With the cost of living being squeezed, consumers are making ever tighter comparisons about products, but how can they be encouraged to make the best possible choices for them?
When something bad happens, we are far more likely to interrogate it than when something good happens. In other words, “bad” secures more attention than “good”.
How does this relate to purchase decisions involving a comparison between two products, where one is better than the other in terms of quality, price, size or some other feature? Specifically, do consumers evaluate products differently depending on whether one is slightly better or much better than the other?
We already know that, when consumers compare a worse product to a better product, the comparison makes the worse product seem even worse (this is known as negative contrast), and the better product seem even better (this is known as positive contrast), than they would have seemed if either had been considered in isolation. We also know qualitative assessments (deciding which product is better) require less thorough processing than quantitative assessments (deciding how much better it is). And, as we’ve already established, we tend to assess positive information less thoroughly than negative information.
Put together, this suggests the thought process involved in negative contrast is quantitative, while the thought process involved in positive contrast is qualitative. So, the qualitative thought process involved in positive contrast is unaffected by the size of the difference between the products, but the same is not true of the quantitative thought process involved in negative contrast. This leads us to think that the bigger the difference, the worse the inferior product seems while perceptions of the superior product remain unchanged.
We conducted four main studies to test this theory and some of its implications:
- Study 1 focused on purchase decisions and found the size of the difference between items affected the attractiveness of the worse, but not the better, item.
- Study 2 showed an item is more attractive if it represents a smaller, rather than larger, trade-off relative to another item because the size of the difference between items affects evaluations of an item’s worse attribute but not evaluations of its better attribute.
- Study 3 showed an item appears superior (relative to how it appears in isolation) to the same extent regardless of whether it is slightly better or much better than the item next to it, whereas a worse item appears much worse if the difference between the items is greater. Consequently, when the difference between items is small, positive contrast is stronger than negative contrast (this is particularly remarkable given that, in most situations, people are more affected by negative things than by positive things).
- Study 4 showed that prompting consumers to compare items quantitatively – taking into consideration both the direction and the size of the difference between the inferior and the superior products – ensures positive contrast and negative contrast are equally affected by the degree of difference between the items.
So, what implications can we draw from this for purchasing decisions?
The comparisons retailers facilitate may have a disproportionate effect on evaluations of superior and inferior products. Displaying products side by side makes the better products seem more attractive and the worse products seem less attractive. However, a line-up of products that have significant quality differences may make the much inferior products significantly less attractive without having a comparable uplift in the appeal of the much superior products.
To make better choices, consumers should be encouraged to make quantitative comparisons. Encouraging consumers to consider the degree of the difference between products would help them avoid giving too much weight to minor differences, and make a more informed, more objective decision.
Manufacturers may benefit from offering product ranges with minor differential features. Small differences between products may make the better products much more attractive without making the worse products significantly less attractive. Therefore, it might sometimes be better for manufacturers to introduce minor differences in product features within their range, provided these differences are clear to consumers.
Manufacturers may benefit from improving features that underperform against competitors, rather than improving features that already outperform competitors. This is because consumers tend to pay attention to the extent to which products are worse than the alternatives – but not to the extent to which products are better than the alternatives.
Significant investment is made by manufacturers and retailers to influence purchasing decisions. Understanding the different decision-making processes involved in how consumers compare products can inform manufacturer and retailer strategies, as well as helping them encourage consumers to make better informed purchasing decisions.
This article draws on findings from "Negative Contrast is Quantitative and Positive Contrast is Qualitative" by Guy Voichek (Imperial College London) and Nathan Novemsky (Yale University).