Promotional formats and inaction inertia

2020

MIP

Self Cite

PurposeBased on mental accounting theory, this study explored whether the comparability of missed and subsequent promotional formats/frames affects inaction inertia.Design/methodology/approachFour experiments with imaginary and incentive-compatible designs were conducted to test the hypotheses.FindingsConsumers are more likely to express inaction inertia after having missed a comparable promotion than after having missed a noncomparable promotion. Devaluation of the promoted target mediates the impact of comparability on inaction inertia, while referent others' actions do not moderate the comparability effect. Finally, when consumers accept a subsequent inferior promotion, they prefer using a different payment format because it reduces comparability of the two promotions.Practical implicationsCompanies should use different promotional formats/frames to reduce comparability and inaction inertia when a new promotion is relatively inferior to a recent previous one. Companies should offer different payment options to help customers actively avoid comparing a current promotion with a missed promotion.Originality/valueThis study provides a more comprehensive conceptual structure for understanding the relationship between psychological comparability and inaction inertia. It provides insights into what actions companies should take to reduce inaction inertia. Furthermore, this study empirically tests the influence of multiple comparison referents, which provides a reference point for future studies on the factors affecting inaction inertia. A new method to examine whether consumers actively avoid comparisons is used, which clarifies the internal mechanism of inaction inertia.

Section: Mental Accounting Comparability and Inaction Inertiamentioning

confidence: 99%

Section: Unsolved Questions Of Comparability and Inaction Inertiamentioning

confidence: 99%

Section: Unsolved Questions Of Comparability and Inaction Inertiamentioning

confidence: 99%

See 1 more Smart Citation

Effects of comparability of promotions on inaction inertia

2020

MIP

Self Cite

“…This design more effectively elicits participants’ real preferences. Many studies in the fields of risk and consumer behavior have further developed and modified this procedure (e.g., Curley, Yates, & Abrams, 1986; Liu & Chou, 2018, 2019).…”

Section: Experiments 3: An Incentive‐compatible Designmentioning

confidence: 99%

“…The procedure was adapted from previous studies (Curley et al, 1986; Liu & Chou, 2018). At the beginning of the experiment, all participants were informed that at the end of the experiment two people from each class would be randomly selected to acquire either the chosen product or the monetary equivalent as a prize.…”

Section: Experiments 3: An Incentive‐compatible Designmentioning

confidence: 99%

Payment formats and hedonic consumption

Psychology and Marketing

2020

Payment formats have many important influences on consumer behavior. However, few studies have examined how the payment format affects hedonic consumption. This study explores how the transparency of the payment format (e.g., bonus points vs. cash) influences consumers' willingness to pay, budget assignments, and consumption choices through differences in their perceived pain of purchasing (exchanging) hedonic and utilitarian options. Specifically, consumers who pay with highly transparent payment formats (e.g., cash), compared with consumers who pay with less transparent payment formats (e.g., store points, bonus points, and gift certificates), are willing to pay less, assign a lower budget, and are less likely to choose hedonic products. The perceived pain of purchasing (exchanging) a hedonic product plays an important mediating role on the influence of the payment format on hedonic consumption. However, the perceived pain of purchasing (exchanging) a utilitarian option plays a parallel mediating role only when people have paid for the less transparent payment format (e.g., buying store points) rather than when they accumulate the points through previous consumption events. The research findings provide insights that can benefit both theory and practice.

The effect of different quantity promotion discounts on inaction inertia: The internal mechanisms of perceived closeness and mental accounting

Behavioral Decision Making

Yeh

2022

Inaction inertia is the phenomenon in which people are less likely to accept an opportunity after having previously missed a relatively superior one. Based on previous studies of inaction inertia, psychological distance, and quantity promotions, the current research explores how missing different quantity promotion discounts (multiple discount vs. single large discount vs. single small discount) influences inaction inertia and relevant mediators. The results of three experiments demonstrate a missed quantity promotion with a single small discount (e.g., "buy 3, get 25% off"), compared with a missed single large discount ("buy 5, get 40% off") or a multiple discount (e.g., "buy 3, get 25% off, or buy 5, get 40% off"), inducing higher inaction inertia through enhanced perceived closeness, upward counterfactual thinking, and perceived regret.Compared with missing a multiple-discount promotion, missing a single largediscount promotion enhances inaction inertia. However, the effect is only mediated through the number of upward counterfactual thoughts and perceived regret. These findings indicate perceived closeness, and assignments to specific mental accounts are important internal mechanisms activating inaction inertia.