The Impact of Product-Related Announcements on Consumer Purchase Intentions

Advances in Consumer Research, Vol. 17 Issue 1, pp. 342-350, 1990

10 Pages Posted: 1 Jun 2016

See all articles by Raymond R. Burke

Raymond R. Burke

University of Pennsylvania - The Wharton School

Jaewun Cho

Arizona State University (ASU)

Wayne S. DeSarbo

Pennsylvania State University

Vijay Mahajan

University of Texas at Austin - Department of Information, Risk and Operations Management

Date Written: 1990

Abstract

This paper investigates the impact of brand, product, and industry announcements on consumers' intentions to purchase alternative brands of microcomputers. Results suggest that (1) negative announcements, in general, have a greater effect than positive announcements, (2) announcements regarding the entire industry tend to have a greater impact than announcements about a specific brand or set of brands, and (3) announcements are more likely to affect the evaluations of brands in the choice set than those of brands not in the choice set. Managerial implications of these results are discussed. Product-related announcements are formal communications that provide new information to consumers about a product's availability, features, applications, defects, or its discontinuation. Such announcements may be created by design or accident, and are originated by competitors, regulatory agencies, consumer and environmental groups, and many times by manufacturers themselves. Both favorable and unfavorable in nature, product announcements may consist of (Mahajan, Müller and Kerin 1984):

* Brand related information-such as the unintended acceleration problem with the Audi 5000 S (Manning 1987); * Product category related information-such as the finding that aspirin can reduce the risk of heart attack (Dallas Morning News 1988a); * Industry related information-such as the health and environmental effects of fluorocarbons in aerosol cans (Margolies 1976).

In many instances, product-related announcements are made or encouraged by a manufacturer as part of a marketing strategy to create a more conducive environment for the acceptance of its product in the marketplace (Wind and Mahajan 1987). For example, a manufacturer may announce a new product well before it is ready for sale, hoping to get customers to wait for this product rather than buy a competitor's product in the interim (Porter 1980, p.77; Brock 197S). On the other hand, a competitor may announce a new technology-based product hoping to redefine the attributes that customers use to evaluate the various brands that axe currently available (e.g., IBM's announcement of its Personal System 2 computers, Mitchell 1987, or NutraSweet's announcement of a new low-calorie, low-cholesterol substitute for cooking oil, Dallas Morning News 1988b). In that context, such announcements can serve as market signals to preempt other competitors from the marketplace (Porter 1980, p.76).

Little effort has been made to systematically examine the effects of product-related announcements on consumer purchase intentions. Through an understanding of this relationship, marketers can evaluate the usefulness of announcements as a strategic tool to influence consumer decisions. Eliashberg and Robertson (1988) report that a firm's expectations about consumer response to announcements are the main determinant of whether the firm will pre-announce new products. Furthermore, this information can be incorporated in consumer adoption and diffusion models to improve the prediction of consumer behavior (Midgley 1976; Mahajan, Müller, and Kerin 1984).

This paper attempts to empirically address a few basic questions about consumer response to product-related announcements. Do product-related announcements have an effect on consumers' brand purchase intentions? Does the size of this effect depend on the direction or breadth of the message? Do product-related announcements affect the evaluations of all available brands or just a select few? Are consumers more likely to change their evaluations of brands in their choice sets than those of brands that are not? The next section of the paper details the propositions associated with these questions. The study design and empirical results are then presented. The paper concludes with a discussion of the implications, limitations, and future directions of this research.

Suggested Citation

Burke, Raymond R. and Cho, Jaewun and DeSarbo, Wayne S. and Mahajan, Vijay, The Impact of Product-Related Announcements on Consumer Purchase Intentions (1990). Advances in Consumer Research, Vol. 17 Issue 1, pp. 342-350, 1990, Available at SSRN: https://ssrn.com/abstract=2787262

Raymond R. Burke

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Jaewun Cho

Arizona State University (ASU)

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Vijay Mahajan

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

Red McCombs School of Business
2100 Speedway, #B6600
Austin, TX 78712
United States

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