Why consumers respond differently to absolute versus percentage descriptions of quantities
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Why consumers respond differently to absolute versus percentage descriptions of quantities Danny Weathers & Scott D. Swain & Jay P. Carlson
Published online: 8 July 2012 # Springer Science+Business Media, LLC 2012
Abstract Consumers often provide different evaluations of absolute and percentage descriptions of the same quantity. Prior research has attributed this to two factors: selection of distinct reference contexts and differential cognitive difficulty. However, in a preliminary study, we show that discrepancies in consumer evaluations of absolute and percentage quantities can arise even when these two factors are held constant. A series of studies provides evidence that (1) this effect is rooted in automatic, nonverbal associations between numerical stimuli and analogue magnitude coding and (2) the influence of analogue magnitude codes manifests across different kinds of quantities, different evaluations, and different processing modes. Keywords Analogue magnitude codes . Face values . Percentages . Pricing . Price evaluations
1 Introduction When marketers wish to communicate a change in a quantifiable attribute, they often provide the original quantity along with the amount of change. Change amounts are typically indicated as either (1) a percentage of the original quantity (e.g., 20 oz. plus 10 % extra) or (2) an absolute quantity (e.g., 20 oz. plus 2 oz. extra). While the choice of format for a given change amount would seem to be arbitrary with respect to consumer evaluations, prior research suggests otherwise (e.g., Chen et al. 1998; DelVecchio et al. 2007; Heath et al. 1995; Kim and Kramer 2006; Krishna 2009). D. Weathers (*) College of Business and Behavioral Science, Clemson University, Clemson, SC 29634, USA e-mail: [email protected] S. D. Swain College of Business Administration, Northeastern University, Boston, MA 02115, USA e-mail: [email protected]. J. P. Carlson School of Management, Union Graduate College of Union University, 80 Nott Terrace, Schenectady, NY 12308, USA e-mail: [email protected].
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Mark Lett (2012) 23:943–957
Two explanations have been offered for differences in consumer evaluations of absolute and percentage quantities. One account suggests that percentages are more difficult to evaluate than absolute quantities, thus encouraging the use of simplifying heuristics (e.g., DelVecchio et al. 2007; Kim and Kramer 2006; Morwitz et al. 1998). A second account holds that the evoked reference context differs for percentage and absolute quantities (e.g., Chen et al. 1998; Heath et al. 1995; Tversky and Kahneman 1981). While these explanations have merit, we propose that differences in consumer evaluations of absolute and percentage quantities are rooted in a more fundamental process involving strong associations between numeric stimuli and perceived magnitudes. We motivate this proposition with the following preliminary study. We asked respondents to imagine that they were shopping for shoes, whereupon they came across a company that was offering the option to custo
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