Measuring Consumers' Willingness to Pay. Which Method fits best?

Gauging the maximum willingness to pay (WTP) of a product accurately is a critical success factor that determines not only market performance but also financial results. A number of approaches have therefore been developed to accurately estimate consumers’ willingness to pay. Here, four commonly used measurement approaches are compared using real purchase data as a benchmark. The relative strengths of each method are analyzed on the basis of statistical criteria and, more importantly, on their potential to predict managerially relevant criteria such as optimal price, quantity and profit. The results show a slight advantage of incentive-aligned approaches though the market settings need to be considered to choose the best-fitting procedure.

“Therapeutic Advertising”: When Do Female Consumers Really Benefit?

This research examines whether female consumers benefit from brand strategies that attempt to decrease their self-discrepancies by setting more realistic ideals (i.e., therapeutic advertising, such as Body Shop, Aerie, and Always). The results of our preliminary study reveal that therapeutic advertising leads to stronger self-conscious emotions than idealistic advertising. More specifically, it leads to stronger emotions of both pride and shame. However, the latter only holds true for female consumers low in self-liking and high difficulties in abandoning unattainable goals. Female consumers who like themselves and are able to abandon unattainable goals do not feel more ashamed when being exposed to therapeutic advertising compared to idealized advertising. These findings have implications for marketing managers and policy makers.

How Should Consumers’ Willingness to Pay Be Measured? An Empirical Comparison of State-of-the-Art Approaches

This study compares the performance of four commonly used approaches to measure consumers’ willingness to pay with real purchase data (REAL): the open-ended (OE) question format; choicebased conjoint (CBC) analysis; Becker, DeGroot, and Marschak’s (BDM) incentive-compatible mechanism; and incentive-aligned choice-based conjoint (ICBC) analysis. With this five-in-one approach, the authors test the relative strengths of the four measurement methods, using REAL as the benchmark, on the basis of statistical criteria and decision-relevant metrics. The results indicate that the BDM and ICBC approaches can pass statistical and decision-oriented tests. The authors find that respondents are more price sensitive in incentive-aligned settings than in non-incentive-aligned settings and the REAL setting. Furthermore, they find a large number of “none” choices under ICBC than under hypothetical conjoint analysis. This study uncovers an intriguing possibility: Even when the OE format and CBC analysis generate hypothetical bias, they may still lead to the right demand curves and right pricing decisions.

Cross-Cultural Differences in Luxury Consumption: an Empirical Comparison between Japanese and Swiss Consumers

On the background of the global rise of luxury consumption, the importance of knowing cross-cultural luxury consumption preferences grows accordingly. We investigate cross-cultural specifics of luxury consumption for two cultures, Switzerland and Japan, which clearly differ along Hofstede’s five cultural dimensions (Hofstede 2013). Using these dimensions as a conceptual background, we conduct qualitative interviews with luxury consumers from both cultures and derive propositions concerning the meaning of these dimensions for luxury consumption.

A double-edged sword: How perceived variety and perceived choice difficulty jointly determine consumers’ satisfaction with a customized product

High variety assortments are a double-edged sword. On one hand perceiving large variety is attractive, on the other hand choosing from it can cause perceived choice difficulty. Using mass-customizations tools our two studies show how both antipodal processes jointly determine consumers’ satisfaction with the customized product.

An (un) healthy poster: When environmental cues affect consumers’ food choices at vending machines

Environmental cues can affect food decisions. There is growing evidence that environmental cues influence how much one consumes. This article demonstrates that environmental cues can similarly impact the healthiness of consumers’ food choices. Two field studies examined this effect with consumers of vending machine foods who were exposed to different posters. In field study 1, consumers with a health-evoking nature poster compared to a pleasure-evoking fun fair poster or no poster in their visual sight were more likely to opt for healthy snacks. Consumers were also more likely to buy healthy snacks when primed by an activity poster than when exposed to the fun fair poster. In field study 2, this consumer pattern recurred with a poster of skinny Giacometti sculptures. Overall, the results extend the mainly laboratory-based evidence by demonstrating the health-relevant impact of environmental cues on food decisions in the field. Results are discussed in light of priming literature emphasizing the relevance of preexisting associations, mental concepts and goals.