Academic literature on the topic 'Marketing Communications and Purchase Decision'

The research was aimed at describing brand equity, integrated marketing communications and purchase decisions. The research was also conducted to analyze the influence of brand equity and integrated marketing communications towards purchase decisions for Samsung smartphones in Sukabumi. The methods applied in the research were descriptive and associative research methods with quantitative approach. Moreover, by using non-probability sampling method with purposive sampling technique, questionnaires were distributed to 398 respondents who were Samsung smartphone users in Sukabumi city. The techniques of analyzing data used by the researcher were multiple linear regression, determination coefficient, and hypothesis testing. The results of the research show that the correlation coefficient analysis is amounted to R-0.777 which has a strong interpretation. Subsequently, the determination coefficients of brand equity and integrated marketing communications toward purchase decisions is aggregated to 60.3%, while the rest of 39.7% is influenced by other factors not included in the research. The result of the simultaneous test (F-Test) indicate that brand equity and integrated marketing communication influence purchase decisions altogether. Moreover, the result of the partial test (t-test) obtain the value of sig. < 0.050 so it states that there is a significant and positive influence between brand equity toward purchase decisions and there is an influence from integrated marketing communication towards purchase decisions.
 
 Keywords: Brand Equity, Integrated Marketing Communication, Purchase Decision.

The purpose of this study was to determine the effect of marketing communications, needs and location on purchasing decisions for MSME products in Bengkulu City (Case Study of Batik Al-Sufi UMKM). This research is a type of quantitative research. Data collection techniques are observation, documentation and questionnaires. Data analysis techniques using descriptive analysis, multiple regression analysis, coefficient of determination (R2) and hypothesis testing. The results showed that marketing communications had a positive effect on purchasing decisions at the Al-Sufi Batik Shop in Bengkulu City, thus the higher the marketing communications, the higher the purchasing decision at the Al-Sufi Batik Shop in Bengkulu City. The need has a positive effect on the purchasing decision of the Al-Sufi Batik Shop, Bengkulu City, thus the higher the need, the higher the purchase decision at the Al-Sufi Batik Shop, Bengkulu City. Location has a positive effect on the purchasing decision of the Al-Sufi Batik Shop, Bengkulu City, thus the higher the location, the higher the purchasing decision at the Al-Sufi Batik Shop, Bengkulu City. Marketing communications, needs and location together show an influence on purchasing decisions at the Al-Sufi Batik Shop, Bengkulu City. Keywords: Marketing communication, needs, location, purchase decision

This study aims to determine the effectiveness of digital marketing communications on brand awareness and purchasing decisions at Majestic Point Serpong Apartments during the Covid-19 pandemic by using quantitative approach techniques and data sources obtained by distributing questionnaires to prospective buyers of Majestic Point Serpong Apartment units as many as 80 respondents. Then, the method used is simple regression analysis. The results of this study indicate the Effectiveness of Digital Marketing Communications (X) has a significant positive effect on Brand Awareness (Y1) with a t count of 5.410. Digital Marketing Communication Effectiveness Variable (X) has a significant positive effect on Purchase Decision (Y2) with a t value of 7.214. Brand Awareness Variable (Y1) on Purchase Decision (Y2) has a positive effect with a value of 0.494. And the variable Purchase Decision as a full intervening variable

Today, along with the increase in the number of smartphone users, marketing communications need to be personalised based on consumer interaction, with useful information while also providing a customer experience with high service quality to turn potential consumers into buyers. The mobile phone market in Vietnam is still growing market and is increasingly differentiated. The objective of the study is to explore the effects of marketing communication on the smartphone purchase decision of customers. The authors used qualitative and quantitative methods, applied to 255 consumer surveys using smartphones in Vietnam. The results show that there are 3 main groups of factors that affect the consumers' decision to buy smartphones, including communication by advertising through websites, communication through promotions, and communication by advertising through search engines. From the results obtained, the research team proposes some administrative implications for relevant organizations and businesses about the effects of marketing communications on the purchasing behaviour of the customer, thereby increasing consumers' smartphone purchase decisions.

The aim of this study is to analyze the impact of Integrated Marketing Communication (IMC) and its influence on the decision to re-purchase a Toyota car in Auto2000 Sanur, Bali. This research uses quantitative research methods. The samples were obtained by purposive sampling and the number of samples was determined by the Slovin formula, which is 89 respondents. The data processing techniques in this study are assisted by the SPSS version 25 program and use data analysis techniques such as validity tests, reliability tests, classical assumption tests, regression analysis, f tests, t tests, and determination coefficients. The results of the study show that simultaneously the IMC has a significant influence on the re-purchase decision. Integrated Marketing Communication gave an impact of 77.3% on re-purchase decisions and other factors not studied in this study gave an influence of 22.7%. Kata kunci: Marketing communications, IMC, Integrated Marketing Communication, repurchase decisions

The article outlines the specifics of research conducted to make effective decisions in marketing communications. The types and directions of marketing communications research are named. Among them are research related to market study, advertising product testing, ideas for a communicative message, evaluation of the effectiveness of an advertising or PR campaign, and media research. It is emphasized that it is necessary to conduct pre- and post-testing to evaluate the effectiveness of the advertising campaign. Evaluation studies can be conducted several times within the framework of an advertising campaign. The advantages and disadvantages of pre-testing and post-testing of advertisements were described. An indicative survey structure for communication research is provided. The author considers the following methods of evaluating the content of advertising messages: direct assessment, Gallup & Robinson methodology, portfolio test, advertising and communication test, laboratory test, split test, and broadcast research. Research on purchase reactions and other communication methods was also analyzed. The effectiveness of the use of tracking studies and post-testing has been proven. The article describes the main methods of evaluating the economic effectiveness of marketing communications. The following are highlighted: the method of assessing the increase in sales volumes before and after the advertising campaign, the analytical method based on the correlation of advertising costs and sales volume, and the method of experimentation using test and control markets. Features of media studies are represented as one of the most important. They allow us to analyze the issue and choose the most effective strategy comprehensively. It was determined that conducting marketing research is necessary for the company’s development in the market.

The aim of this research is to study the effect of Online Marketing Communication, Consumer Preferences, and Consumer Need as mediated by Purchase Behavior on Purchase Decision. As many as 100 Tokopedia and Shoppe consumers in Bandung are chosen as the respondents using the purposive method. This research employs quantitative approach by using survey method. The data is analyzed using the mediation analysis technique from the Process Andrew Hayes Software. Research findings are: first, Direct and indirect effect of Online Marketing Communication, Consumer Preferences, and Consumer Need as mediated by Purchase Behavior on Purchase Decision falls into moderate category; second, The determinant factors of Purchase Decision as mediated by Purchase Behavior are affected by 1) Consumer Need; 2) Consumer Preferences and 3) Online Marketing Communication; third, Online Marketing Communication affects significantly on Purchase Decision as mediated by Purchase Behavior. Fourth, Consumer Preferences affect significantly on Purchase Decision as mediated by Purchase Behavior; and fifth, Consumer Need affects significantly on Purchase Decision as mediated by Purchase Behavior.

Consumers' purchase decisions are often influenced by a company's marketing communications such as advertising and direct marketing. PT. Indostar Sukses Mandiri has active marketing communications activities including advertising and interactive direct marketing. Purpose of this study is to determine the influence of advertising and direct marketing on the purchase decision of Honda Beat motorcycles in PT. Indostar Sukses Mandiri which is Indostar Sukses Mandiri. Sukses Mandiri is located at Jalan Karya No. 184, Sei Agul, Medan Barat, Medan City. The target population of this study is 93 customers of PT Indostar Sukses Mandiri. The sample of this study is 48 people and the method of selection is purposive sampling. The methods of data collection in this study are questionnaire and document analysis. Multiple regression analysis using SPSS 23 program was used as data analysis method in this study. The results of this study show that partial promotion has a positive and significant effect on purchase decision. It was also found that direct marketing has partial positive and significant effect on purchase decision of Honda Beat motorcycles in PT. Indostar Sukses Mandiri.

This study examines how the tools of Integrated Marketing Communications (IMC) namely promotion, interactive marketing, advertising, public relations, and personal selling are used to inform, persuade, and remind the target audience in Bangkok and surrounding areas about purchase decision electric vehicles car. It investigates their impact on stages of the purchase decision-making process such as problem/need recognition, information search, evaluation of alternatives, and purchase. However, this study does not explore the influence of Integrated Marketing Communications tools on post-purchase behavior because this is due to the study being conducted on individuals who are interested in purchasing an electric vehicle car. This quantitative analysis study looks at the relationships between promotion, interactive marketing, advertising, public relations, and personal selling with stages like problem/need recognition, information search, evaluation of alternatives, and purchase. It aims to establish how these Integrated Marketing Communications tools influence the purchase decision-making process by analyzing interactions between multiple variables and developing a linear equation to clarify these relationships by Multiple Regression Analysis. A questionnaire employing a 5-point Likert scale will be distributed online to gather data. Using a sampling method appropriate for an unknown population size, a total of 384 questionnaire sets will be collected. After the respondents completed the questionnaires, the researcher compiled the data for analysis. Descriptive statistics, including frequency, percentages, averages, and standard deviations, were used. Additionally, inferential statistics were applied to test hypotheses using Multiple Regression Analysis. The study found that personal selling did not influence the evaluation of alternatives, and interactive marketing did not affect problem/need recognition, information search, evaluation of alternatives, or purchase decisions. Except for these instances, the other variables significantly impacted problem/need recognition, information search, evaluation of alternatives, and purchase decisions.

The purpose of the study is to determine how online customer reviews and integrated marketing communications affect the loyalty of consumers to certain skincare products. being aware of how integrated marketing communications and online customer reviews affect consumers' choices to buy certain skincare products. understanding how customer loyalty is influenced by online reviews and integrated marketing communication, which are mediated by choices to buy certain skincare products. This kind of study employs a consumer survey approach using a questionnaire collection technique involving cosmetic consumers in the Bora area. The consumer population in Blora is 232 consumers with a sample of 147 respondents and a nonprobability sampling sample selection method. The SEM PLS 3.2.9 methodology is used in this investigation. The following are the research's conclusions: Customer loyalty to Somethinc Skincare in Blora is positively and significantly impacted by online reviews. Online customer reviews significantly and favorably influence the decision to buy several skincare products. Consumer Loyalty of Somethinc Skincare is positively and significantly impacted by the Online Consumer Review variable. The Consumer Loyalty of Somethinc Skincare in Blora is positively and marginally impacted by the Integrated Marketing Communication variable. The decision to purchase Somethinc Skincare is significantly influenced by integrated marketing communication. Customer loyalty to Somethinc Skincare is positively and significantly impacted by integrated marketing communication. The impact of online customer reviews on customer loyalty may be mitigated by the decision to purchase skincare products. The impact of Integrated Marketing Communication on Customer Loyalty may be mediated by the decision to purchase Somethinc Skincare in Blora.

A significant amount of pharmaceutical marketing literature is available. Most of this marketing has doctors, physicians and specialists as main target audience due to the fact that, historically, these medical professionals were the main pharmaceutical purchase decision makers. Pharmaceutical marketing literature has, historically, also been biased towards the private health sector for obvious reasons as the private health sector constitutes the minority of the pharmaceutical market but with a significantly enormous purchasing power than the public healthcare market, constituting the biggest pharmaceutical market in numbers. It is not surprising therefore that majority of pharmaceutical marketing models have been tailor made for the private healthcare market as the growing number of pharmaceutical companies compete for a piece of the small but extremely profitable private healthcare market. South Africa is no exception as it reflects exactly the same pharmaceutical landscape as described above. For growth purposes, pharmaceutical companies have been showing a continued interest in the public healthcare market in Africa as the vast numbers of the African population present an opportunity for pharmaceutical sales. The inspiration of this research study emanated from the realisation that, in order for pharmaceutical companies to take advantage of the looming African opportunity, there is very little literature on pharmaceutical marketing in the public health sector of which majority of the African market constitutes. This study therefore investigates the impact of marketing communication mix elements on pharmaceutical purchasing decisions for pharmaceuticals in the public health sector in South Africa. Personal selling, public relations and promotions are the marketing communications mix elements being investigated in this study as they are the most commonly utilised in the pharmaceutical industry. Therefore, the study aims to develop an understanding on which of the chosen marketing communications mix elements has the most influence on the pharmaceutical purchasing decisions in the context of the public health sector in South Africa. The study also aims to explore the causal effects of such influences in the public health sector in South Africa. The findings will be valuable to pharmaceutical marketers that are trying to tap in the public health sector market as it is different from the private health sector. The study employs more qualitative approach. A small sample was utilised from the public health sector in the Eastern Cape Province in South Africa. Semi structured interviews were used to collect data which was analysed using grounded theory data analysis methodology. Empirical results revealed that personal selling influences pharmaceutical purchasing decision the most and promotions the least. Mitigating factors were uncovered to assist in optimising the marketing communication efforts for marketers in this sector.

Business Administration/Marketing<br>Ph.D.<br>When making decisions, consumers often do not follow principles of normative economic theories but those of behavioral ones. Framing effect – one of the most robust phenomena in behavioral research – has been found to influence consumers’ choices and judgment in purchase decisions. In price promotion practices, however, it is not well understood whether framing a product replacement purchase as a trade-in or an upgrade affects consumers’ purchase decision making process. This dissertation research aims to explore the trade-upgrade framing effect on product replacement purchase decisions and to examine the mechanisms through which such effect manifests itself. The results have demonstrated that consumers prefer a price promotion framed as upgrade to a financially equivalent one framed as trade-in, especially when the upgrade promotion is presented after the trade-in one. Furthermore, the framing effect and order effect are mediated by affect and influenced by cognitive focus, semantic cues, and systematic processing. The theoretical and practical implications are discussed at the end.<br>Temple University--Theses

The style of a communication may influence a receiver's responses as well as the message's factual, informational content. The degree to which a promotional communication attempts to control a receiver's responses can be defined as a relational and therefore a stylistic variable. This dissertation operationalizes a stylistic variable, directiveness, as the degree to which a persuasive communication instructs the receiver how to respond in terms of action, attitudes and beliefs. Directive messages attempt to limit the receiver's responses while less directive or suggestive messages encourage the reader to make up his or her own mind. Using Attribution Theory and the Cognitive Processing Model as theoretical bases, experimental hypotheses were tested involving the impact of directive versus suggestive messages on receiver responses to one-sided and two-sided communications and high and low involvement topics. Directiveness was found to have significant impact on receiver responses depending on the receiver's level of involvement. The main implication of this research is that how a persuasive communication is worded may influence a receiver's responses to what informational content is presented.<br>Ph. D.

Effective relationship marketing requires accurate measurement of customer tenure/loyalty and a thorough understanding of its impact on firm performance. Although such studies are plentiful for brick-and-mortar firms, few exist for Internet-based E-tailers. Given the visit-intensive customer behavior online, past methods and theories on customer bases analysis and lifetime-profitability relationship based on purchase events may not apply in an e-commerce context. This dissertation proposes a measurement framework that incorporates customers' online visiting behavior both at the in-session, "micro" level and at the long-term, "macro" level using three metrics: session duration, number of pages viewed and online customer lifetime (OCL). Both stochastic model and neural networks are designed and validated for the measurement of OCL. We then study the relationship between customers' online visiting behavior and firm performance by studying five propositions that relate to whether (1) there exists a positive relationship between OCL and customers' purchase intention, (2) customer who spends longer time or view more pages in a session is more likely to buy, (3) customer with longer online lifetime contribute more to firm's profit, (4) customer with longer session duration and more page viewed is more profitable and (5) product type has an impact on the lifetime-purchase and lifetime-profitability relationship.

Knowing what to sell, when to sell, and to whom to sell is essential buyer behavior insight to allocate scarce marketing resources efficiently and effectively. Applying the theory of relationship marketing (Morgan and Hunt 1994), this study seeks to investigate the link between commitment and trust and firm adoption of radically innovative information technology (IT). The construct of radical innovation is operationalized through the use of cloud computing. A review of the vast scholarly literature on radical innovation diffusion and adoption, and modeling techniques used to analyze buyer behavior is followed by empirical estimation of each of the radical innovation adoption questions of purchase timing, brand choice, and purchase amount. Then, the inefficiencies in the independent model process are highlighted, suggesting the need for an integrated model. Next, an integrated model is developed to link the purchase timing, brand choice, and purchase amount decisions. The essay concludes with insight for marketing practitioners on the strength of the factors of commitment and trust on adoption of radical innovation, an improved methodology for the business-to-business marketing literature, and potential further research paths.

[Introduction] The 1980s have ushered in an era of extreme competitive pressure for the modern business organisation. In previous times many business organisations have succeeded simply because of the excellence of their products, with little concern or attention being paid to the wants and needs of potential customers. As the business environment has become more competitive, however, the point of focus has changed. There is ample evidence which suggests a correlation between success in business and firms which have adopted a marketing-orientated philosophy of business. The evolution of marketing as a discipline has been hastened in recent times by the need of the firm to survive in the face of increasing competition. This "increasing attention" is occurring because of the realisation that sheer product excellence alone will not necessarily mean that the firm will succeed in establishing a group of satisfied customers in the long term. It is the adoption of the so-called "marketing concept" which provides the opportunity for the firm to develop a competitive edge which will more likely eventuate in success.

The traditional type of marketing is more directed towards big customer segments in specified areas. Due to technological improvement marketing has evolved into an extreme form of segmentation where marketing target the individual consumer based on their personal needs and preferences. This has led to a discussion of whether personalized marketing is something that create privacy concerns or benefits in the eyes of the consumer.     The purpose of this thesis is to explore the consumer perception of personalized marketing and how the perception affects the purchase decision-making process.   A conceptual framework was developed based on earlier research within personalized marketing. A qualitative method with an abductive approach has been used. Our primary data was collected through 8 different semi-structured interviews and consisted of men and women in the age span of 40-59 years’ old who had engaged in e-commerce at least once during the last six months.   Our empirical data has been analyzed out of the literature review, which founds the basis for our findings. Our findings show that the consumer perception of personalized marketing affect the consumer decision-making process in varying ways. A positive perception of the personalized marketing makes the consumer more susceptible to it, which further impacts the different stages in the process.

Currently, the attention of linguists is attracted by language tools that implement a marketing model of consumer behavior and ensure that the recipient makes a purchase decision. Such studies have led to the formation of a new integrative direction — marketing linguistics. The purpose of this textbook is to reflect the specifics of the impact on the addressee in marketing communication through the use of linguistic means.&#x0D; Meets the requirements of the federal state educational standards of higher education of the latest generation.&#x0D; For undergraduates, postgraduates studying in the fields of "Linguistics", "Domestic Philology", "Philological support of public relations", "Advertising and public relations", "Marketing", as well as researchers and practitioners dealing with advertising and PR.

AbstractThis study aims to: (1) Determine the green marketing strategies Teh Kotak Companies; (2) knowing the brand image of Teh Kotak product; (3) knowing the purchase decision on Teh Kotak product. The research was conducted using quantitative descriptive methods. Samples were taken in the study as many as 330 respondents who consumed Teh Kotak. The data collection method used a questionnaire that had been distributed to respondents. The sampling technique used was purposive sampling technique. The analytical tool used is Multiple Regression analysis. This study shows the results that Green Marketing and brand image have a significant influence toward purchase decision. In the future, Teh Kotak products can maintain and improve green marketing and brand image applied at this time, in future research can use other analysis tools techniques as well as the presence of other variables in order to distinguish the results of previous and post studies.

{In modern commerce, the psycho-social aspects of price have a significant impact on the buyers. The buyer's connection to the price of a product signifies specific substantive characteristics, which inherently contribute to the application of certain factors in marketing for the exploration and examination of the issue at hand. The present study focuses on specific determinants that influence the determination of the final price by the manufacturer, the trade agent (intermediary), and the buyer themselves. Within the scope of the discussion, the primary objective of the research work is associated with highlighting certain theoretical and empirical aspects of the psycho-social influence on the buyer regarding the price of the product, which is based on the dynamics of trade in the Bulgarian context influenced by a range of factors. In its practical orientation, the present study aims to find answers to several marketing questions addressed to the Bulgarian buyer: What factors influence their choice of food? How often do they shop for groceries? Where do they purchase their foodstuffs? In which food groups have prices increased the most? How do our buyers judge the prices of food products? The questions themselves encompass a variety of combinations of answers and dependencies, which presuppose the clarification of the following tasks: a theoretical justification of the problem regarding the psycho-social aspects of price in relation to the buyer based on influencing factors; conducting a survey among 500 Bulgarian buyers of specific food products; processing the results and conducting an empirical analysis to trace the influence of price and the attitude it shapes in the buyer; drawing conclusions, providing theoretical generalization, and reaching a conclusion. The marketing research work is based on the following hypothesis: the selection of a suitable set of factors to determine the influence of prices on the products offered by the manufacturer and the trade agent (intermediary) contributes to the justification and decision-making process that shapes future economic benefits for the enterprise. The research hypothesis may lead us to a "feedback loop" and direct us towards answering the question: "What is the cause of the Bulgarian buyer's disagreement with the current prices of food products offered in our market?" In the marketing interaction of "seller-intermediary-buyer," the product's price emerges as an essential characteristic. To a large extent, it determines, channels, and optimizes these trade interactions. The marketing tracking of the specificity of the psycho-social aspects of price highlights their impact on the buyer in the specific Bulgarian context, thus stimulating the current research interest.}

There Warunk UpNormal uses a variety of promotional strategies, including through social media. Warung UpNormal target market is the millennial segment, which is the largest segment in Indonesia's current demographic structure. Therefore, through social media, Warunk UpNormal establishes intense marketing communication with its target market. The purpose of this paper is to examine the effects of social media marketing and electronic word of mouth on a purchase decision process in Warunk UpNormal. A quantitative research methodology was used for the purpose of this research, and the data were collected from 400 customers of Warunk UpNormal who have seen social media and read reviews provided by Warunk Upnormal. The study finds that customers responded positively to Warunk UpNormal social media content, and they have engagement with Warunk UpNormal through social media. Contrary to expectation, the findings showed that both social media marketing and electronic word of mouth has positives but insignificant effect on the purchase decision process. The finding of this study contributes to an understanding of the selected factors in affecting the customer decision process in Warunk UpNormal.

In the information age, the new consumer is a more demanding one, more involved in the shopping experience thanks to the communication channels in the online environment. This paper examines the effect of digital marketing and online payment systems on the purchase decision at the early stage of the decision process. Today, in the context of an increasingly digital environment, connectivity plays a crucial role in the operational activities of the real sector of the economy, while companies wishing to maintain their market position must understand the factors that, more or less, condition the purchasing decision of consumers. The aim of this research is to assess the potential influence of electronic payment instruments and digital marketing on the consumption trend. The methodological approach is based on general scientific methods and procedures for scientific knowledge of economic processes.The dialectic method, induction and deduction were used in the text of the article, applying logical and comparative analysis. Following the results of the research, it has been established that entrepreneurs who aspire to a favorable brand image must constantly approach the consumer by applying creative ways of the digital world.

Executive Summary This report describes a series of experiments carried out by PRICE Lab, a research programme at the Economic and Social Research Institute (ESRI) jointly funded by the Central Bank of Ireland, the Commission for Energy Regulation, the Competition and Consumer Protection Commission and the Commission for Communications Regulation. The experiments were conducted with samples of Irish consumers aged 18-70 years and were designed to answer the following general research question: At what point do products become too complex for consumers to choose accurately between the good ones and the bad ones? BACKGROUND AND METHODS PRICE Lab represents a departure from traditional methods employed for economic research in Ireland. It belongs to the rapidly expanding area of ‘behavioural economics’, which is the application of psychological insights to economic analysis. In recent years, behavioural economics has developed novel methods and generated many new findings, especially in relation to the choices made by consumers. These scientific advances have implications both for economics and for policy. They suggest that consumers often do not make decisions in the way that economists have traditionally assumed. The findings show that consumers have limited capacity for attending to and processing information and that they are prone to systematic biases, all of which may lead to disadvantageous choices. In short, consumers may make costly mistakes. Research has indeed documented that in several key consumer markets, including financial services, utilities and telecommunications, many consumers struggle to choose the best products for themselves. It is often argued that these markets involve ‘complex’ products. The obvious question that arises is whether consumer policy can be used to help them to make better choices when faced with complex products. Policies are more likely to be successful where they are informed by an accurate understanding of how real consumers make decisions between products. To provide evidence for consumer policy, PRICE Lab has developed a method for measuring the accuracy with which consumers make choices, using techniques adapted from the scientific study of human perception. The method allows researchers to measure how reliably consumers can distinguish a good deal from a bad one. A good deal is defined here as one where the product is more valuable than the price paid. In other words, it offers good value for money or, in the jargon of economics, offers the consumer a ‘surplus’. Conversely, a bad deal offers poor value for money, providing no (or a negative) surplus. PRICE Lab’s main experimental method, which we call the ‘Surplus Identification’ (S-ID) task, allows researchers to measure how accurately consumers can spot a surplus and whether they are prone to systematic biases. Most importantly, the S-ID task can be used to study how the accuracy of consumers’ decisions changes as the type of product changes. For the experiments we report here, samples of consumers arrived at the ESRI one at a time and spent approximately one hour doing the S-ID task with different kinds of products, which were displayed on a computer screen. They had to learn to judge the value of one or more products against prices and were then tested for accuracy. As well as people’s intrinsic motivation to do well when their performance on a task like this is tested, we provided an incentive: one in every ten consumers who attended PRICE Lab won a prize, based on their performance. Across a series of these experiments, we were able to test how the accuracy of consumers’ decisions was affected by the number and nature of the product’s characteristics, or ‘attributes’, which they had to take into account in order to distinguish good deals from bad ones. In other words, we were able to study what exactly makes for a ‘complex’ product, in the sense that consumers find it difficult to choose good deals. FINDINGS Overall, across all ten experiments described in this report, we found that consumers’ judgements of the value of products against prices were surprisingly inaccurate. Even when the product was simple, meaning that it consisted of just one clearly perceptible attribute (e.g. the product was worth more when it was larger), consumers required a surplus of around 16-26 per cent of the total price range in order to be able to judge accurately that a deal was a good one rather than a bad one. Put another way, when most people have to map a characteristic of a product onto a range of prices, they are able to distinguish at best between five and seven levels of value (e.g. five levels might be thought of as equivalent to ‘very bad’, ‘bad’, ‘average’, ‘good’, ‘very good’). Furthermore, we found that judgements of products against prices were not only imprecise, but systematically biased. Consumers generally overestimated what products at the top end of the range were worth and underestimated what products at the bottom end of the range were worth, typically by as much as 10-15 per cent and sometimes more. We then systematically increased the complexity of the products, first by adding more attributes, so that the consumers had to take into account, two, three, then four different characteristics of the product simultaneously. One product might be good on attribute A, not so good on attribute B and available at just above the xii | PRICE Lab: An Investigation of Consumers’ Capabilities with Complex Products average price; another might be very good on A, middling on B, but relatively expensive. Each time the consumer’s task was to judge whether the deal was good or bad. We would then add complexity by introducing attribute C, then attribute D, and so on. Thus, consumers had to negotiate multiple trade-offs. Performance deteriorated quite rapidly once multiple attributes were in play. Even the best performers could not integrate all of the product information efficiently – they became substantially more likely to make mistakes. Once people had to consider four product characteristics simultaneously, all of which contributed equally to the monetary value of the product, a surplus of more than half the price range was required for them to identify a good deal reliably. This was a fundamental finding of the present experiments: once consumers had to take into account more than two or three different factors simultaneously their ability to distinguish good and bad deals became strikingly imprecise. This finding therefore offered a clear answer to our primary research question: a product might be considered ‘complex’ once consumers must take into account more than two or three factors simultaneously in order to judge whether a deal is good or bad. Most of the experiments conducted after we obtained these strong initial findings were designed to test whether consumers could improve on this level of performance, perhaps for certain types of products or with sufficient practice, or whether the performance limits uncovered were likely to apply across many different types of product. An examination of individual differences revealed that some people were significantly better than others at judging good deals from bad ones. However the differences were not large in comparison to the overall effects recorded; everyone tested struggled once there were more than two or three product attributes to contend with. People with high levels of numeracy and educational attainment performed slightly better than those without, but the improvement was small. We also found that both the high level of imprecision and systematic bias were not reduced substantially by giving people substantial practice and opportunities to learn – any improvements were slow and incremental. A series of experiments was also designed to test whether consumers’ capability was different depending on the type of product attribute. In our initial experiments the characteristics of the products were all visual (e.g., size, fineness of texture, etc.). We then performed similar experiments where the relevant product information was supplied as numbers (e.g., percentages, amounts) or in categories (e.g., Type A, Rating D, Brand X), to see whether performance might improve. This question is important, as most financial and contractual information is supplied to consumers in a numeric or categorical form. The results showed clearly that the type of product information did not matter for the level of imprecision and bias in consumers’ decisions – the results were essentially the same whether the product attributes were visual, numeric or categorical. What continued to drive performance was how many characteristics the consumer had to judge simultaneously. Thus, our findings were not the result of people failing to perceive or take in information accurately. Rather, the limiting factor in consumers’ capability was how many different factors they had to weigh against each other at the same time. In most of our experiments the characteristics of the product and its monetary value were related by a one-to-one mapping; each extra unit of an attribute added the same amount of monetary value. In other words, the relationships were all linear. Because other findings in behavioural economics suggest that consumers might struggle more with non-linear relationships, we designed experiments to test them. For example, the monetary value of a product might increase more when the amount of one attribute moves from very low to low, than when it moves from high to very high. We found that this made no difference to either the imprecision or bias in consumers’ decisions provided that the relationship was monotonic (i.e. the direction of the relationship was consistent, so that more or less of the attribute always meant more or less monetary value respectively). When the relationship involved a turning point (i.e. more of the attribute meant higher monetary value but only up to a certain point, after which more of the attribute meant less value) consumers’ judgements were more imprecise still. Finally, we tested whether familiarity with the type of product improved performance. In most of the experiments we intentionally used products that were new to the experimental participants. This was done to ensure experimental control and so that we could monitor learning. In the final experiment reported here, we used two familiar products (Dublin houses and residential broadband packages) and tested whether consumers could distinguish good deals from bad deals any better among these familiar products than they could among products that they had never seen before, but which had the same number and type of attributes and price range. We found that consumers’ performance was the same for these familiar products as for unfamiliar ones. Again, what primarily determined the amount of imprecision and bias in consumers’ judgments was the number of attributes that they had to balance against each other, regardless of whether these were familiar or novel. POLICY IMPLICATIONS There is a menu of consumer polices designed to assist consumers in negotiating complex products. A review, including international examples, is given in the main body of the report. The primary aim is often to simplify the consumer’s task. Potential policies, versions of which already exist in various forms and which cover a spectrum of interventionist strength, might include: the provision and endorsement of independent, transparent price comparison websites and other choice engines (e.g. mobile applications, decision software); the provision of high quality independent consumer advice; ‘mandated simplification’, whereby regulations stipulate that providers must present product information in a simplified and standardised format specifically determined by regulation; and more strident interventions such as devising and enforcing prescriptive rules and regulations in relation to permissible product descriptions, product features or price structures. The present findings have implications for such policies. However, while the experimental findings have implications for policy, it needs to be borne in mind that the evidence supplied here is only one factor in determining whether any given intervention in markets is likely to be beneficial. The findings imply that consumers are likely to struggle to choose well in markets with products consisting of multiple important attributes that must all be factored in when making a choice. Interventions that reduce this kind of complexity for consumers may therefore be beneficial, but nothing in the present research addresses the potential costs of such interventions, or how providers are likely to respond to them. The findings are also general in nature and are intended to give insights into consumer choices across markets. There are likely to be additional factors specific to certain markets that need to be considered in any analysis of the costs and benefits of a potential policy change. Most importantly, the policy implications discussed here are not specific to Ireland or to any particular product market. Furthermore, they should not be read as criticisms of existing regulatory regimes, which already go to some lengths in assisting consumers to deal with complex products. Ireland currently has extensive regulations designed to protect consumers, both in general and in specific markets, descriptions of which can be found in Section 9.1 of the main report. Nevertheless, the experiments described here do offer relevant guidance for future policy designs. For instance, they imply that while policies that make it easier for consumers to switch providers may be necessary to encourage active consumers, they may not be sufficient, especially in markets where products are complex. In order for consumers to benefit, policies that help them to identify better deals reliably may also be required, given the scale of inaccuracy in consumers’ decisions that we record in this report when products have multiple important attributes. Where policies are designed to assist consumer decisions, the present findings imply quite severe limits in relation to the volume of information consumers can simultaneously take into account. Good impartial Executive Summary | xv consumer advice may limit the volume of information and focus on ensuring that the most important product attributes are recognised by consumers. The findings also have implications for the role of competition. While consumers may obtain substantial potential benefits from competition, their capabilities when faced with more complex products are likely to reduce such benefits. Pressure from competition requires sufficient numbers of consumers to spot and exploit better value offerings. Given our results, providers with larger market shares may face incentives to increase the complexity of products in an effort to dampen competitive pressure and generate more market power. Where marketing or pricing practices result in prices or attributes with multiple components, our findings imply that consumer choices are likely to become less accurate. Policymakers must of course be careful in determining whether such practices amount to legitimate innovations with potential consumer benefit. Yet there is a genuine danger that spurious complexity can be generated that confuses consumers and protects market power. The results described here provide backing for the promotion and/or provision by policymakers of high-quality independent choice engines, including but not limited to price comparison sites, especially in circumstances where the number of relevant product attributes is high. A longer discussion of the potential benefits and caveats associated with such policies is contained in the main body of the report. Mandated simplification policies are gaining in popularity internationally. Examples include limiting the number of tariffs a single energy company can offer or standardising health insurance products, both of which are designed to simplify the comparisons between prices and/or product attributes. The present research has some implications for what might make a good mandate. Consumer decisions are likely to be improved where a mandate brings to the consumer’s attention the most important product attributes at the point of decision. The present results offer guidance with respect to how many key attributes consumers are able simultaneously to trade off, with implications for the design of standardised disclosures. While bearing in mind the potential for imposing costs, the results also suggest benefits to compulsory ‘meta-attributes’ (such as APRs, energy ratings, total costs, etc.), which may help consumers to integrate otherwise separate sources of information. FUTURE RESEARCH The experiments described here were designed to produce findings that generalise across multiple product markets. However, in addition to the results outlined in this report, the work has resulted in new experimental methods that can be applied to more specific consumer policy issues. This is possible because the methods generate experimental measures of the accuracy of consumers’ decision-making. As such, they can be adapted to assess the quality of consumers’ decisions in relation to specific products, pricing and marketing practices. Work is underway in PRICE Lab that applies these methods to issues in specific markets, including those for personal loans, energy and mobile phones.