Marco Bertini
DBA in Marketing
Dissertation Chair: Profs. J. Gourville and L. Wathieu
Indirect Effects of Marketing Decisions on Consumer Response
This dissertation consists of three essays that investigate the unintended effects of key marketing decisions from pricing, product policy, and branding on how consumers respond to a firm's goods and services.
The first essay examines the framing effect that results when prices are presented either as one all-inclusive expense or partitioned into a series of mandatory charges. Existing evidence suggests that preferences are affected by this price format decision, but the specific direction of the effect remains ambiguous. In this research, I propose a simple psychological mechanism that links price format to the salience of product benefits. Evidence from three studies consistently supports the hypothesis that price format acts as an incentive to process product information and determines how many attributes are accessed at the time of valuation. This parsimonious theory reconciles existing results and contributes to the general notion that pricing may impact perceived value as much as capture it.
The second essay provides evidence that add-ons (condiments, toppings, accessories, extras, etc.) are more than just simple added benefits. In three studies I show that the perceived utility of ordinary consumer goods is influenced by the mere presence (but not the use) of optional features. These results are inconsistent with standard utility theory which predicts that any assessment of base products and add-ons should be separate and independent. Instead, I argue that consumers incorporate information on add-ons - their type, quality, etc. - when evaluating a product and that the ultimate impact (positive or negative) is a function of the type of enhancement provided. From a prescriptive standpoint, these findings highlight the need for firms to be more attentive in managing their product extension decision.
The final essay analyzes the effect of changing an established brand name convention on consumer perceptions of next-generation products. In the first study I show that participants infer the level and type of innovation offered by a next-generation product by the similarity of its name to those of preceding versions. In study 2, I consider the implications of this result for product adoption and willingness to pay, demonstrating that such brand name decisions affect both the perceived benefits (quality, technological sophistication, etc.) and the perceived costs (economic and functional risk, learning, etc.) of a potential purchase. The clear implication for practice is that firms should be mindful of the trade-off between these conflicting factors when determining which naming strategy to follow.
