How Salary Receipt Affects Consumers' Regulatory Motivations and Product Preferences

Himanshu Mishra, Arul Mishra, and Dhananjay Nayakankuppam
Journal of Marketing
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Executive Summary
Regulatory focus theory posits that people can achieve satisfaction by adopting an accomplishment-oriented, promotion-focused strategy or a security-oriented, prevention-focused strategy. The authors demonstrate that when consumers are temporally near their last salary receipt, they display promotion-oriented motivations and prefer products with promotion attributes (e.g., a fitness program that emphasizes physical activity to attain better health). However, as they temporally move away from salary receipt (i.e., significant time has elapsed since the last salary receipt), their motivations become more prevention oriented, and they prefer products with prevention attributes (e.g., a fitness program that emphasizes reducing the intake of unhealthful foods to prevent loss of health). The authors suggest that the shift between promotion and prevention motivation, as a function of temporal distance from last salary receipt, occurs because consumers can achieve satisfaction either by aspiring to attain more or by striving to avoid losses. The receipt of salary provides a person with a sense that he or she has the required means to pursue certain aspirations, creating a motivational state of promotion. Conversely, if a person is temporally far from his or her last salary receipt, the most salient way to attain satisfaction and happiness is by maintaining what he or she has, creating a motivational state of prevention. Therefore, distance from last salary receipt (near-salary versus far-from-salary) creates promotion or prevention motivations and, consequently, influences consumer preferences. In these studies, the authors rue out alternate accounts based on felt liquidity.

The authors conducted two month-long studies to test their predictions. The studies only recruited participants who were employed and received a regular salary. The studies demonstrated the proposed effect both in actual purchases and in product choices. For example, to test this effect in actual purchase behavior, Study 1 asked participants to categorize their actual purchases into “aspired” (promotion-focused products) and “ought” (prevention-focused products) categories after every shopping trip. The results indicated that participants bought more aspired products in the near-salary condition and more ought products in the far-from-salary condition. In addition, a regulatory focus scale recorded the decreasing level of promotion focus as participants moved temporally away from last salary receipt. Study 2 replicated these results and tested the proposed underlying process.

The findings have several implications for managers. Because distance from the last salary receipt changes a person’ regulatory motivations, managers can tailor their marketing efforts to initiate promotion-focused activities nearer to salary receipt and to initiate prevention-focused activities far from salary receipt. The authors predict that it would be more effective to launch new products at the beginning of the month (presumably, when people are near their paycheck and are therefore more promotion focused) rather than at the end of the month, when people tend to be more prevention focused. Considering that promotion-focused consumers seek more change while prevention-focused consumers prefer avoiding losses, the findings suggest that companies should focus on recruitment in the near-salary condition and on consumer retention in the far-from-salary condition. Finally, instead of demonstrating regulatory motivations in a lab setting, the authors show how a contextual factor, such as salary receipt, can engender promotion motivations and influence real consumer purchases.

Himanshu Mishra is David Eccles Emerging Scholar and Assistant Professor of Marketing in the David Eccles School of Business at the University of Utah. His research is focuses on understanding the affective and cognitive processes in decision making, behavioral decision theory, consumption experiences and their outcomes, and the influence of sales promotion strategies. Himanshu’s articles have appeared in Journal of Consumer Research, Journal of Marketing Research, Marketing Science, and Psychological Science.

Arul Mishra is Assistant Professor of Marketing and David Eccles Emerging Scholar in the Eccles School of Business at the University of Utah. Her research interests include consumer decision-making processes, specifically as they are related to contagion theory, consumption and justification influences, processing fluency, and nonconscious influences. She has published in Journal of Consumer Research, Journal of Marketing Research, Marketing Science, and Psychological Science.

Dhananjay Nayakankuppam is Associate Professor of Marketing and Henry B. Tippie Research Fellow in the Tippie College of Business at the University of Iowa. He received his MS in Psychology and PhD in Marketing from the University of Michigan. He has served on the editorial board of Journal of Consumer Research. His research interests include using social cognition theories to study evaluative processes, judgment, and decision making, and his work has appeared in Journal of Consumer Research, Journal of Consumer Psychology, Marketing Science, and Psychological Science.

Journal of Marketing, Volume 74, Number 5, September 2010
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Author Bio:

Himanshu Mishra, Arul Mishra, and Dhananjay Nayakankuppam
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