Graduation Year

2022

Document Type

Dissertation

Degree

D.B.A.

Degree Granting Department

Marketing

Major Professor

Sajeev Varki, Ph.D.

Committee Member

Carter Morgan, Ph.D.

Committee Member

Mark Bender, Ph.D.

Committee Member

Sandra Schneider, Ph.D.

Keywords

Balancing, Implicit Reference, Loss Aversion, Overall Spending, Price Sensitivity, Reinforcement

Abstract

Product customization is increasingly being offered as consumers interact with businesses online. When consumers customize a product, they often choose from among multiple, inter-related categories. Thus, the choices made in a prior category could influence choices in later categories (spillover effect). Currently, marketers attempt to nudge consumers to choose more expensive/profitable options by preselecting these options (explicit reference). In this dissertation, I explore whether implicit references can be employed to generate a spillover effect. Implicit references are generated by arranging the options within a category in either descending or ascending price order, with descending price order favoring the selection of higher-priced options and ascending price orders conversely favoring the selection of lower-priced options. In particular, I investigate whether presenting options prices in the first category in descending order increased spending in the subsequent categories (positive spillover). However, I find that the price-quality association in the first category influences the type of spillover. When the price-quality association is not strong in the first category, there is a negative spillover in the remaining categories, possibly because of increased price sensitivity. When the price-quality association is strong in the first category, there is an attenuation of the negative spillover in the remaining categories. It appears that the loss aversion for quality overcomes the increased price sensitivity found earlier.

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