Essays on Consumers' Goal Orientation and Price Sensitivity

Abstract

The objective of my dissertation work was to provide a better understanding of consumer choices related to these two important tradeoffs that consumers are often confronted with in the marketplace. Drawing upon regulatory focus theory, I investigated how consumers choose between price and quality or price and quantity, in each of two essays, thereby shedding light on the role of consumer goals in purchase decisions. In the first essay, I propose that quality is predominantly a promotion feature whereas price is predominantly a prevention feature. Therefore, promotion oriented consumers should be more attentive to differences in product quality whereas prevention oriented consumers should be more attentive to differences in product price. Three studies demonstrate that quality (price) is more strongly associated with a promotion (prevention) orientation, that promotion (prevention) oriented consumers prefer products with higher quality (cheaper prices), and that these preferences are mitigated when consumers do not need to prioritize between price and quality and are mediated by relative attention to quality versus price. In the second essay, I investigate the manner in which consumers' goal orientations affect their preferences for monetary versus nonmonetary promotional offers, such as bonus packs and price discounts. I propose that consumers with a promotion (vs. prevention) orientation are more likely to prefer a bonus pack offer over an economically equivalent price discount offer. Two pretests and one study provide empirical support for this key prediction. I also identify theoretically defensible and managerially actionable boundary conditions for this effect that are related to price levels and product types.