SALT LAKE CITY — Next time when you buy a pack of your favorite chocolate at a price discount, ask yourself a simple question: would you have bought it if it was available with a bonus quantity? New research shows that old fashioned guilt that prevents one from buying vice food with bonus quantity may actually play a role in buying vice food with price discount.
In their paper, “The Influence of Price Discount versus Bonus Quantity on the Preference for Virtue and Vice Foods,” David Eccles School of Business researchers Arul and Himanshu Mishra explore the uniquely human struggle to balance conscience and desire – in this case, how shoppers alter their purchasing choices between healthy, or “virtue” foods, and unhealthy or “vice” foods when given varying sales promotion options such a price discount or a bonus quantity.
The study conducted at the University of Utah revealed that while the preference for bonus quantity over price discounts hold for virtue food, the reverse is true for vice foods, where price discounts become more attractive to buyers than bonus quantity.
“It is a generally accepted notion that bonus quantity, or extra quantity for the same price, perform better than price discounts. This has influenced how retailers [and] manufacturers offer discounts,” Arul Mishra says. “What we are showing is that although this notion holds for virtue foods, this pattern reverses for vice foods. These findings have implications for how sales promotions are perceived by consumers and offered by retailers.”
The Mishras, husband and wife marketing professors at the David Eccles School of Business, explored this phenomenon in a series of studies that included both customers at a local coffee shop and hundreds of students. Participants were offered a mix of varied virtue and vice foods, prices and amounts. In the preliminary study of 98 customers exiting a local coffee store, the Mishras offered the choice of the store’s low-fat blueberry muffins or its rich chocolate chip cookies. Further, the cookies were offered in either a bonus quantity or at a reduced price, as were the muffins.
The results: 76.1 percent chose to buy the low-fat muffins when offered with a bonus quantity while 54.2 percent chose to buy it with a price discount. Conversely, 69.6 percent selected cookies when offered with a price discount, but only 47.9 percent chose it with the bonus quantity option.
Subsequent laboratory studies found similar results for products ranging from identical chocolates, labeled as either “healthy” or “tasty,” to raisins, cake and fruit salad, all offered at either reduced prices or in bonus packaging promotions. The last of five such studies used altruism as an additional “justification” factor, measuring vice vs. virtue food choices after participants were told they were up for a $25 prize, a portion or all of which they could donate to a chosen charity.
“Consumers cannot generate good justifications for buying [vice foods] with a bonus quantity since it would mean consuming more,” The Mishras write. “However, a price discount with a vice food can be justified as a money-saving purchase and hence it acts as a guilt-mitigating mechanism. For virtue foods, the absence of both anticipated post-consumption guilt and the resulting need to justify leads consumers to prefer bonus quantity over price discount.”
The paper is to be published in the February edition of the Journal of Marketing Research.
For more information on the David Eccles School of Business, visit www.business.utah.edu. For news, tips, and promotions, follow us on Twitter at http://twitter.com/desb_uofu and on Facebook at http://www.facebook.com/ubusiness.
About the David Eccles School of Business
Founded in 1917 in Salt Lake City, the David Eccles School of Business has programs in entrepreneurship, technology innovation and venture capital management. Emphasizing interdisciplinary education and experiential learning, it launched the country’s largest student-run venture capital fund with $18.3 million, and is home to the Pierre Lassonde Entrepreneur Center and the Sorenson Center for Discovery and Innovation. Approximately 3,500 students are enrolled in its undergraduate, graduate and executive degree programs as well as joint MBA programs in architecture, law and health administration. For more information, visit www.business.utah.edu.
Source: David Eccles School of Business
