The Repellent Effect of Waste: A study of unusual factors affecting Willingness To Purchase [article]

Katerina Kormusheva, University, The Australian National, University, The Australian National
2020
" The Repellent Effect of Waste" Abstract This research poses a theory of the Repelling Effect of Waste in services and perishable goods, explores its principles, and proposes the first moderating factor in the literature that we are aware of. The main ideas of our research and the proposed theory focus on the following three areas of contribution to marketing science: [1] We offer insights about waste aversion in services and actual WTP. We carry out experiments to support our theoretical
more » ... sitions; [2] We propose insights about the decision-making processes that people go through in terms of complexity and choice (relating to 'waste' and in the context of offers and price design), and how cost disclosure interacts with this; [3] We discuss the importance of key variables such as income (or relative wealth), on those processes, and support our propositions with experimental insights. Through a series of six experiments, this research brings evidence of waste aversion in the context of services, which is the main contribution of the research. This research also looks at Willingness to Purchase (WTP) and proposes that Qualitative Cost cues could be an effective and ethical way to increase consumer's willingness to pay a price premium. Our experimental results also show that there is an ethical, cheap and effective way to communicate a price premium to consumers and convince them to buy a premium product: qualitative cost cues. WTP can be increased by up to 36% in potential consumers. Our experiments further show that less is not always more. In many industries, marketers offer features that build additional value of the product or service being offered. Sweeteners, bonus packs, 2-in-1 deals and similar marketing techniques have become commonplace. However, our experiment shows there could be such a thing as too much value, bordering on waste, in an offering, which eventually could put customers off, rather than entice them into buying the product. Keywords: pricing, bundles, pricing of services, service marketi [...]
doi:10.25911/5eb140eb7e1fe fatcat:lm5sadbfc5e5dfgvwkgnu5b5vu