Attitudes and Promotions

Ayelet Gneezy, University of Chicago
EXTENDED ABSTRACT - I study how a gift with a restriction attached affects receivers’ behaviors and attitudes toward the giver. Specifically, I look at a minimum purchase restriction in promotional coupons. Most promotional offers include some kind of restriction, and it is important to know the effect of different configurations of promotions. In previous work, it has been shown that in social contexts, people not only care for what they are given but also care for why it was given (e.g., Ames, Flynn & Weber, 2004). It seems that this is also the case in the market context when the gift is a coupon; consumers care for the outcome (e.g., price), but also for the motivation that is driving the promotion, and the wider implications the promotion has on them, on other consumers and on the specific stores/marketers (Kahneman, Knetch & Thaler, 1986a, b; Campbell, 1999a, b; Darke & Dahl, 2003; Brehm, 1966; Labroo & Isen, working paper).
[ to cite ]:
Ayelet Gneezy (2005) ,"Attitudes and Promotions", in NA - Advances in Consumer Research Volume 32, eds. Geeta Menon and Akshay R. Rao, Duluth, MN : Association for Consumer Research, Pages: 485-486.

Advances in Consumer Research Volume 32, 2005     Pages 485-486

ATTITUDES AND PROMOTIONS

Ayelet Gneezy, University of Chicago

EXTENDED ABSTRACT -

I study how a gift with a restriction attached affects receivers’ behaviors and attitudes toward the giver. Specifically, I look at a minimum purchase restriction in promotional coupons. Most promotional offers include some kind of restriction, and it is important to know the effect of different configurations of promotions. In previous work, it has been shown that in social contexts, people not only care for what they are given but also care for why it was given (e.g., Ames, Flynn & Weber, 2004). It seems that this is also the case in the market context when the gift is a coupon; consumers care for the outcome (e.g., price), but also for the motivation that is driving the promotion, and the wider implications the promotion has on them, on other consumers and on the specific stores/marketers (Kahneman, Knetch & Thaler, 1986a, b; Campbell, 1999a, b; Darke & Dahl, 2003; Brehm, 1966; Labroo & Isen, working paper).

In a series of three studies, I look at the effect a minimum spending restriction has on peoples’ behaviors and attitudes. The results suggest that the economic value (i.e. the actual discount) does not necessarily dominate consumers’ consideration set. Drawing on the existing literature, I propose that in some cases, giving something and adding a restriction will be perceived as unfair by the recipient. This perception of unfairness, in turn will translate to a less favorable attitude toward the deal and the store, and will manifest itself in both explicit and implicit measures of attitude, as well as in actual behavior.

In study 1, participants received restricted (minimum $20 purchase) or unrestricted $10 coupons to be used at the university’s book store. The results show that an unrestricted coupon may indeed be superior to a restricted coupon in terms of redemption rate, spending behavior and attitude towards the store (measured before the study, and 3 weeks after it ended). Studies 2 and 3 were run in the lab and were aimed at better understanding the underlying process driving the results. Both studies used a coupon similar to the one used in Study 1. Study 2 shows that the two promotional offers produced significantly different fairness perceptions; an unrestricted promotion is perceived to be significantly fairer than the restricted one. A mediation analysis revealed that fairness perceptions of the offer are actually driving peoples’ likelihood to use them. In addition, willingness to have future interactions with the store was significantly higher with the unrestricted offer and was also mediated by fairness perceptions. Another important result of Study 2, gives rise to the possibility that participants inferred ulterior motives on the side of the store (as observed from analyzing thoughts listing items as reported by participants). Although both studies elicited negative thoughts listing, these thought listings were significantly higher with the restricted offer. One "concern" raised by participants was that the store was tricking them by trying to seduce them to come to the store, and spend on virtually unnecessary items. Study 3 tried to find a factor that would moderate the fairness perceptions as captured by study 2. Following on the above reported thoughts listings (i.e., "they are trying to lure me to the store in order to spend more than I need to"), I chose to use a scenario in which subjects are instructed to imagine they received the coupon while already in the store (with some idea of what they needed to purchase). As predicted, under this scenario, fairness perceptions of the two offers were not statistically different, not were the other measured parameters statistically different. The only exception was the likelihood to use, which was still significantly higher with the unrestricted coupon.

I conclude by proposing that a gift is not enough. A marketer aiming for a gift to result in positive attitudes and desireable behavior should pay special care for factors that might otherwise backfire. People care about fairness and the formations of a person’s fairness perception depends on multiple factors. This paper looked at two such factors: a minimum spending restriction and the circumstances under which the offer is extended. Although this study was done in a consumer choice context, the literature reviewed as well as the theoretical framework proposed give reason to believe that the findings can also be applied to other types of giving (e.g., social context).

Future research will try to further understand the preliminary results presented here. One direction would be an attempt to distinguish between fairness and other factors that may be playing a role. Another direction would be to provide additional empirical evidence to support the long term effect of the positive/negative attitudes induced by the unrestricted and restricted offer, respectively.

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