Executive summary of “Construal based marketing tactics for high quality versus low price market segments”

Citation

Cole, G. (2015), "Executive summary of “Construal based marketing tactics for high quality versus low price market segments”", Journal of Product & Brand Management, Vol. 24 No. 2. https://doi.org/10.1108/JPBM-03-2015-0828

Executive summary of “Construal based marketing tactics for high quality versus low price market segments”

Article Type: Executive summary and implications for managers and executives From: Journal of Product & Brand Management, Volume 24, Issue 2

This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.

It is often assumed that positive correlation exists between price and quality. Thus, marketers work on the assumption of a continuum with high price and high quality at one end and low price and low quality at the other. The strategy chosen to market products depends on their position along this continuum.

Difference exists between thinking in abstract and concrete terms, with the former regarded as high level and the latter as low level. Construal-level theory is based on this disparity. Part of the theory focuses on the “psychological distance” that characterizes the mental representation of objects and events which are not presently positioned near to the self. Such events are considered in abstract terms of “desirability”. On the other hand, thinking of near future events reflects their “feasibility”, which is associated with concreteness.

The construal-level framework contrasts abstract and concrete mental representations and can be applied to different market segments. It is particularly relevant for situations where the “objective quality” of a product can be ascertained through its “intrinsic attributes”. Quality is an end result desired by the consumer and involves “high-level construal”. This quality is attainable by paying the stated price for the product. Consideration of the feasibility indicated by its price represents “low-level construal”. It is mooted that people who seek high quality place greater emphasis on the purchase transaction’s desirability and are inclined toward abstract mental processes. But, concrete mental models are likelier to be utilized by those who value transaction feasibility more.

Love and Okada believe that the use of abstract or concrete mental models determines which aspects of the product accrue most importance. It is professed that people who are looking for high-quality offerings assign greater significance to the primary or core attributes of a product. But, the secondary or more peripheral product attributes attract the attention of those interested in low-price offerings. Quality is typically determined by multiple “qualitative attributes”, and this explains the abstract mental processing involved in the assessment process. The abstract representations demand a high level of understanding and, as a result, price becomes less important.

Such knowledge can be exploited by marketers. The authors argue that people using more abstract mental models create a “simple representation” using the available information to create a general picture. This representation consists of superior and important features of the possibilities being evaluated. It is, therefore, suggested that marketers should focus on quality aspects of the brand and highlight primary features rather than secondary ones. Advertising which aims to attract attention could be most effective for quality products. People considering such products might miss the finer details because of this tendency to be drawn toward the bigger picture.

Such strategies could be less appropriate for consumers whose priority is price rather than quality, as this consumer group is already aware of the low-level details. Consequently, advertising which attempts to attract attention would prove minimally effective at best. Emphasizing the economic value the advertised offering provides to the consumer is proposed as the more appropriate tactic.

Different analysts point out how marketers use price as a means of interesting consumers. Partitioned pricing can prove influential in this respect. For instance, companies might market a product by listing the base price and packaging and shipping costs separately. Even though the total cost would be the same as an “all-inclusive price”, lowering the base price can often have the desired aim of enticing the consumer. The view of Love and Okada is that this “transparent pricing” is likely to work better with consumers seeking high-quality products. This is due to their tendency to pay less attention to details. On the other hand, the fact that consumers who place greater importance on low price are already conscious of the finer points prompts lower expectation of success with this tactic in such situations.

To examine these propositions further, two studies are carried out. The first involves a behavioral experiment, involving 219 subjects aged between 25 and 34 years. Females accounted for 34 per cent of the sample. The authors adapted a questionnaire devised to measure construal level through participants’ choice of either high- or low-level representations of various activities included in the behavioral identification form (BIF). Higher levels of abstraction were indicated by higher BIF scores. Restatements chosen where quality and price were being compared provided support for the belief that more abstract terms are typically used when people consider high-quality offerings. Analysis of a sub-group containing those revealed to be “relatively concrete thinkers” revealed they were much likelier to use concrete mental images for low price offerings than for high-quality products.

Empirical research was used in the second study in which online ticket auctions for Major League Baseball games during the 2005 season were scrutinized. Choice of this category was determined by knowledge of variations in quality and price, primarily based on proximity of seats to the action and the view afforded. In addition, various price–quality combinations were available along with some use of partitioned pricing strategies.

The authors analyzed 7,409 transactions involving 18,441 tickets, the price of which varied from $1.01 to 800.51. Average price per ticket was $73.20. A total of 1,323 transactions were for games against the team’s closest rival. Average ticket price for these games was higher and had the anticipated greatest impact on higher-quality seats. The authors purport that this corroborates belief that primary features are most important for consumers seeking high-quality products.

As predicted, results also showed that seller reputation had a stronger impact on those bidding for lower-price tickets. This is attributed to seller reputation being a secondary rather than primary feature. Some evidence was also found to suggest that featured advertisements can be effective for certain consumer segments. In this case, the tiny percentage of tickets featured on eBay product lists, and thus positioned prominently, did appear to catch the attention of those seeking high-quality seats. This backs the claim that the higher level of analysis typical of such individuals makes them more prone to miss details. A negative relationship was evident between free shipping and high-quality seats, thus indicating that partitioned pricing would appeal to consumers buying tickets at higher prices.

Love and Okada claim that improving core attributes might increase willingness to pay among consumers who use a higher level of construal when considering their purchases. Enhancement to secondary features could produce a similar outcome among those using a low level of construal. Consequently, marketers who launch high-quality offerings or aim to strengthen the quality reputation of existing products should focus on improving and highlighting core features and use advertising which draws consumer attention. In contrast, greater emphasis should be on secondary features for marketers specializing in low-priced products.

Future research might further investigate whether consumers use different mental models when simultaneously considering high-quality and low-priced options. The authors acknowledge this possibility, especially within narrower price–quality bands where some trade-off between these priorities might occur. However, that high quality and low price are typically aimed at different market segments is also noted. Another suggestion is to examine if psychological distance influences preference for high quality or low price in certain purchase situations such as buying as a gift versus personal use or for near dates versus those in the more distant future.

To read the full article enter 10.1108/JPBM-11-2013-0444 into your search engine.

(A précis of the article “Construal based marketing tactics for high quality versus low price market segments”. Supplied by Marketing Consultants for Emerald.)