Special Session Summary It’S More Than the Money! Hedonic and Symbolic Responses to Monetary and Non-Monetary Promotions

Citation:

Pierre Chandon and Scott Neslin (1998) ,"Special Session Summary It’S More Than the Money! Hedonic and Symbolic Responses to Monetary and Non-Monetary Promotions", in NA - Advances in Consumer Research Volume 25, eds. Joseph W. Alba & J. Wesley Hutchinson, Provo, UT : Association for Consumer Research, Pages: 55-56.

Advances in Consumer Research Volume 25, 1998      Pages 55-56

SPECIAL SESSION SUMMARY

IT’S MORE THAN THE MONEY! HEDONIC AND SYMBOLIC RESPONSES TO MONETARY AND NON-MONETARY PROMOTIONS

Pierre Chandon, University of North Carolina at Chapel Hill

Scott Neslin, Dartmouth College

OVERVIEW

Much of the research on sales promotions has been devoted to measuring the effects of sales promotions on when, what and how much consumers buy. Building on economic theory, these models assume that consumers are only motivated by the desire to save money or to obtain other rewards that have financial value. As a result, while we have a good understanding of consumer purchase behavior in response to a price promotion, we still know surprisingly little about how they feel when they buy a brand on promotion and what it means to them. These are two dimensions that can clearly influence their immediate and long-term attitude toward promotions and promoted brands.

This session investigated the hedonic and symbolic dimensions of monetary and non-monetary promotions and their influence on consumers’ attitude and behavioral response to sales promotions. This topic is of interest to a growing numbers of scholars and marketers since it provides some insight into several ongoing promotion puzzles which are difficult to explain from a purely economic perspective. Such questions are: "Why do consumers react more to sales promotions than to similar price reductions?", "What are the effects of sales promotions on brand equity?", or "How do consumer react to non-price promotions?"

The session began by presenting a framework of the multiple utilitarian and hedonic benefits of sales promotions as well as some experimental evidence showing that taking into account the various benefits of sales promotions helps better predict when monetary and non-monetary sales promotions are most effective (Chandon, Laurent and Wansink). In the second paper, Darke and Dahl provided further experimental vidence showing that consumers like bargains even when they result in no personal financial gain. In the third paper, Forehand examined how consumers form an impression about the intentions of the marketer of the promotion and how these attributions influence their attitude toward the promotion and the promoted brand. Finally, Brian Tietje showed how marketers can design promotional games which are less likely to undermine brand equity.

Finally, after complimenting the studies presented in the session for investigating non-monetary promotions, Scott Neslin offered specific comments and highlighted some areas for future research. Among these, he called for a comparative analysis of the short and long term effects of monetary and non-monetary promotions, noting that, if non-monetary promotions tend to be less effective than monetary promotions in the short term, they may be less detrimental for brand equity in the longer term. He also recommended that future research examine the concept and measurement of fairness. He pointed out some inconsistencies in the notion of fairness since, if the reference price is the fair price, fairness itself cannot explain why consumers prefer an even lower price.

 

BEYOND SAVINGS: THE MULTIPLE UTILITARIAN AND HEDONIC BENEFITS OF SALES PROMOTIONS

Pierre Chandon, University of North Carolina at Chapel Hill

Gilles Laurent, Groupe HEC

Brian Wansink, University of Illinois at Urbana-Champaign

Why do consumers respond to sales promotions? While monetary savings are often assumed to be the primary benefit of sales promotions, Chandon, Laurent and Wansink proposed that sales promotions can provide consumers with six different benefits: savings, quality, convenience, entertainment, exploration and self-expression. The authors then presented the results of a measurement study providing support for the multi-benefit model of sales promotions over a unidimensional solution based purely on monetary benefits. They also showed that the first three benefits (savings, quality and convenience) are three facets of a higher-order utilitarian function of sales promotions while the last three (entertainment, exploration and self-expression) are three facets of a higher-order hedonic function of sales promotions.

These authors then showed that each of these six benefits is a significant predictor of consumers’ overall evaluation of monetary and non-monetary promotions. However, their results also showed that monetary promotions (e.g., coupons and temporary price reductions), are predominantly evaluated on the basis of their utilitarian benefits while non-monetary promotions (e.g., free gifts and sweepstakes), are predominantly evaluated on the basis of their hedonic benefits.

Finally, the authors presented experimental evidence from two studies in France and in the US showing that taking into account the benefits of sales promotions helps better predict how their effectiveness varies across product categories. Building on a functional congruence hypothesis, they hypothesized that monetary promotions are more effective for utilitarian products while non-monetary promotions are more effective for hedonic products. These hypotheses were supported in a series of choice experiments in which subjects had to choose between a brand with a monetary promotion and another with a non-monetary promotions in different utilitarian or hedonic product categories. Overall, this research shows that sales promotions, like brands, can have an intrinsic value for consumers beyond the monetary savings that they offer.

 

SYMBOLIC ASPECTS OF GETTING A BARGAIN: EFFECTS ON PERCEIVED FAIRNESS AND PURCHASE SATISFACTION

Peter R. Darke, University of British Columbia

Darren W. Dahl, University of British Columbia

This study investigated the effects of getting a bargain in an experimental field setting. Using an experiential consumption perspective (Hirschman and Holbrook 1982), it was roposed that bargains are associated with symbolic value, in addition to the utilitarian benefits of saving money. To test this idea, Darke and Dahl examined whether getting a bargain would increase satisfaction with the purchase even when the only rewards available were nonfinancial in nature. Further, this study examined whether satisfaction with a bargain was related to symbolism concerning the perceived fairness of the offer.

Darke and Dahl tested these hypotheses using an experimental field study in which participants bought a movie video in a real store, using money provided by the experimenter. Some subjects were then offered a discount while others paid the regular price. In addition, some were allowed to keep the change left after making their purchase, while others returned the money to the experimenter. Their results supported both ideas. Consumers enjoyed large bargains more than no bargain even when there was no possibility of financial gain, suggesting that the mere experience provided a source of satisfaction with the purchase. In addition, consumers used bargain size to infer the fairness of the price offer, which mediated the effects of bargain size on satisfaction. Overall, their work extended the experiential consumption perspective to include the idea that symbolism is also an important aspect of sales transactions. The findings also provided direct support for the basic tenets of Transaction Utility theory (Thaler 1983).

 

AN INFERENTIAL PRIMING MODEL OF PROMOTIONAL RESPONSE

Mark R. Forehand, University of Washington

This study examines the role of inferences about marketer intent in consumer response to non-monetary promotional rewards. Building from Bem’s (1972) self-perception theory, previous research on promotions has proposed that a promotion can degrade a brand’s image if consumers attribute their previous purchase of the brand to the promotion rather than to the inherent worth of the brand (Scott 1976; Scott and Yalch 1978; Tybout and Scott 1983). In his presentation, Forehand proposed that the long-term impact of promotions is moderated by the consumer’s beliefs about the intentions behind the promotion. Consumer beliefs about the marketer intent are then hypothesized to influence promotional response by priming the consumer to reach different attributions about his or her own previous behavior.

Forehand examined the effects of two principal beliefs consumers may possess about the intentions behind the promotion: increasing sales of the promoted product or increasing trial usage of the promotional reward itself. He argued that, under the former belief, consumers attribute their behavior to the promotional reward, which diminishes their response to the promoted product and improves their response to the promotional reward. Under the latter belief, he expected no changes in response to the products.

After specifying the theoretical pre-conditions for self-perception processes to occur, Forehand tested the inferential priming model in a series of simulated shopping experiments in which consumers were exposed to real promotional bundles that included a main product and a "free" add-on product. Results revealed an interaction of promotion and belief in which promotion lowered attitudes toward the promoted product when consumers possessed a sales incentive belief, but not when consumers possessed a trial usage belief. No systematic changes were observed in consumer response to the promotional reward.

 

HARNESSING THE INFORMATIONAL ASPECTS AND INTRINSIC REWARDS OF PROMOTIONAL GAMES

Brian Tietje, University of Washington

This presentation addressed one of the most important issue regarding sales promotions: their impact on product evaluations and repurchase intentions after the incentives are withdrawn. Using the tenets of Cognitive Evaluation Theory (Deci 1975) and empirical results from social psychology and consumer behavior,this study proposed that promotional games can be designed to yield positive short and long term effects. Specifically, Tietje argued that promotions which diminish consumers’ perceptions that marketers are "controlling" their behaviors (less salient controlling aspect), and which maintain and enhance consumers’ sense of self determination and competence (more salient informational aspect) will reinforce, rather than undermine, both short and long term attitudes and behaviors.

Tietje reported the results of an experimental examination of promotional games (e.g., sweepstakes) and of their influence on consumer attitudes and behaviors. After highlighting the distinctive characteristics of these probabilistic incentives which may alter or attenuate these self perception effects, he showed that sweepstakes have a positive impact on intrinsic motivation, operationalized as product evaluations following actual product experience.

REFERENCES

Bem, Daryl (eds) (1972), Self-Perception Theory. New York: Academic Press.

Deci, E. L. (1975), Intrinsic Motivation. New York: Plenum Press.

Hirschman, Elizabeth C. and Morris E. Holbrook (1982), "Hedonic Consumption: Emerging Concepts, Methods and Propositions," Journal of Marketing, 46 (Summer), 92-101.

Scott, Carol A. (1976), "The Effects of Trial and Incentives on Repeat Purchase Behavior," Journal of Consumer Research, 13, 263-269.

Scott, Carol A. and Richard F. Yalch (1978), "A Test of Self-Perception Explanations of the Effects of Rewards on Intrinsic Interest," Journal fo Experimental Social Psychology, 14, 180-192.

Thaler, Richard (1983), "Transaction Utility Theory," Advances in Consumer Research, 10, 296-301.

Tybout, Alice and Carol A. Scott (1983), "Availability of Well-Defined Internal Knowledge and the Attitude Formation Process: Information Aggregation Versus Self-Perception," Journal of Personality and Social Psychology, 44 (3), 474-491.

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