BUSI 332 Week 2 Discussion Board Forum 1 Replies Example

Discussion Board Forum 1 Replies: Responding to Classmates on Value

BUSI 332 Consumer Behavior, Discussion Board Forum 1 Replies

Thread by [Student Name]

The classmates and their threads are composites; the textbook and research cited are real.

Reply to Jasmine

Jasmine, your thread argued that the grocery chain's loyalty program should reward frequent shoppers with straightforward discounts, since grocery shopping is mostly about utilitarian value. I agree the trip itself is utilitarian, and Babin and Harris (2016) would describe most grocery purchases that way. I think the reward may be a different matter.

Kivetz and Simonson (2002) ran experiments on frequency programs and found that when customers had to put in more effort to earn a reward, they became more likely to choose a luxury reward, such as a spa treatment, over a practical one of similar value, such as a grocery credit. The effort seemed to give people permission to indulge, reducing the guilt they would otherwise feel about choosing something frivolous. Shoppers who had to buy many times to qualify felt they had earned something special.

For the grocery chain, that suggests offering a choice at the top tier: a discount for those who want it, and an indulgent option, such as a cooking class or a gourmet basket, for customers who have shopped consistently all year. The utilitarian trip could end with a hedonic reward, which might strengthen the emotional tie that a discount alone does not create, and it would give loyal shoppers something to talk about.

Do you think the chain's most loyal customers would choose the discount or the indulgent reward if both were offered? It might be worth testing both in a few stores, since the answer could differ between busy families, who may value the savings, and empty-nest couples, who may enjoy the treat.

Reply to Marcus

Marcus, your thread said the discount store offers the most value because its prices are lowest, and you are right that price is a major part of what customers give up. Babin and Harris (2016) define value as what is received relative to what is sacrificed, and I would add that sacrifice includes more than money.

From focus groups and interviews about drinks and other products, Zeithaml (1988) concluded that shoppers weigh everything they get against everything they surrender when they judge value. What is given includes the monetary price but also nonmonetary costs such as time, effort and search, and what is received includes quality and other benefits. Some respondents defined value simply as low price, but many described it as getting what they wanted for what they gave.

That view helps explain why some shoppers pay more elsewhere. If the discount store is far away, crowded and slow at checkout, a busy parent might judge a slightly more expensive store nearby as better value, because it costs less time. Time is often the scarcest resource for the shoppers stores most want to keep.

How do you think the discount store could reduce the nonmonetary costs of shopping without raising its prices? Options such as online ordering with curbside pickup or more checkout lanes at peak hours might cost little compared with the customers they keep, and they would strengthen the store's value in exactly the way Zeithaml describes.

References

Babin, B. J., & Harris, E. G. (2016). CB7 (7th ed.). Cengage Learning.

Kivetz, R., & Simonson, I. (2002). Earning the right to indulge: Effort as a determinant of customer preferences toward frequency program rewards. Journal of Marketing Research, 39(2), 155-170. https://doi.org/10.1509/jmkr.39.2.155.19084

Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence. Journal of Marketing, 52(3), 2-22. https://doi.org/10.1177/002224298805200302