Journal article
A rose by any other name would smell as sweet? The impact of hierarchical labeling on consumers' choices in tiered pricing plans
Marketing letters, Vol.35(2), pp.259-273
06/2024
DOI: 10.1007/s11002-023-09694-3
Abstract
Companies often use hierarchical labels to describe the products in a choice set (e.g., Bronze/Silver/Gold, or Silver/Gold/Platinum). Does the label of the tiered products influence consumer choices? Through five experiments (totaling 1,954 participants), we find a labeling effect. On the one hand, consumers are more likely to make a purchase (i.e., they are less likely to defer) in the first place with superior-sounding labels. On the other hand, such labels shift choices down towards cheaper-priced products. Further, we find that product labeling moderates the choice share of a middle option such that the well-documented compromise effect diminishes with superior-sounding labels due to the shift towards cheaper-priced options. Our research contributes to the literature on framing effects, choice deferral, and the compromise effect. Our findings suggest companies should use superior-sounding labels if they want to increase overall sales, but inferior-sounding labels when they care more about increasing choices of higher-priced products.
Details
- Title: Subtitle
- A rose by any other name would smell as sweet? The impact of hierarchical labeling on consumers' choices in tiered pricing plans
- Creators
- Liangyan Wang - Shanghai Jiao Tong UniversityXun Deng - Shanghai Institute of TechnologyHaipeng (Allan) Chen - University of Kentucky
- Resource Type
- Journal article
- Publication Details
- Marketing letters, Vol.35(2), pp.259-273
- DOI
- 10.1007/s11002-023-09694-3
- ISSN
- 0923-0645
- eISSN
- 1573-059X
- Publisher
- Springer Nature
- Number of pages
- 15
- Grant note
- DOI: 10.13039/501100001809, name: National Natural Science Foundation of China, award: 72110107001, 71772120, 72202142
- Language
- English
- Electronic publication date
- 08/09/2023
- Date published
- 06/2024
- Academic Unit
- Marketing
- Record Identifier
- 9984618647902771
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