Consumers are willing to buy multiple formats of content when they can count on consistent quality and use the formats in different ways.
The key is for companies to offer consumers formats that are equal in quality, but useful for different reasons. This is a big shift in thinking – Kannan and Kirmani say the content should be the focus. For years, content producers have been focused on targeting different groups of consumers. The assumption has been that certain people prefer specific formats of content – for example, some Wall Street Journal readers want their news on their iPads while others prefer that familiar touch and smell of newsprint to thumb through with their morning coffee. But those profiles easily describe the same person who wants their content at the breakfast table and on the go online. And that consumer is willing to pay for both.
Kannan and Kirmani worked with Nevena Koukova, a Smith PhD alumna now at Lehigh University, to conduct three studies to determine what factors could entice consumers to purchase more than one format of content. In the first, they surveyed a book publisher’s actual customers to measure how they rated the quality of print and PDF versions of the same book and whether they saw the two as substitutes or complements to be used in different situations. In study two, the team looked at purchase behavior – whether consumers were likely to buy either the digital or hard-copy products, or spring for the bundle of both products. For study three, the researchers designed a lab experiment with a questionnaire to test when consumers would purchase a bundle of DVD and online streaming services rather than either a DVD alone or online streaming alone.
In all three studies, the researchers found that when consumers deemed the two formats of equal quality and could see unique uses for each format, they wanted to buy both formats.
Kannan likens the findings to shoe-shopping, where many consumers wouldn’t hesitate to buy the same pumps or loafers in both black and brown, simply because each would match better with different outfits. Marketers need to get consumers thinking about the ways they can use each version of the same product.
“The key is that the formats have to be of equal quality on attributes a consumer cares about,” said Kirmani. “When a consumer thinks two versions are equal on attributes they consider important — whether equally high quality or equally low quality — those attributes essentially cancel each other out. If you can get people to think about the unique occasions in which they would use one version or the other, then their perceived value of the bundle goes up. That’s the trick here – make them think about the different ways they could use each version to get people to buy both. ”
That’s why Kannan and Kirmani lamented the Netflix decision to separate its content streams – they contend the company should have revisited the way they were bundling their products instead.
“Multi-Format Digital Products: How Design Attributes Interact with Usage Situations to Determine Choice,” is forthcoming in the Journal of Marketing Research. For more information, contact P.K. Kannan or Amna Kirmani.
|Previous Article||Table of Contents||Next Article|