Fare Well with Fair Conditional Discounts

Threshold price promotions require spending at least a stated amount, such as “$5 off on orders of $10 or more.” Capped promotions set a maximum monetary eligibility amount, such as “50% off, up to $5 per order.”
     Researchers at The Hong Kong Polytechnic University, University of British Columbia, and Singapore Management University conducted a set of studies about these promotion types in order to better understand consumer reasoning about them.
     For the consumer, capped promotions are economically superior to threshold promotions until their spending reaches the promotional trigger value, after which the two promotion types are economically equivalent. The researchers say we might be surprised their study participants preferred threshold promotions over capped promotions for relatively small-dollar discount offers.
     The explanation is twofold. First, the high percentage number in most capped promotions—such as 50%—leads consumers to perceive more promotional benefits than the actual small monetary benefit they receive—such as $5. Second, a low spending threshold—such as “on orders of $10 or more”—leads consumers to perceive a small discount—such as $5—as relatively large by comparison.
     When trigger values clearly exceed the shopper’s usual spending for the item type, consumer reasoning changes: Shoppers then tend to see capped promotions as better than threshold promotions, as they objectively are. Underpinning this consumer reasoning across item type, price promotion type, amount of discount, and whether the discount is stated as money or percentage is the degree to which the shopper considers a transaction to be equitable and profitable for all parties.
     The full set of study outcomes resulted in the researchers advising that if quickly gaining market share is your top objective, offer a threshold promotion with a low trigger value or a capped promotion with a high trigger value.
     Further, in my email exchange with Shangwen Yi, the lead researcher, he wrote, “For capped promotions, a smaller percentage can be better received by consumers than a larger one. We found that 20% appears to be the sweet spot, but this result is context-specific. It’s based on a food ordering setting with typical spending patterns and a $3 cap. If the cap were increased to $10, for example, I’d expect the optimal percentage to rise to a larger value, such as 30% or 40%. Set the percentage around the ratio of the cap amount to consumers’ usual spending in that shopping context.”

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Increase Purchase Quantities with Discounts 

Set Moderately High Purchase Thresholds 

Keep Discount Conditions Strict Enough

Entice Older Shoppers to Prize Bigger Sizes

I’ve heard the quip attributed to different people. The special significance it carries for me comes from it being attributable to my beloved father-in-law when in his late 90’s. He treasured driving to the neighborhood Grocery Outlet to shop for himself, but when that wasn’t possible, he’d instruct us, “Don’t buy me any green bananas.” If asked why, he’d quip, “I hate to think of the bananas going to waste because I died before they ripened.”
     Researchers at Newcastle University, Monash University, University of New South Wales, and Hong Kong Polytechnic University document more of this thinking. A group of consumers ages 18-25 years and a group of consumers ages 60 years and above were asked how likely they’d be to purchase a bottle of hand soap on sale. For some of the participants in each age group, the promotion was on price: 25% off the regular price. For the others, the promotion was on product volume: 25% more soap for the same price.
     With the price-based promotion, both groups expressed about the same degree of purchase interest. With the product volume promotion, older participants expressed significantly lower purchase intention than did younger participants. Evidence is this was due to older participants feeling they had limited lifespan ahead.
     A 25% price discount amounts to less price per ounce than does a 25% increase in volume. Maybe the older consumers in the study were acting wisely without knowing it. However, getting the greater volume might be the better choice for the elderly adult. Shopping becomes more of a burden as we age, and having larger quantities could decrease the frequency of shopping transactions. As long as the elderly shopper has room to store the package and the merchandise is not highly perishable, we could be doing a service by encouraging purchase of a larger quantity at the same price.
     Moreover, selling larger package sizes benefits the retailer. The researchers note prior studies finding that price-based promotions often lower the consumer’s perception of quality, while volume-based promotions increase perceptions of longer product value.
     Based on their findings, the researchers suggest some techniques to nudge older shoppers toward prizing product volume promotions. These derive from the idea of sharing consumption of the purchase with others, which satisfies the desire for socialization among older adults. Suggestions include offering “Buy One, Get One for Free” and labeling the container “Party Size.”

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Help Seniors to Shop Early 

Media-Chat with Seniors 

Serve Singular Satisfaction

Spew Healthy Eating into the Pews

Church picnickers are poisoning their bodies faster than are company picnickers.
     That thought came to mind as I digested a report from researchers now at La Trobe University and Monash University about a consumer’s God salience stimulating preference for ultra-processed foods. Long-term consumption of ultra-processed foods like hot dogs and donuts is blamed for negative health consequences like obesity and heart disease.
     The explanation for the effect of God salience is that God is perceived as healing or at least reducing negative consequences on the body. It’s not so much that God will prevent damage as that God will heal the damage. It’s corrective compensation reasoning.
     The set of studies indicates this effect is strongest when a person perceives eating the food as damaging and perceives God’s grace as predictable. The resulting consumption of ultra-processed food depends on the individual considering the ultra-processed food to taste better than a healthier alternative.
     The researchers distinguish between religiosity and God salience. Religiosity refers to holding religious beliefs and engaging in religious practices. God salience refers to the activation of God-related concepts, even in those low in religiosity, through situational exposure to reminders of God. These reminders might include hearing music about God or participating in a church picnic. Because the studies verified the effect of God salience, the potential for increased consumption of ultra-processed foods occurs even in people without an abiding religious faith.
     As I understand it now, those who are thinking about a nurturing God often yield to temptation from the serpent pushing not an apple, but rather an apple-flavored Pop-Tart.
     Along with their report of findings, the researchers note anecdotally how places of worship often serve ultra-processed foods. This seems related to the reduction of inhibitions about eating such foods because of God salience. My thought here is that it also might be because delicious treats attract congregants. Whatever the reasons, the researchers recommend that religious organizations serve healthier foods and encourage people to worship healthy eating.
     It would be best to avoid techniques which preach corrective compensation. Experts at University of Michigan and Nutrition Impact, LLC provide data which enable an educator to claim how eating a hot dog shortens your life span by about 36 minutes and you can reclaim 33 of those minutes by eating a peanut butter & jelly sandwich next time. But eating healthy foods doesn’t generally erase the effects of eating harmful foods.

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Serve Up Benefits Per Serving 

Accept God’s Grace of Consumer Acceptance 

Fence In Consumer Anxiety

Draw Toward Photo Quality in Ads

Among longtime controversies in consumer psychology are when to show a person in ads and if you do show a person, what part of the person to show. Past studies at University of Maryland cautioned about the inclusion of human images in comparative advertising. Including pictures of people using the product led shoppers to start thinking about using the products themselves, and when they did this, they put too much mental energy into thinking about only the recommended product. They forget to pay attention to the comparative advantages, jeopardizing sales.
     However, subsequent studies at University of Bamberg revealed an exception: When a comparative shopping decision is quite complex, having the shopper imagine using the product helps simplify thinking and so facilitates a purchase decision. Include in the ad the item in use by a person the shopper will relate to.
     As to what part of the person to show, there’s some evidence that with graspable merchandise, an image of a hand holding the item—what’s called a brand selfie—works better than does an image of the face of the user—a consumer selfie. The explanation is in the ability of the viewer to imagine themselves holding the item. A human face in the consumer selfie directed thoughts away from the brand, toward the person shown.
     And now researchers at Manchester Metropolitan University, Universidade Católica Portuguesa, and Arab Academy for Science, Technology and Maritime Transport answered another question: In social media advertising, is it better to include a photo-quality image or an illustration-quality drawing of the person?
     The researchers recommend using a photo-quality image when the objective is to create purchase intention. The drawings were found to generate greater enjoyment among viewers. But the photo-quality images generated greater interest and credibility. The researchers’ explanation is that photo-quality images supply a visual richness beyond that of stylized drawings, and the richer information eases ambiguity and facilitates judgment. Of chief interest to marketers is that, compared to ads using drawings, the ads using photo-quality images were found in the studies to result in higher sales.
     Still, as with the stream of research on using representations of people at all in ads, there are exceptions to the overall conclusion: The researchers say that if the primary objectives of an ad campaign are to encourage the viewer to engage with storytelling or gamification, the enjoyment generated by drawings argue in favor of their use.

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Post Brand Selfies in Highly Positive Reviews 

Grasp the Right Preferences of Shoppers 

Fill In Blanks Positively With Consumers 

Differentiate Virtual Social Media Influencers