Browsing by Author "Lynch, John G"
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Item Open Access A Generalizable Scale of Propensity to Plan: The Long and the Short of Planning for Time and for Money(2010) Lynch, John G; Netemeyer, Richard G; Spiller, Stephen A; Zammit, AlessandraPlanning has pronounced effects on consumer behavior and intertemporal choice. We develop a six-item scale measuring individual differences in propensity to plan that can be adapted to different domains and used to compare planning across domains and time horizons. Adaptations tailored to planning time and money in the short run and long run each show strong evidence of reliability and validity. We find that propensity to plan is moderately domain-specific. Scale measures and actual planning measures show that for time, people plan much more for the short run than the long run; for money, short- and long-run planning differ less. Time and money adaptations of our scale exhibit sharp differences in nomological correlates; short- run and long-run adaptations differ less. Domain-specific adaptations predict frequency of actual planning in their respective domains. A "very long-run" money adaptation predicts FICO credit scores; low planners thus face materially higher cost of credit.Item Open Access Learning, Thinking, Buying, Using: Contextual Effects on Consumers' Adoption of Really New Products(2008-08-20) Alexander, David LyleCombining prior theory about really-new products with temporal construal theory, I examine how psychological differences in how consumers think about really new products (RNPs) and incrementally new products (INPs) affect consumers' formation of long-term product-purchase intentions and follow through on those intentions. In three field studies, I find that consumers form fewer long-term purchase intentions for RNPs than for INPs. They follow through on those intentions less often for RNPs than INPs and this difference in follow-through grows stronger over time after the measurement of purchase intentions. Consumers declaring intention to purchase INPs are more likely to form implementation intentions than those intending to purchase RNPs. Compared to those intending to acquire INPs, those intending to acquire RNPs are exposed to less new information and their attitude accessibility dissipates more rapidly over time. I discuss the implications of these findings for the launch of really new products and for market research on really new products.
In all of these findings, psychological newness is generally a bad thing for the product marketer. I conclude by identifying future research directions for examining the effect of product psychological newness on earlier stages of the product adoption process (Rogers 2003), where newness might be an advantage under some conditions. Psychological newness can affect consumers' initial efforts to learn about new products, and there are conditions under which newness might facilitate learning and awareness. A framework for product psychological newness' influence on elaboration of new product messages is proposed.
Item Open Access Limited Means and What I Can't Buy: Resource Constraints and Resource Use Accessibility Drive Opportunity Cost Consideration(2011) Spiller, Stephen AndrewEvery consumer decision incurs a cost. An hour spent researching products is an hour not spent working. Vacation days used in the winter are vacation days not used in the summer. A dollar spent on a car payment is a dollar not spent dining out. What determines the extent to which consumers consider such opportunity costs when making decisions?
Although every purchase requires an outlay cost (i.e., spending dollars in order to obtain a good), outlay costs only have economic significance because some other good or service must be given up as a result. Consumers have unlimited wants but limited resources, so satisfying one want means not satisfying another (the opportunity cost). An opportunity cost is "the evaluation placed on the most highly valued of the rejected alternatives or opportunities" (Buchanan 2008) or "the loss of other alternatives when one alternative is chosen" (Oxford English Dictionary 2010). Opportunity costs are foundational to the science of economics and, normatively, consumers should account for opportunity costs in every decision they make. I define opportunity cost consideration as "considering alternative uses for one's resources when deciding whether to spend resources on a focal option."
Because consumers face opportunity costs, every purchase decision is effectively a choice among alternative resource uses, not just a decision of whether or not to make a particular purchase. When consumers consider their opportunity costs, alternative resource uses specify the broadest form of competition that products face: each resource use competes for share-of-wallet with all other potential resource uses. Understanding when consumers consider a purchase decision as an allocation across multiple options, and what those considered options are, allows researchers and practitioners to better understand why consumers make the purchases that they do, why they restrain from making the purchases that they do not, and how to influence purchases of focal options by increasing or decreasing consideration of alternative resource uses.
What determines when consumers consider opportunity costs? In Essay 1, I propose that consumers consider opportunity costs when they perceive immediate resource constraints. In Essay 2, I propose that consumers consider opportunity costs when the resource in use increases the accessibility of alternative resource uses in memory.
Beyond addressing when consumers consider opportunity costs, I address three additional questions. First, who is more likely to consider opportunity costs? Individuals with a high propensity to plan are likely to consider opportunity costs even when they are not immediately constrained. Second, which opportunity costs are consumers more likely to consider? Consumers are more likely to consider opportunity costs that are more typical of the category of possible resource uses than opportunity costs that are less typical of the category of possible resource uses. Third, what are the consequences of opportunity cost consideration? Individuals who consider their opportunity costs are more sensitive to their value than those who do not consider them. In addition to aiding our understanding of the consumer decision process, understanding opportunity cost consideration has important implications for consumers' sensitivities to the structure of the decision environment, understanding the nature of competition and cross-price elasticities, memory for foregone options, and construction of preferences.