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In two experiments, this empirical research examines consumers’ willingness to pay and the likelihood of purchase decisions by thoroughly investigating the neural, behavioral, and psychological properties of packaging design. A general theory is tested by functional magnetic resonance imaging (fMRI) and a NeuroPricing online survey on consumer behavior using the example product Tassimo. Hypotheses are tested with 592 German consumers who evaluated the packaging of Tassimo coffee. A closer look at the neural data from the brain imaging experiment shows that uncertainty can arise among consumers with regard to sustainable packaging and this can have a negative impact on the purchase decision and willingness to pay. The results from both experiments show that it is not possible to make a holistic statement as to which sustainable or enjoyment-focused packaging design increases the likelihood of a purchase decision or the willingness to pay. Implications for future packaging design research and underlying complexities with sustainable packaging are discussed.
Growing environmental awareness, especially among young generations, is reflected in the willingness to accept price premiums for sustainable and recyclable products. In recent years, marketers have focused on reinforcing consumers’ attention and interest in green goods by increasing the effectiveness of various sustainability information on product packaging.
In this thesis, an analysis of variance (ANOVA) investigated the effect of visual and verbal recycling claims on product packaging upon the willingness to pay (WTP). Although findings showed no changes in WTP related to a visual claim, the presence of a verbal claim positively impacted the WTP in two of four cases. Further, significant interactions between the two factors were detected. The results suggest that students considered an imagery seal irrelevant during product evaluation, whilst communicating recycling information with a textual message or with a conjunction of both claims showed a tendency to improve price-value perception. However, results for the verbal and interaction effects showed variations across products. Therefore, one may not draw unequivocal assumptions from the findings of this study without research replication on a larger scale.
An Empirical Investigation of the Effect of Packaging Design on Consumers' Willingness to Pay
(2021)
This study sheds light on the extent to which high-quality aesthetic packaging can positively influence consumer choice and raise willingness to pay at the point of sale. In two separate parts, we measure purchasing decisions and willingness to pay by contrasting high- and low-quality packaging of a pullover and a vodka bottle.
Findings show that, compared to cheap and standardized designs, visually appealing packages can significantly raise willingness to pay for a product. Besides, packaging design is crucial when consumers buy the product as a gift rather than for self-consumption. This research provides evidence that beautifully designed packages can positively influence consumer choice at the point of purchase. However, packaging can only influence purchase decisions within a specific price range. If prices are too high and above the individual’s accepted price limit, packaging cannot convince consumers to buy the product. Further, our investigation shows that consumers’ age, gender, educational level, and occupational status can be related to their package choices. The late adulthood, men, and individuals with higher education and professional status are likely to spend more on attractively packaged products than other demographic groups.
The demand for sustainable products has risen noticeably throughout the last years. For this reason, credence labels have gained enhanced importance, as customers use them as indicators for product quality. A rich body of literature investigated the effect of labels on product quality perception, but findings on label effects are still rather controversial. While researching the effects of labels on the one hand, previous studies tend to neglect other important influences on quality perception on the other hand. This paper examines the role of retailer formats and the presence of quality labels on consumer willingness to pay (WTP). For this purpose, a total of 400 participants received a monetary incentive to execute a novel survey based on neuroscientific assumptions, in an attempt to identify the impacts of credence labels in supermarkets and discounters on customer WTP. The results indicate that the magnitude of prices can influence reaction times and hence show that reaction times offer researchers an effective parameter to determine customer WTP. The presence of labels on food products was found to positively influence quality perception in a significant manner. A significant difference between the retailer formats, as well as a potential interaction between the two factors related to WTP, could not be detected. In conclusion, general assumptions about the label performance within distinct retailers should not be made. The results, however, indicate that the subject offers a promising topic to conduct further research in.
Pricing is an essential element when it comes to marketing and selling goods and different price promotions are widely used tools to attract and retain consumers. However, the expected positive impacts of such price promotions on consumer perceptions have been increasingly questioned in recent years. In particular, with regard to quality perceptions and internal reference prices, a number of past research findings suggest that monetary price promotions might be more likely to result in unfavourable consumer perceptions than non-monetary promotions (Diamond & Campbell, 1989; Darke & Chung, 2005). Instead of only focusing on the short-term effects of different promotion methods, the aim of this study is to examine the long-term effects of the use as well as the choice of price promotions on consumers’ value perceptions. Using an internet-based survey, subjects’ long-term willingness to pay for three non-durable consumer goods (a pack of pasta, a toothpaste and a basic t-shirt) was investigated under the following three conditions: the post-promotional phase of a "buy one, get one free" offer, the post-promotional phase of an economically equivalent 50% discount and a situation in which no price promotion was applied at all. For the consumer non-durable pasta, the results suggested that consumers’ value perceptions would be significantly influenced by whether or not a price promotion was previously applied and if so, which one. Furthermore, for the noodles, the findings seemed to corroborate the hypothesis that consumers' willingness to pay is highest in the absence of any previous promotion. Surprisingly, no significant difference was found between the post-promotion phase of the discount offer and the post-promotion phase of the BOGOF offer for any of the three products. All in all, this research provides some meaningful insights on the potential long-term impacts of price promotions on consumers’ value perceptions and willingness to pay. Moreover, our findings could be of particular relevance for managerial decisions regarding the marketing of non-durables in the grocery sector.
The endowment effect shows that selling prices are higher than buying prices (Kahneman et al. 1990). This paper wants to answer the question whether the endowment effect can be reversed and the value perception for the sellers can be lower than the one of the customers. To answer the question two studies were executed where sellers and customers were asked to tell their willingness to pay or rather their willingness to accept. The product for the studies was a wedding dance course, customers were potential participants, sellers the dance schools/ teachers offering the course.
The results show that customers were willing to pay a much higher price than what sellers found was as an appropriate price. Sellers were accepting a much lower price. The endowment effect was reversed for this product. Reasons were the high involvement of the customer and the missing loss aversion on the part of the seller. However, the reasons show that it might not be possible to reverse the endowment effect for every product on the market.
Sustainable product offerings in food retailing have been increasing in the last years, making their way from specialized stores to mainstream food retail stores. It is the case of Germany in which sustainable food products are found in many retailing channels, even discounters. Many pieces of research have been focusing on the bio- and fair-trade labels effect on consumers' behavior, and increased interest has been put in the effect it has regarding WTP towards food products. These studies tend to conclude in a higher WTP towards sustainable labeled food products. However, the studies focus only on the valuation of the product qualities and leave the retailer format aside, which is the location where the product and the labels are being displayed and evaluated by the customer. This research will focus on assessing if the retailer format influences consumers WTP towards bio and fair-trade labels in the German food retail market. In total, 400 randomly selected participants answered one of four surveys regarding WTP towards food products in different retailer formats. Two retailer formats are considered discounters and supermarkets. This research analyses if the labels are performing adequately throughout all food retailing formats in order to provide valuable information for the future of sustainable consumption and regulation. In the end, we cannot conclude a statistically significant difference through the analysis of variance of the means of the label performance in both retailer formats.
How value is perceived has a large influence on the purchase decisions of customers. Previous studies have focused mainly on the value perception of customers, but which role does the value perception of a seller play and what impact does it have on a sales conversation? Is the value of a product or service perceived equally by the seller and the customer or is there a significant difference?
In this research we will specifically focus on the tourism industry and find out how sellers and customers perceive the value of a package holiday. A total of 50 sellers and 100 customers participated in our survey and the results show, that there is a significant difference in the perceived value of the offered package holiday between sellers and customers. The sellers tend to perceive value lower than the customers and in addition, the sellers’ value perception is characterized by a lower variability. Furthermore, when it comes to estimating how the other side perceives value, our results show the opposite of what the respondents expected.
This research has the potential to provide an insight into the mind of the sales person and lead to a better understanding of sales psychology.
Sales promotional tools are of significant importance in attracting potential customers and retaining current customers. We can already have access to many studies in examining and comparing the causes and effects that different sales promotional strategies could bring to various aspects, such as, sales, brand name and brand loyalty. Several researches have also explained the irrational buying decisions and behaviors consumers have when they are given framed promotional message. Researches have shown that, in many cases, consumers tend to go for a free offer (bonus pack) instead of a discount offer although the economic value is equal. It is also shown by previous studies from students of Hochschule Furtwangen University have concluded that in Germany, for non-durable goods, consumer’s willingness to pay is higher with BOGOF offer then that of discount’s. They have also conclude that the effects that promotional tools could bring are long term by designing the survey with situation that the promotion has expired. It is known that BOGOF is preferred over discount, but how good is BOGOF compared to when there is no promotion given? And are there any changes in consumer’s perception towards product’s quality with different promotion applied? This study will be focusing on two promotional strategies: discount and BOGOF in the non-durable goods industry in Europe and in China. There will be a Baseline Test and an A/B survey. A total of 1061 participants were randomly selected to participate in an online survey. The questions of the Baseline Test are under a situation with no promotion, while A survey’s questions are under a situation of ended discount and B surveys are under a finished BOGOF offer. The survey results indicated that, both in Europe and China, the willingness to pay for non-durable products in BOGOF offer is higher than that of the discounts, while the baselines are close with the result of discounts. This study has the potential to contribute to academics and marketers in the non-durable goods industry as it consolidates previous findings and provides insights of the relationship between baseline and promotional tools.