Erica Mina Okada and Eric L. Mais
Many market examples show that consumers are willing to pay a premium for “green” products and services. The purpose of this paper is to gain some insight into how consumers…
Abstract
Purpose
Many market examples show that consumers are willing to pay a premium for “green” products and services. The purpose of this paper is to gain some insight into how consumers respond to green alternatives, and examine how managers can best position their green products to maximize the premium consumers are willing to pay.
Design/methodology/approach
A series of behavioral experiments was conducted to demonstrate how the green product's characteristics are framed significantly affects the size of the “green premium” consumers are willing to pay.
Findings
The results show that positive framing (focusing on the advantages of the green product) works best for environmentally conscious consumers while negative framing (focusing on avoiding the disadvantages of the non‐green product) works best for less environmentally conscious consumers. Additionally, subtractive price framing which focuses on the discount consumers would pay for the non‐green product alternative results in a higher green premium than additive price framing which focuses on the additional price consumers would pay for the green choice, and especially so for less environmentally conscious consumers.
Research limitations/implications
Overall, the results suggest that green firms can maximize the green‐pricing premium by careful targeting of consumers and framing their products appropriately.
Originality/value
This paper explores how the difference between the green versus non‐green alternative can be framed in different ways, and interact with the consumer's level of environmental consciousness, to influence the “green premium,”, i.e. how much more consumers are willing to pay for the green alternative relative to a comparable non‐green alternative.
Details
Keywords
Edwin Love, Mark Staton, Christopher N. Chapman and Erica Mina Okada
This research aims to investigate the relationship between consumer regulatory focus and brand value.
Abstract
Purpose
This research aims to investigate the relationship between consumer regulatory focus and brand value.
Design/methodology/approach
Three studies were conducted using both student subject pools and a broader sample from the US population. The relative chronic promotion or prevention orientation of each participant was measured, as was response to brand and pricing stimuli.
Findings
Promotion‐oriented individuals are more sensitive to differences in established brands than prevention‐oriented individuals (studies 1 and 2), and promotion‐oriented individuals have a greater preference for new brands than prevention‐oriented individuals (study 2). Also, an individual's degree of chronic promotion orientation is an important driver of this relationship (study 3).
Research limitations/implications
Brand quality is considered as a general concept rather than a multidimensional construct. Although brand is a largely affective and emotional product attribute, brand trust is a dimension of quality that helps to satisfy prevention goals. A deeper investigation of the relationship between brand trust and prevention goals is recommended for future research.
Practical implications
Firms should consider the status of their brand within their product category. A firm with a relatively high quality brand can aggressively enter new categories early in the category lifecycle. Lower quality brands may benefit more from reinforcing their position in existing categories, or creating new brands for new categories.
Originality/value
This research has important implications regarding the timing and pricing of product upgrades.
Details
Keywords
Edwin Love and Erica Mina Okada
– The purpose of this study is to propose differential marketing tactics for high-quality products versus low-price products by building on construal level theory.
Abstract
Purpose
The purpose of this study is to propose differential marketing tactics for high-quality products versus low-price products by building on construal level theory.
Design/methodology/approach
Two studies were conducted, one using students and another using data collected from more than 7,000 online auctions.
Findings
When consumers consider high-quality products, they use more abstract mental models, and when they consider low-price products, they use more concrete mental models. Differentiation based on primary features product is more effective for products that are positioned on quality, while differentiation based on the secondary features is more effective for products that are positioned on price. Also, marketing efforts to attract attention are more effective for products positioned on quality than those positioned on price.
Research limitations/implications
This research focused on how consumers use different mental models for considering high-quality versus low-price product offerings but did not examine whether a given segment/consumer uses different models in considering high-quality versus low-price alternatives.
Practical implications
Managers wishing to reinforce a high-quality position should focus on marketing efforts compatible with consumers’ high level construal by enhancing and highlighting the primary features, and drawing consumers’ attention to their product offerings. Managers wishing to reinforce a low-price positioning should focus on marketing efforts that are compatible with consumers’ low level construal by enhancing and highlighting secondary features.
Originality/value
This research makes an important theoretical link between construal theory and brand positioning.