- Published: November 16, 2022
- Updated: November 16, 2022
- Language: English
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Article: Placebo Effects of Marketing Actions: Consumers May Get What They Pay For by Shiv et al. (2005)
Shiv and colleagues looked at how beliefs and expectations brought about by marketing actions can cause an effect on the actual efficacy of the marketed product (Shiv et al., 2005). In the preliminary study, an energy drink was either sold at its regular price or discounted price, and effect of price of drink on the participant’s fatigue level after workout was studied. Participants were randomly assigned to either the regular price group or the discounted price groups.
In the following three other experiments, participants were also randomly assigned to either regular, discounted price or the control group. Experiment 1 introduced expectancy-strength conditions by asking participants to rate effectiveness of the energy drink, to test if expectation mediates price of drink and performance on puzzle task. Experiment 2 manipulated price-efficacy link by making participants more aware of the price they paid and the effects they should expect from the drink. Experiment 3 manipulated expectancy-strength conditions by including statements that suggest effectiveness of energy drink in improving mental functioning. Results showed that the participants’ expectations of how well they could solve the puzzle mediated the price effect on their ability to solve puzzles. The author concluded that expectations mediated marketing actions and can be manipulated by external cues, and that the process of expectations leading to placebo effect is an unconscious one. In addition, cognitive dissonance, distractions due to discount and mood states were ruled out as possible explanations for the observed placebo effect.
Marketing strategies are common and widespread today, appearing in different forms ranging from packaging to deals and promotions, which can actually affect the actual efficacy of the marketed products. Extrinsic properties of products can lead to increased or decreased consumers’ expectations of how good these products are.
Most people are also classically conditioned to think that price levels reflect quality of products (Huber & McCann, 1982; Rao & Monroe, 1988, 1989), which gave rise to these expectations. These processes may take place unconsciously, and consumers may not know it. Ethical issues may then arise, as the effect of expectations on actual performance of products can be used as a reason for unfair price increase of products.
Previous studies found that beliefs and expectations can affect both subjective experiences (Allison and Uhl, 1964; McClure et al., 2004) and judgments (Levin and Gaeth, 1988). Hence, this study aimed to learn more about effects of expectations beyond subjective experiences and judgments. This study investigated extensively on the effects and nature of expectations, to learn more about effects of marketing actions on actual efficacy of products.
This study obtained results that allowed us to understand more about the effects of marketing actions. Taken together, these studies suggest that marketing action can affect our expectations of products and lead to change in subjective experience and judgment towards the products, as well as change in the products’ actual efficacy.
There are two points that I do not fully agree with the author. The first point has to do with the price discount compared to the actual price of the energy drink. In Shiv’s study, both the regular price of the product and its discounted price were made known to the participants in the discounted price group, but there were no explanations given as to why participants ignored the regular price of the drink but instead focused on the discounted price. If participants were unconsciously associating regular price to value, then the placebo effect should not be present. There should be an attempt to identify why people associate discounted price with product instead of the regular price. It could be that the act of paying for the drink at the discounted price led to the unconscious association of paid price to value of product. If this is true, then there might be a process underlying the act of paying that leads to the placebo effect, and should be investigated. However in the preliminary experiment, the placebo effect was also present even though participants did not pay for the drink. Hence, it could be that discounting the price of a product led to an unconscious process of devaluing it.
Another point is regarding the prices of the products. The author pointed out about the dissonance effect as a result of participants paying for the regular price of the drink. However, the study did not mention that the participants in the regular price group knew of the discounted price. Without the knowledge of the discounted price, dissonance effect might not be present in the first place. Cognitive dissonance theory supports the view that people who paid more for a marketed product would justify their behavior through changes in their cognition, and would therefore judge the product as better than one of cheaper price (Festinger, 1957). In a similar sense, I think that participant who paid more for the drink would rationalize that the drink should have a larger beneficial effect to justify for its higher price, which should lead to increase in expectation as well. Hence, participants in the regular price group should be placed in a situation where they knew about the discounted price drink but still had to pay for the full price due to manipulations.
Other than the two points above, I think that the study was rigorous in identifying and accounting for explanations other than expectations that could lead to the observed placebo effect. By demonstrating how increase in strength of expectations could lead to both positive placebo and negative placebo effects through the manipulation of expectations, and how results are consistent with changes in expectations and not mood states or distracting thoughts, the study was able to create a coherent account on how expectations mediated price paid and performance of participants. There were many creative methods used to test for mood states, to increase expectations and price-efficacy link without explicitly telling the participants. The study was also able to determine that the process of expectations on the placebo effect is an unconscious one.
The implications of this studies are very important, as it affects both the consumers and the retailers. This paper highlights the link between price and quality of products. Retailers may end up in an ethical dilemma as they can justify the act of increasing prices of their products to increase actual quality, or may be reluctant to promotions to increase sales if discounts might lead to decrease in actual quality of their products. For consumers, different prices of the same good may lead to different outcomes on consumers, which could have serious consequences such as consumption of long-term medication sold at discounted rates. As the process leading to this placebo effect is an unconscious one, policies and advertisement should make use of strategies to increase awareness of the price-efficacy link to remove such placebo effects. In addition, other moderators such as time delay should be tested to see if the placebo effect could be removed/enhanced in certain situations.
Allison, Ralph I. and Kenneth P. Uhl (1964), “ Influence of beer brand identification on taste perception,” Journal of Marketing Research , 1 (August), 36-39.
Festinger Leon (1957), “ A theory of Cognitive Dissonance,” Stanford University Press , Stanford, CA
Huber, Joel and John McCann (1982), “ The impact of inferential beliefs on product evaluations,” Journal of Marketing Research , 19 (August), 324-33.
Levin, Irwin P. and Gary J. Gaeth (1988), “ How consumers are affected by the framing of attribute information before and after consuming the product,” Journal of Consumer Research , 15 (December), 374-78.
McClure, Samuel M., Jiam Li, Damon Tomlin, Kim S. Cypert, Latané M. Montague, and P. Read Montague (2004), “ Neural correlates of behavioral preference for culturally familiar drinks,” Neuron , 44 (October), 379-87.
Rao, Akshay R. and Kent B. Monroe (1988), “ The moderating effect of prior knowledge on cue utilization in product evaluations,” Journal of Consumer Research , 15 (September), 253-64.
Shiv, Baba, Ziv Carmon, and Dan Ariely (2005), “ Placebo effects of marketing actions: consumers may get what they pay for”. Journal of Marketing Research 42. 4 (November), 383-393.
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