(Poor) Seeing is Believing: When Direct Experience Impairs Product Promotion

49 Pages Posted: 30 Jan 2016 Last revised: 15 Apr 2016

See all articles by Eyal Ert

Eyal Ert

The Hebrew University of Jerusalem, Dept. of Environmental Economics and Management

Ornit Raz

Massachusetts Institute of Technology (MIT)

Amir Heiman

The Hebrew University of Jerusalem, Dept. of Environmental Economics and Management

Date Written: December 13, 2015

Abstract

Marketing tools that enable pre-purchase experience (e.g., product trials, sampling) are considered efficient means of reducing uncertainty and increasing demand for unfamiliar products. It is widely agreed that having more information improves the quality of choice, so demonstrations, sampling, and other experience-generating marketing tools are expected to increase consumers’ welfare. The current paper challenges this concept by suggesting that experiencing some product types for a limited time might provide unrepresentative information, and thus might result in suboptimal choices. In three experiments, we evaluated the effect of potentially unrepresentative experience on consumer product acceptance. The results show that while experiencing products affects consumers even when it provides little information, the effect might be positive or negative, depending on the product value distribution. Specifically, short experience with the product increases the appeal of negatively skewed products, which appear appealing after a short, yet unrepresentative experience. Yet short experience impairs the appeal of positively skewed products, which appear unappealing given short or low-intensity experience. This pattern emerges even though the most likely result of a given sample is not a good predictor of the expected utility of the product. Theoretical and practical implications are discussed.

Keywords: demonstration; learning; product pre-purchase experience; sampling

Suggested Citation

Ert, Eyal and Raz, Ornit and Heiman, Amir, (Poor) Seeing is Believing: When Direct Experience Impairs Product Promotion (December 13, 2015). Available at SSRN: https://ssrn.com/abstract=2724084 or http://dx.doi.org/10.2139/ssrn.2724084

Eyal Ert

The Hebrew University of Jerusalem, Dept. of Environmental Economics and Management ( email )

P.O. Box 12
Rehovot, 76100
Israel

Ornit Raz

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Amir Heiman (Contact Author)

The Hebrew University of Jerusalem, Dept. of Environmental Economics and Management ( email )

P.O. Box 12
Rehovot, 76100
Israel

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