Effect of Mood onConsumer Behavior

Agenda Question Design Analysis/Results Implications Limitations Q&A

1. Research Question2. Experimental Design/Hypothesis3. Statistical Analysis4. Marketing Implications5. Limitations6. Q&A

Agenda

Agenda Question Design Analysis/Results Implications Limitations Q&A

Research Question

How does a person’s mood affect their reaction to price discounts?

Will a person in a sad mood need a larger discount to purchase a product compared to a person in a happy mood?

Agenda Question Design Analysis/Results Implications Limitations Q&A

Hypothesis

People given the “happy” treatment are more likely to purchase the product with 10% discount than people given the “sad” treatment

People in a sad mood will require a greater discount to be persuaded to purchase the same discounted (10%) product.

People will choose phone with small discount (10%) over non-discounted phone

Overall people will choose heavily discounted (40%) more often

Agenda Question Design Analysis/Results Implications Limitations Q&A

Experimental Design

Agenda Question Design Analysis/Results Implications Limitations Q&A

Experimental Design

2 (mood, between) by 2 (discount %, between)

Agenda Question Design Analysis/Results Implications Limitations Q&A

Procedure

Agenda Question Design Analysis/Results Implications Limitations Q&A

15 surveys per treatment were administered

1. Mood manipulation2. Choice between

phones3. Rating mood4. Unrelated

questions

Experimental Design

Y11

Y21

Y22

Y12

X11

X11

X21

X22

X12

X12

X21

X22

Compa

rison

s

Agenda Question Design Analysis/Results Implications Limitations Q&A

Statistical Analysis

Agenda Question Design Analysis/Results Implications Limitations Q&A

Raw Data Direct Comparison

Statistical Analysis

Agenda Question Design Analysis/Results Implications Limitations Q&A

• In both “happy” groups, subjects more likely to choose A over B

• Z test not statistically significant

• Subjects in “happy” condition more likely to choose A

• Subjects in “sad” condition more likely to choose B

• Z test marginally significant

• z = -1.89434

Statistical Analysis

Agenda Question Design Analysis/Results Implications Limitations Q&A

• When given the choice of 40% discount, subjects chose A

• Z test significant; z = 2.32379

• Subjects in “sad” treatment equally likely to choose A when given 40%

• Subjects overwhelmingly chose A

• Z test not statistically significant

• 40% dominated consumer choice, regardless of mood

Statistical Analysis

  Happy 10% Happy 40% Sad 10% Sad 40%

Phone A 12 11 7 13

Phone B 3 4 8 2

Prop Choice 1 0.8 0.73 0.467 0.867

z-test results: pooled estimate pooled SE z

Happy_10 vs. Happy_40 0.766667 0.15444 -0.43167

Happy_10 vs. Sad_10 0.633333 0.175963 -1.89434

Sad_10 vs. Sad_40 0.666667 0.172133 2.32379

Happy_40 vs. Sad_40 0.8 0.146059 0.912871

SIGNIFICANCE

  if then if then

    sig   marginally sig.

two-tail test z >+-1.96 p < .05 z >+-1.64 p < .10

Agenda Question Design Analysis/Results Implications Limitations Q&A

Marketing Implications

Conclusions:

• People in a happier mood will be content with a smaller discount

• People in a sad mood will require larger discount

• Emotions and mood have significant impact on consumer choice

Agenda Question Design Analysis/Results Implications Limitations Q&A

Marketing ImplicationsApplications:

• Retail stores

– Color schemes

– Customer Service

– Upbeat music

• Television ads

• Create maintain a lasting connection between customer and product

• Less discounting = higher profit margins

Agenda Question Design Analysis/Results Implications Limitations Q&A

Limitations• Sample size too small

• Limited pool of subjects

• Mood manipulation not always effective

• Writing may affect emotion and not mood

• Direct mood manipulation may not have external validity

• Differences in image on survey – prior experience with phone

• Process of choosing a phone (or product) is greatly simplified

Agenda Question Design Analysis/Results Implications Limitations Q&A

Q & A

Agenda Question Design Analysis/Results Implications Limitations Q&A