What's in a name? The impact of subcategory salience on value perception and upgrade intention for multicategory products

• Main Authors: HAN, Jin K., CHUNG, Seh-Woong, SOHN, Yong Seok
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: convergence product; intrinsic motivation; product replacement; subordinate label; superordinate label; willingness-to-pay; willingness-to-upgrade; Marketing; Sales and Merchandising
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5899; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6898/viewcontent/What_is_in_a_name_2017_pp.pdf
• Institution: Singapore Management University

Despite many convergence products rapidly approaching market saturation, academic research yet lags behind with the focus still on the primary demand in the introduction stage. The authors close this gap by focusing on how the labeling of convergence products may impact on value perception and upgrade intentions for these products. Convergence products, which combine multiple categories of products into a single device, create a unique naming dilemma for manufacturers and retailers: Whether to opt for (a) a subordinate label—a lower‐level descriptor or name that embodies its subcategory elements (e.g., smartphone or Apple’s iPhone) or (b) a superordinate label—a higher‐level descriptor or name which transcends its subcategories (e.g., multifunctional device or Samsung’s Galaxy). The authors investigate the effects of labeling choices (i.e., subordinate vs. superordinate) on consumer value perception and upgrade intention. Results of four studies demonstrate that the labeling options exert differential effects on perceived value and upgrade intention, while the use of subordinate (vs. superordinate) label lowers the present perceived value, it raises consumer’s intention to upgrade to a newer‐generation product.