefore be modified to reflect these customer needs. For instance, a salesperson who can recognize and react to his client’s need for dominance can alter his sales presentation by yielding on particular issues. From a promotional standpoint, advertising may reflect the need for achievement by promoting consumers’ sense of victory that they associate with successful bargaining.

Future research should investigate the characteristics of individuals who derive the greatest satisfaction from bargaining. These characteristics might include demographic, personality, and cultural variables. Future studies should also investigate the importance of each of the trio of needs as they relate to bargaining. For instance, is the need for achievement the primary motive for most consumers to engage in bargaining? If so, does it supersede the other motives? Research should also address the issue of consumer attitudes toward bargaining. How do different types of consumers feel about the bargaining process in general?

We believe that this emergent research stream can provide valuable insights to practitioners who are interested in maximizing their customers’ shopping enjoyment. Given the lack of attention in the consumer literature regarding individuals’ motivations to bargain, we believe that this exploratory study provides a useful starting point for future academic research.

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