I have been a passionate lover of research, experiments and statistics since my University years. This feeling has been patiently pampered and nurtured wherever I stepped in, be it a tiny meditation center in India or a gigantic corporate in London. That's why every Friday I want to open this half-filled jar and share with you some of my favorite findings and investigations from around the world. Most of the time you'll be able to apply the results in your own marketing activities. Sometimes it'll work as a stimulus to smile or frown. Never will it waste your time. And that's what we want, right?
Creating your promotions, planning discounts and bonus products.
Research* found that people prefer price discount to bonus pack for a vice good, but select bonus pack instead of price discount for a virtue good. While both of these purchases offer savings to a consumer, the final explanation comes down to... inner justification.
Scientists say that people feel greater inner conflict when buying a vice good, naturally, they need to justify it somehow. In this place, a price discount is perceived as a better option, offering reduced losses and 'saving' from over-consumption of ‘bad stuff’. Getting a bonus pack would mean getting more of vice goods, and how would you explain that to...well, yourself?
On the contrary, as people don’t feel guilty about consuming virtue goods, they perceive a bonus as additional gain of ‘good stuff’ and prefer it over price discount. We like our consciousness calm and guiltless, right?
Every time in a supermarket, I pass this huge fridge of colorful ice cream packs on my way to the counter. Sometimes they have these stickies with 30% discount offers on a pack and more often than not I go for it. Every time I do, I find myself thinking (I became really good at introspection!) – “Well, it’s bad for me and my curves, so unhealthy, I’ll have to burn so many calories after that la la la… but I’m getting it much cheaper and it’s just a onetime treat anyways.” Pack in my cart!
Few times while passing that same fridge of ice cream I had seen another offer: “Buy a pack of ice cream and get an ice cream bar for free”. Scratching my seduced head, I was thinking – “Oh my, I want it. But then - no way. I know myself. I’ll eat that ice cream pack like a happy piggy and then I’ll also eat the ice cream bar. Big time - pig time. No way I can see myself feeling all right and shameless and sleeping peacefully at night after that mountain of sinful sugar." You guessed it right – I reached the counter without ice cream in my cart.
* Arul Mishra & Himanshu Mishra (2011). The Influence of Price Discount versus Bonus Pack on the Preference for Virtue and Vice Foods. Journal of Marketing Research. Thanks for the material!
P.S. When you’re done reading, I’d love for you to share your experience about price discounts and bonuses. Leave a comment or Tweet me, let's chat!
P.P.S. Need some help on creating your Promotional Campaign? Let's do this together.
When Will You Use This?
Creating your promotions, planning discounts and bonus products.
What’s The Bright Star In Dead Night Here?
Research* found that people prefer price discount to bonus pack for a vice good, but select bonus pack instead of price discount for a virtue good. While both of these purchases offer savings to a consumer, the final explanation comes down to... inner justification.
Scientists say that people feel greater inner conflict when buying a vice good, naturally, they need to justify it somehow. In this place, a price discount is perceived as a better option, offering reduced losses and 'saving' from over-consumption of ‘bad stuff’. Getting a bonus pack would mean getting more of vice goods, and how would you explain that to...well, yourself?
My Personal Example As Consumer
Every time in a supermarket, I pass this huge fridge of colorful ice cream packs on my way to the counter. Sometimes they have these stickies with 30% discount offers on a pack and more often than not I go for it. Every time I do, I find myself thinking (I became really good at introspection!) – “Well, it’s bad for me and my curves, so unhealthy, I’ll have to burn so many calories after that la la la… but I’m getting it much cheaper and it’s just a onetime treat anyways.” Pack in my cart!
Addition to Your Bag of Tricks
- Offer a price discount for a vice good (the one that provides strong immediate gratification but isn't very healthy).
- Offer a bonus pack for a virtue good (the one that offer weak immediate gratification but leads to long-term benefits) .
- Keep experimenting to find better variations (because they are there!).
* Arul Mishra & Himanshu Mishra (2011). The Influence of Price Discount versus Bonus Pack on the Preference for Virtue and Vice Foods. Journal of Marketing Research. Thanks for the material!
P.S. When you’re done reading, I’d love for you to share your experience about price discounts and bonuses. Leave a comment or Tweet me, let's chat!
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