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Price-quality heuristic correlation with rates of product consumption
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.). (INDEK)
2016 (English)In: British Food Journal, ISSN 0007-070X, E-ISSN 1758-4108, Vol. 118, no 3, 541-559 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – The purpose of this paper is to explore the manner in which the rate of product consumption contributes to the formation and strengthening of the price-quality heuristic. Design/methodology/approach – The research included a literature review with a series of tests across a sequence of blind and sighted tasting experiments involving 278 subjects assessing seven differently priced products of orange juice, coffee and wine. Findings – The paper found evidence that consumption rates do affect the way consumers respond to price information and that sight-based “System 1” judgement errors accrue and increase progressively with consumption. This relationship was observed to be stronger in sight-based product assessments for consumption of four or more units per week compared to those consuming one unit per week. For blind-based product assessments, an inverse relationship between price affect and consumption was observed, with affect reported to be stronger for minimal rates of consumption. Originality/value – The observation of sight-based and blind-based affect relationships which are dependent on the levels of product consumption appears to be an interesting advancement in consumer behaviour research. This provides support for a dual structure of rationality operated by an interconnection between “System 1” sight-based associations and “System 2” blind-based ponderous thinking. The paper further provides support for Kahneman’s “conflation of intuition” as classically conditioned memory.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2016. Vol. 118, no 3, 541-559 p.
Keyword [en]
Decision making, Price-quality heuristic, Product consumption
National Category
Other Social Sciences not elsewhere specified Economics and Business
URN: urn:nbn:se:kth:diva-186298DOI: 10.1108/BFJ-03-2015-0101ISI: 000374136500004ScopusID: 2-s2.0-84959378545OAI: diva2:926791

QC 20160510

Available from: 2016-05-09 Created: 2016-05-09 Last updated: 2016-05-18Bibliographically approved
In thesis
1. Understanding the provision and processing of information for information-intensive products as a basis for market segmentation
Open this publication in new window or tab >>Understanding the provision and processing of information for information-intensive products as a basis for market segmentation
2016 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis helps to address the gap in literature relating to the study of the provision of information to consumers, consumer information search behaviour and consumer information processing and choice behaviour relating to information-intensive products. Throughout the thesis, wine is taken as an example of an information-intensive product. Through a series of four published papers in peer reviewed journals, the thesis examines how firms can control and manipulate the provision of information to consumers and that by restricting the availability of information, the firm can make its target consumers want the product even more. Although secrecy has existed for centuries, as a marketing tool it is relatively new and little is understood about its power or purpose in marketing strategy. The thesis also analyses how consumers process information relating to information-intensive products using mental shortcuts, or heuristics, to substitute price for product quality at increasing rates of product consumption. Finally, the thesis provides a new way in which to segment the luxury wine market based on consumer knowledge together with the timing of consumption.

The thesis provides a number of interesting advancements in marketing and consumer behaviour research. The first advancement examines whether secret wine societies are actually that secret at all and finds that they are not; however this finding does not absolve the need for marketers to use secrecy as a marketing tool. The second advancement provides insight into advertising, blogs and consumer innovativeness and finds a positive relationship between attitude toward advertising and consumer innovativeness. The third advancement finds evidence that consumers’ process information by using the price-quality heuristic, for both sighted and blind tasting experiments. Furthermore, the study finds that blind tasting (deliberate thinking) reinforces sighted tasting (automatic thinking) which contributes to judgement errors about product quality. The fourth advancement is to provide a new way to segment the luxury wine market based on consumer objective knowledge, frequency of consumption and timing of consumption.

Place, publisher, year, edition, pages
KTH Royal Institute of Technology, 2016. 324 p.
TRITA-IEO, ISSN 1100-7982 ; 2016:07
Information-intensive products, consumer information search, consumer information processing, marketing strategy, wine marketing
National Category
Other Social Sciences not elsewhere specified
Research subject
Industrial Engineering and Management
urn:nbn:se:kth:diva-186353 (URN)978-91-7595-971-9 (ISBN)
Public defence
2016-06-09, F3, Lindstedsvägen 30, Stockholm, 15:17 (English)

QC 20160518

Available from: 2016-05-18 Created: 2016-05-10 Last updated: 2016-05-30Bibliographically approved

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