Sujay Dutta

Regret from Postpurchase Discovery of Lower Market Prices: Do Price Refunds Help?

Consumer regret can result in unfavorable outcomes for marketers. To prevent regret, many retailers promise to refund money to consumers who discover lower prices after purchase. The authors show that a refunds effect on felt regret depends on how consumers view these promises. If consumers mainly view them as protective tools (i.e., adopt a protection focus), postrefund regret is minimal. If consumers primarily view such promises as sources of information about the retailers price status (i.e., adopt an information focus), regret persists even after refund. The authors show that regret persists with these consumers because finding a lower price results in a perception of trust violation. They find that subject to boundary conditions, using a disclaimer that states that the retailer does not claim to offer the lowest prices helps avoid this negative outcome for information-focused consumers. The authors contribute to the literature on outcome reversibility and regret by showing that outcome reversal does not necessarily obviate regret. In addition, they show that regulatory focus serves as the motivational basis for how consumers view refund promises.

Individual effects of product quality signals in the presence versus absence of other signals: differential effects across brick‐and‐mortar and online settings

Purpose – The purpose of this paper is to study the effectiveness of multiple signals. Specifically, the paper investigates how the individual strength of a marketplace signal varies as a function of whether consumers are exposed to that signal alone or in combination with another signal.Design/methodology/approach – The research uses experimental designs to empirically address the research questions. Hypotheses are formulated primarily based on signaling theory and these hypotheses are tested with laboratory experiments using real consumers.Findings – The key finding is that a signals stand‐alone credibility largely determines whether its individual strength would be diluted or augmented by the coexistence of another signal. Further, when signals with different stand‐alone strengths coexist, the individual strength of the weaker signal is higher than when that signal is present alone. These effects are observed in brick‐and‐mortar and online shopping media.Originality/value – Past research reports mixed...

Psychological influences on customer willingness to pay and choice in automated retail settings: Context effects, attribute framing, and perceptions of fairness

Purpose - – The purpose of this paper is to investigate the influence of price attribute framing and factors such as urgency and perceived price fairness on customer willingness to pay (WTP) in automated retail settings. Design/methodology/approach - – The authors conducted two sets of quasi-experimental scenarios surrounding vending-machine purchase decisions. The first set was analyzed with MANOVA, the second set with choice-based conjoint (CBC) analysis. Findings - – When prices are framed positively (as a discount), customer WTP is higher at high published price levels than it is for unframed or negatively framed prices. The effect on WTP holds whether the reference price range is broad (few large increments) or narrow (numerous small increments). In the CBC scenarios, immediate availability of the product was most influential on choice, followed by price and brand effects. These findings held under conditions invoking both urgency and price fairness. Providing an explanation for higher prices increases perceived price fairness. Research limitations/implications - – Further study might assess the presence or absence of interaction effects in the conjoint scenarios. Practical implications - – Managers should consider transparency in dynamic pricing, particularly when the price change is outside the control of the firm. The conjoint scenario results also offer evidence that dynamic pricing will not impact other marketing-mix decisions for fast-moving consumer goods (FMCG) dramatically (availability at point of purchase and presence in the consumer consideration set remain strong influences on choice). Social implications - – Understanding these effects on WTP could help managers manage perceptions of unfairness and optimize WTP. Originality/value - – A theoretical contribution from this study is that the immediate loss/gain consideration under theories of decision making under uncertainty outweigh considerations such as scarcity urgency or perceived unfairness. Use of conjoint analysis in WTP research, study of dynamic pricing in FMCG setting.

Unfamiliar Brands and Exaggerated Warranty: Is It a Recipe for Success? – Structured Abstract

Unfamiliar brands face the formidable challenge of effectively signaling the quality of their products to consumers. Yet, a current market search reveals that unfamiliar brands attempt to signal quality by offering product warranties. Furthermore, many of these unfamiliar brands offer warranties that are considerably longer than the warranty lengths for comparable products from recognized brands. We label these warranties as exaggerated since they clearly outlive the consumers’ expected period of use for such products (e.g., 10 years warranty on a hoodie).