Faculty of Economics and Business Administration Publications Database

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

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Authors:
Dost, Florian
Wilken, Robert
Eisenbeiß, Maik
Source:
Volume: 90
Number: 3
Pages: 393 - 407
Month: September
ISSN-Print: 0022-4359
Link External Source: Online Version
Year: 2014
Keywords: Targeting; Willingness-to-pay range; Indecisive buyer; Segmentation
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.

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