Consumers willing to pay more in relaxed stateJuly 29th, 2011 - 9:25 pm ICT by IANS
Washington, July 29 (IANS) Consumers are willing to pay more for a product in a relaxed frame of mind than they otherwise would.
Columbia Business School business and marketing professor Michel Tuan Pham, who led the study, explained: “The study reveals a psychological reaction to the biology of being relaxed. Your system thinks there is no threat in the environment.”
Relaxed consumers think products are worth more because they place higher value on products at a more abstract level, the Journal of Marketing Research reports.
For example, when bidding for a camera, relaxed participants focused more on what the camera would enable them to do (collect memories) and how desirable and advantageous it was to own it.
But those who were less relaxed focused more on the concrete features (number of megapixels it had, the shutter speed), according to a Columbia statement.
The study helps explain why high-end boutiques and luxury hotels are often sold or provided in relaxing environments. Everything else being equal, consumers will be willing to pay higher prices if marketers are able to relax them first.
In six experiments, 670 participants, who were put into a relaxed state, placed higher valuations than participants who were put into an equally pleasant but less relaxed state.
For example, in one simulated bidding study, relaxed participants bid about 11 percent higher for a digital camera than less-relaxed participants. Whereas the less-relaxed participants’ bids were close to the product’s estimated market price on online auction sites, relaxed participants’ bids were about 15 percent higher than the estimated market price.
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Tags: abstract level, biology, boutiques, columbia business school, consumers, digital camera, environments, frame of mind, journal of marketing, journal of marketing research, luxury hotels, marketers, megapixels, online auction sites, participants, psychological reaction, school business, shutter speed, tuan, valuations