On the Edge of Buying:A Targeting Approach for Indecisive Buyers Based on Willingness-to-Pay Ranges

Dost, Florian and Wilken, Robert and Eisenbeiss, Maik and Skiera, Bernd (2014) On the Edge of Buying:A Targeting Approach for Indecisive Buyers Based on Willingness-to-Pay Ranges. Journal of Retailing, 90 (3). pp. 393-407. ISSN 0022-4359

Abstract

Targeting the “right” consumers is a core part of marketing. Whereas existing techniques to identify these consumers use demographic or psychographic variables or behaviors such as response probabilities, a proposed new targeting approach builds on consumers’ incremental responses to identify them by their willingness-to-pay (WTP) ranges. These WTP ranges reveal a consumer as a definite buyer, a definite non-buyer, or an indecisive buyer. The proposed theoretical framework indicates that indecisive buyers offer the highest incremental responses to targeted marketing mix activities and thus should be the most preferred targeting group. A sequence of three laboratory experimental studies validates the proposed approach for targeted price discounts and non-price tactics. In addition, a large-scale field experiment involving a consumer engagement campaign that includes observed purchase behavior demonstrates the high external validity and applicability of this approach.