Consumer Behavior
The study by Royne, Martinez, Oakley and Fox (2012) tests consumer behavior regarding perceptions of pricing and advertising for pro-environmental products: it looks at the effect that products priced with a .99 ending have compared to products with a .00 price ending. The researchers find in their own review of the literature that the latter has a "heuristic" effect on the consumer, who sees that the .00 indicates that the product has "value," while the .99 priced item indicates that it is priced at a bargain. These are the common perceptions that consumers have regarding pricing (Royne, Martinez, Oakley, Fox, 2012, p. 96). However, in their tests, they found that the appeals that price and product have are influenced by "context," and so it is not always the case with consumers that they regard the .00 priced item as being of the higher quality or the .99 item being a bargain (p. 97). They judge the items and their appeals in a contextual manner -- which is a finding, the researchers note, that is supported by Luchs et al. (2010), "who noted that the effectiveness of advertisements with pro-environmental benefits may be context-specific; what is effective for one type of environmentally friendly product may not be effective for another" (p. 97). The context that the researchers found in their study was that "environmental skepticism moderated the relationships between the benefit appeal and perceptions of quality and price" (p. 97). Thus, there were numerous variables impacting the consumer's desire to purchase the product -- price was one, but so too was quality, and environmental safety (as well as the consumer's own skepticism about environmental-friendliness). In short, it is a complex relationship of various factors that interconnect and communicate with one another in the consumer's cognitive processes that determine the end result of purchase.
The study utilizes a two-fold study technique, with the first part of the test dealing with one product and the second part of the test dealing with another. The two factors that are tested in each case are benefit type and price appeal. Benefit type is represented by whether the product has environmental or personal appeal and the price appeal is represented by whether the product is priced with a .00 ending or a .99 ending.
The first product tested was a liquid body wash product advertised as being environmentally friendly. The second product tested was a car wash product.
One of the problems of the study is that it is too narrow in its focus, and does not test for other variables or factors that would surely play a part in a consumer's decision to purchase a product. For example, the researchers state that the liquid body wash is a product typically bought by women and so for the second product they wanted a gender-neutral product that was similar to the first, so they chose a car wash product. Yet gender is not one of the variable studied in the test, and so how impactful gender is on the cognitive processes is undetermined. It could possibly be that there is a significant effect on the cognitive process that results for gender perception. The researchers, however, are only testing their hypotheses regarding the appeal type (environmental vs. personal) and price appeal (quality vs. bargain as identified by odd or even price ending).
The researchers admit in their concluding remarks that the study is limited in the sense that they only tested two products with "relatively low involvement" and that "consumers may not perceive quality in the same way for commodity and luxury goods" (p. 97). Thus, the researchers state that there are even more factors and variables that could impact the decision-making process and that their approach does not produce conclusive results. Other limitations that the researchers identify are the student sample, which "restricts generalizability" and reduces external validity (p. 98). What is significant about the study is that it "is the first study to assess advertising appeals and price endings in the environmental advertising arena" -- however, the results and scope of the project indicate that there are more factors that need to be considered and tested before any real understanding of this arena can be produced (p. 98).
Logic Flow for Hypothesis
The researchers devise several hypotheses for their study. The first hypothesis is: "The perceived quality of an advertised product will be lower when the advertisement uses an environmental benefit appeal than when it uses a personal benefit appeal" (p. 87). This hypothesis is based on the researchers' understanding of Prospect Theory which "suggests that consumers view known personal gains as risk averse and more positive while viewing...
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