July 28, 2011
The Role Of Relaxation In Consumer Behavior
Study reveals how relaxation increases monetary valuations of products and services
A forthcoming paper in the American Marketing Association's Journal of Marketing Research by Professor Michel Tuan Pham, Kravis Professor of Business, Marketing, Columbia Business School; Iris W. Hung, Assistant Professor of Marketing, NUS Business School, National University of Singapore; and Gerald J. Gorn, Wang Seng Liang Professor of Business, Marketing Area Chair Professor at the School of Business, Faculty of Business and Economics, the University of Hong Kong, finds that states of relaxation consistently increase the monetary valuations of products, actually inflating these valuations by about 10 percent. This phenomenon is demonstrated in six experiments involving two different methods of inducing relaxation, a large number of products of different types, and various methods of assessing monetary valuation. In all six experiments, participants who were put into a relaxed affective state reported higher monetary valuations than participants who were put into an equally pleasant but less relaxed state.
The research indicates why bargain-hunters should be aware about their state of mind when making purchases. Professor Pham explains, "The study reveals a psychological reaction to the biology of being relaxed: Your system thinks there is no threat in the environment. As a result, you tend to perceive various things as more desirable. Shoppers should be aware of how this impacts their decision-making."
According to the researchers, relaxed consumers think products are worth more than less-relaxed consumers because relaxed individuals tend to think about the value of products at a more abstract level. For example, when bidding for the camera, relaxed participants focused more on what the camera would enable them to do (e.g., collect memories) and how desirable and advantageous it was to own it, whereas the less-relaxed participants focused more on the concrete features of the camera itself (e.g., the number of megapixels it had, the shutter speed).
The study helps explain why luxury products and services, such as 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, which has important implications for marketers.
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