Is There an Expected Trade-Off Between a Product’S Ethical Value and Its Effectiveness?: Exposing Latent Intuitions About Ethical Products

Corporate sponsorship is an often used fundraising strategy for nonprofit organizations and is considered to be a “win-win” situation for the sponsoring company as well as the nonprofit. While prior research suggests that corporate sponsorship can positively affect the sponsoring company, little research to date has investigated the impact of such sponsorships on the nonprofit particularly when it is the nonprofit that is communicating the existence of the sponsorship. We address this question and examine the impact of corporate sponsors on people’s perceptions of and willingness to support nonprofit organizations. Results from an experiment suggest that revealing corporate sponsors may, under certain conditions, negatively affect a nonprofit’s effort to garner financial support from the general public. “I’m Glad I Did” or “I Wish I Had:” The Comparative Effects of Satisfaction and NonPurchase Regret on Future Purchase Intentions Henrik Hagtvedt, University of Georgia, USA Matthew Lancellotti, California State University Fullerton, USA Vanessa Patrick, University of Georgia, USA Extended Abstract It seems counterintuitive that a consumer who does not experience your product may be just as valuable as your most satisfied customers. Even less obvious is the recommendation that marketers design promotions such that they can highlight missed opportunities to consumers who did not take advantage of the offer. In this research we examine regret for a forgone purchase opportunity and Advances in Consumer Research (Volume 34) / 359 demonstrate that non-purchasers reveal a motivation to purchase the product in the future similar to customers who experienced the product and were satisfied. Traditionally, marketers have focused a great deal of effort on understanding customers who have tried and used the product. The issue has always been to keep these customers satisfied and to find ways to ensure that they continue to purchase the product in the future. The flip side of this equation is to ensure that consumers feel a minimal amount of dissatisfaction and regret for their purchase. The study of regret has been restricted to regret following some action, most often a purchase (Cooke et al. 2001; Tsiros and Mittal 2000). Such a focus is clearly relevant and justified given the negative effect that feelings of dissatisfaction and regret have on repeat purchase and brand loyalty, among other post-consumption outcomes. In this research we propose that the feelings of regret following a forgone opportunity, i.e. regret for inaction, represents a potent driver of consumer behavior. Unlike regret for inaction examined in the psychology domain, regret for inaction in the consumption arena might be assuaged by the possibility of a similar opportunity arising in the future. Prior research on inaction inertia suggests that forgone opportunities increase the likelihood of similar inaction in the future (Arkes et al. 2002). At least this seems to be the case when the current opportunity is less attractive than the forgone opportunity, although still positive in an absolute sense (Tykocinski and Pittman 1998). However, it may not be the case when the current opportunity is as attractive as or more attractive than the forgone opportunity. We theorize that consumers who experience inaction regret tend to idealize the forgone opportunity (Newby-Clark and Ross 2003), construing it to be positive and satisfying and eliciting a necessity to act by the contrasting of present reality with favorable expectations (Oettingen et al. 2001). In this case, regret for inaction serves as motivation not to make the same mistake twice. Indeed, in two studies we examine the impact of inaction regret on future purchase intentions and demonstrate that regretful non-purchasers are just as likely as satisfied customers to purchase in the future, and also to pay a premium for this purchase. Study 1 used a critical incident method to examine inaction regret arising from forgone opportunities versus the feelings of satisfaction and dissatisfaction arising from taken opportunities in a consumption context. One hundred and eighty-two undergraduates participated. Participants in the regret for inaction condition were asked to think about a product that they had not bought, but wished they had. Participants in the satisfaction and dissatisfaction conditions were asked to think about a product/service about which they felt either “much more happy or satisfied than you expected you would” (satisfaction condition) or “much less happy or satisfied than you expected you would” (dissatisfaction condition). After describing the incident, participants answered questions designed to assess future purchase intent and willingness to pay more. Results revealed no significant differences in either the likelihood of future purchase (Mregret=5.91 vs. Msatisfaction=5.92) or the willingness to pay more for the future purchase between the inaction and satisfaction conditions (Mregret=4.67 vs. Msatisfaction=5.08), but significant differences in both between these conditions and the dissatisfaction condition (Mdissatisfaction=2.78, F(2, 156)=63.11, p<.05 for likelihood of future purchase and Mdissatisfaction=2.11, F(2, 156)=51.30, p<.05 for willingness to pay more). These results indicate that consumers who experience regret for inaction are likely to purchase the item the next time they have a chance, and that they are willing to pay a premium for it. Study 2 was designed to evaluate key findings from study 1 in an ecologically valid environment. One hundred and twenty-five undergraduates who had just returned from spring break completed a questionnaire online. Fifty-one participants had taken a trip during spring break and fifty-eight of the remaining participants wished they had. Next, satisfaction with spring break, regret with spring break, the desire to take a vacation in the future, and the willingness to commit resources to ensure a future vacation were measured. Results revealed that participants who had taken a vacation were significantly more satisfied with spring break than those who had not done so. A median split was conducted on reports of inaction regret for participants who had not gone on vacation, dividing participants into a low regret group (31 participants)3 and a high regret group (27 participants). Participants who had gone on the trip and those who had high inaction regret revealed an equally strong desire to go on a trip at the next opportunity (Msatisfaction=6.54 vs. Mhigh regret=6.72), and one that was significantly stronger than those who had low inaction regret (Mlow regret=5.78; F(2, 103)=13.43, p<.05). Similar results were revealed for anticipated regret (Msatisfaction=5.33, Mhigh regret=6.15, Mlow regret=4.37; F(2, 103)=8.21, p<.05) and for the willingness to commit resources to go on the trip at the next opportunity (Msatisfaction=6.57, Mhigh regret=6.64, Mlow regret=5.75; F(2, 103)=10.67, p<.05). These results indicate that when consumers feel considerable inaction regret, this feeling leaves them just as motivated to seek out the forgone product at the next opportunity, just as likely to anticipate regretting forgoing the product, and just as likely to commit to purchasing at the next opportunity as are those consumers who did avail of the opportunity and enjoyed the product experience. An important implication of these findings is that potential customers who have missed or declined opportunities to purchase may be more important than previously surmised. Past promotional efforts directed at those customers are not necessarily sunk costs, with no anticipated future value. Instead, managers may take advantage of the forgone purchase opportunities by highlighting them in retrospect, thus intentionally inducing inaction regret. References Arkes, Hal R., Yi-Han Kung, and Laura Hutzel (2002), “Regret, Valuation, and Inaction Inertia,” Organizational Behavior and Human Decision Processes, 87 (2), 371-85. Cooke, Alan D. J., Tom Meyvis, and Alan Schwartz (2001), “Avoiding future regret in purchase-timing decisions,” Journal of Consumer Research, 27 (4), 447-59. Newby-Clark, Ian R. and Michael Ross (2003), “Conceiving the Past and Future,” Personality and Social Psychology Bulletin, 29 (7), 807-18. Oettingen, Gabrielle, Hyeon-ju Pak, and Karoline Schnetter (2001), “Self-Regulation of Goal Setting: Turning Free Fantasies About the Future Into Binding Goals,” Journal of Personality and Social Psychology, 80 (5), 736-53. 3An analysis of the open-ended statements revealed that participants who experienced low regret for inaction had deliberately chosen to stay home for spring break for work or some other commitment. On the other hand, participants who had high regret for inaction were those who wanted to go for spring break but failed to make plans or had plans thwarted for some reason.