Mauricio Palmeira

The Zero-Comparison Effect

This research investigates the effect of a zero-value attribute on consumer choice. It is argued that a zero attribute removes a reference point that consumers use to evaluate the size of attribute differences. As a consequence, the shift from a number to zero can make an advantage (or disadvantage) that seemed large and clear in the presence of a reference point become less clear and thus less impactful when a reference point is removed. This leads to an interesting effect, whereby an option can improve its choice share by increasing the level of an undesirable attribute from zero or decreasing the level of a desirable attribute to zero. A series of four experiments provide supporting evidence for this new choice phenomenon.

Framing as status or benefits?: Consumers’ reactions to hierarchical loyalty program communication

Purpose - A fundamental aspect of hierarchical loyalty programs is that some consumers get rewards that others do not. Despite the widespread use of such programs, academics have long debated whether these benefits are outweighed by the potential negative impact of the differential treatment of customers. This study extends our understanding, examining the impact of message framing on consumers’ reactions to hierarchical loyalty structures. Design/methodology/approach - Three online studies were conducted. Study 1 uses advertisements to manipulate the message frame’s emphasis (benefits vs. status). Study 2 manipulates consumers’ frame of thought by directing their attention to either changes in benefits or status. Finally, Study 3 uses the proposed framework to reconcile contradictory findings from past research. Findings - Low-frequency customers who do not expect to qualify for a superior customer tier tend to reject hierarchical programs when thinking about status. In contrast, when these customers think about concrete rewards, loyalty program messages produce no negative reactions. High-frequency customers are positively affected by communication regardless of the type of benefits framed. Research limitations/implications - All studies were done online potentially limiting the external validity of the results. Nevertheless, the impact of message framing on perceptions about the loyalty program seems to be quite robust across different studies and manipulations. Practical implications - When communicating with low-frequency customers managers should avoid promising status; customers should instead be motivated based on concrete rewards. High-frequency customers are indifferent to alternative emphasis of communication frames. Originality/value - Marketing academics have acknowledged the importance of being able to reward top customers without demotivating light and moderate users. Our research is the first to provide a solution to this issue.

The interplay of products from the same product line: : the role of brand reputation

Purpose – The main aim of this paper is to examine the role of brand reputation on the impact of value product on perceptions of a premium product from the same brand. As a secondary goal, it tests and extends existing findings from judgment tasks to a choice task. Design/methodology/approach – Two online experiments are presented. In Study 1 (1a and 1b), participants provided quality and price judgments to products. Brand reputation was manipulated by comparing common store brands to non-store brands (Study 1a) and to upscale store brands (Study 1b). In Study 2, we examined whether findings indicating a positive effect of a value store brand on a premium store brand extends to a choice context. Participants made choices between a premium store brand and a national brand in the presence of either a value store brand or a value national brand. Findings – It was found that brand reputation plays an important role in the interplay of products in line extensions. While the positive impact of a value brand on ...

The impact of service failure and recovery on target and observing customers: a comparative study

ABSTRACT This research investigates how target and observing customers react to service failure and recovery. Previous research has focused on the effect of service recovery on target customers. It has been assumed that the reactions of those customers observing the recovery efforts would mirror those of target customers, or perhaps be even more favorable, given that they are not directly affected by the service failure. This research challenges this pre-conception. Through three experiments, this paper shows that often greater recovery efforts are required to improve the evaluation of observing customers than that of target customers. This research explores the reasons behind this counterintuitive finding and concludes with a discussion of its theoretical and managerial implications.

Consumer reactions to professionals who use decision aids

Purpose – The purpose of this study is to investigate consumer reactions to professionals who use decision aids to make recommendations. The authors propose that people react negatively to decision aids only when they are used in place of human expert judgment. When used in combination with expert judgment, decision aids are not perceived negatively and may even enhance service evaluations. Design/methodology/approach – Three online experiments are presented. Participants indicated their perceptions regarding the recommendation strategy of professionals and their impressions of these professionals using one of three strategies: one based on expertise only, one based on decision aids only and a combination of the two (hybrid approach). Both within and between-subjects designs were used. Findings – Contrary to previous research that has found a negative reaction to professionals who use decision aids, the authors find that consumers actually appreciate these professionals, as long as the use of decision aid...