The Effect of Goal and Assortment on Cross-Price Sensitivity

Abstract

Inference and choice outcomes differ greatly by consumer categorization. From the research on goal-driven categories and the diagnosticity principle, the current research investigated how goals and the addition of dissimilar options to the consideration set could change consumer sensitivity to the price discount of competing products. Study 1 examined the role of a goal. Besides taxonomic categories, consumers may use goal-derived categories to organize information about products. The focal product and the competing product seemed to belong to different categories without the goal but seemed to belong to the same category when the goal was activated. The result revealed that people in the goal presence condition were more sensitive to the price discount of the competing product. Study 2 confirmed that the addition of an option to the consideration set could change product categorization and the sensitivity toward the price discount of competing products.