ABSTRACT ***
Authenticity is a concept that has been revised over the years and has become one of the cornerstones of contemporary marketing. Research was conducted to explore the concept of authenticity and its effects on willingness to pay (WTP). In order to test these effects, two attributes of authenticity – or authenticity cues- were chosen; rootedness and craftsmanship. For this research, a design lamp was
presented at an online platform named Alleeup in three different treatments. After seeing a treatment, respondents were asked to fill in their maximum
willingness to pay and had to answer questions to rate their perceived authenticity and perceived quality, another close related concept. Results show
no significant difference in WTP for rootedness, however in contrast to the expectations, a significant negative effect on WTP was found for craftsmanship.
Perceived quality was tested as a mediating factor, however no proof was found to support this effect.
***
Authenticity is a concept that has been revised over the years and has become one of the cornerstones of contemporary marketing. Research was conducted to explore the concept of authenticity and its effects on willingness to pay (WTP).
The influence of authenticity on
willingness to pay
How consumers react to authenticity cuesQuirine Croese, 5982383
August 31, 2015
Supervisor: Bram Kuijken
Second supervisor: Nachoem Wijnberg
Amsterdam Business School
Faculty of Economics and Business
Statement of Originality
This document is written by Student Quirine Croese, who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
A word of thanks
As I’m finalizing the last words of my thesis, I would like to start with a word of thanks to the people who have supported and guided me in writing this thesis. First of all, I would like to thank Bram Kuijken for his guidance during the proces of writing this thesis. He presented me the opportunity to become part of his cool online platform Alleeup, and I have learned a great deal along this process. Secondly I would like to thank Tjalle & Jasper, the kind and talented designers who have given me the possibility to use their lamp; the Spot-Nik as the product for the platform. Joris Ebbers and Nachoem Wijnberg, for managing the great EMCI track, which I have truly enjoyed throughout this academic year. And last but
definitely not least, my friends and family, for always listening patiently to my concerns and their ability to always put me back on track, whenever I needed their support the most.
I hope you enjoy reading my thesis, as I have (mostly) enjoyed writing it.
Table of Contents
A word of thanks ... 2 1. Introduction ... 4 2. Literature review ... 8 2.1 Authenticity ... 8 2.1.1 Types of authenticity ... 8 2.1.2 Attributes of authenticity ... 11 2.2 Willingness to pay ... 15 2.3 Perceived quality ... 16 2.4 Design ... 17 3. Methodology ... 19 3.1 Research design ... 19 3.1.1 Experiment ... 19 3.2 Data Collection ... 20 3.2.1 Alleeup ... 20 3.2.2 Treatments ... 22 3.2.3 Measures ... 23 4. Results ... 23 4.1 Descriptive statistics ... 24
4.2 Treatments and willingness to pay ... 25
4.2.1 Normality, kurtosis and skewness ... 26
4.3 Hypotheses ... 27 4.3.1 Manipulation check ... 27 4.3.2 Hypothesis 1a and 1b ... 28 4.3.3 Hypothesis 2a and 2b ... 29 4.3.4 Hypothesis 3a and 3b ... 30 5. General discussion ... 31 6. Managerial implications ... 36
7. Limitations and future research ... 36
8. Conclusion ... 38
9. References ... 40
1. Introduction
Authenticity as a concept has been revised over the years. Initially, little or no attention in scientific literature for marketing strategies was devoted to this notion. Only Roberts (1994), Gupta (1995) and McIntstosh and Prentice (1999) consider the concept, but do not explain the overall effects of authenticity on consumer behavior. However, in the early twenty first century Grayson and Martinec (2004), Beverland, Lindgreen and Vink (2008) and Blackshaw (2008) describe the search of the consumers for authenticity of importance to contemporary marketing. Brown et al. (2003) even acknowledge authenticity as being one of the
cornerstones of marketing. Furthermore, Forbes, a leading American business magazine ranks authenticity first in their top five trends that marketing teams should incorporate in their strategies for 2015 (www.forbes.com). The urge of feeling more authentic has become a trend amongst many people in our commercialized world (Blackshaw, 2008). In summary, the concept of authenticity has been reassessed within both the scientific and the commercial sector.
The strive for uniqueness is familiar not only for people, but also for brands and companies, since authenticity is an important driver of a brand’s credibility (Pacey, 2009). Being able to stand out from the crowd is a powerful card that can create a competitive advantage. To be truly perceived as authentic, a company or brand must be authentic. With the rise of the Internet, consumers have been able to inform themselves with practically every aspect of almost every product; Lewis and Bridger (2001) refer to these consumers as the ‘new consumer’; a more informed and critical consumer. They point out that these consumers tend to reject mass-marketed commodities in favor of brands and services that offer authenticity. Due to the emergence of the new consumer, companies can no longer solely provide information that they want consumers to hear, but need to be more transparent in their marketing to ensure brand loyalty (Eccles et al., 2001). Brands and products try to
manifest themselves in consumers’ lives in a way that they play a key role in their identities
(Grayson & Martinec, 2004).
Baker (2004) elaborates on the concept of the new consumer by pointing out that the ‘New Consumer Marketing’ compass uses value as a reference. She emphasizes the
importance of value creation in marketing rather than focusing on the traditional four P’s (Price, Place, Product, Promotion) of marketing. Gilmore and Pine (2007) conducted research about authenticity and consumer behavior and found that “In a world increasingly filled with deliberately and sensationally staged experiences…consumers choose to buy or not to buy on how real they perceive an offering to be” (p. 29). In conjunction to the research of Baker (2004) and Lewis and Bridger (2001), Gilmore and Pine (2007) find that the new consumer no longer accepts marketing advertisements without transparency.
Baker (2004) further explains that ‘New Consumer Marketing’ involves three key processes: value definition, value creation and value delivery. With this she advocates a new focus for marketing, concerned with the ‘demand side of the business, taking the consumers as its starting point, not its final destination’ (p. 51). Therefore, marketing should be focused on ‘consumer-benefits’ – what consumers nowadays find important – which authenticity has grown to be, as Blackshaw (2008) pointed out.
Beverland and Farrelly (2010) identify three identity benefits emanating from authenticity cues, namely control, connection and virtue. Control refers to an individual’s desire of having control over their own life. Individuals desire to have personal sovereignty of their choices of consumption. Secondly there is connection, which refers to the importance of individuals to feel connected and ‘fit in’. The last benefit is virtue, which refers to feeling virtuous by staying true to one’s morals. People can experience these identity benefits by
their products shifted from the economic purpose of fulfilling a consumer need to a more socio-cultural role (Lewis & Bridger, 2001).
‘Willingness to pay is a term used in economics, which can be defined as the maximumamount a person would be prepared to pay, sacrifice or exchange in order to receive goods orservices or to avoid something that is undesired’ (Marianil &
Pêgo-Fernandesll, 2014, p. 131). It is a marketer’s goal to increase consumers’ willingness to pay. Marketing academics describe two types of factors to design marketing strategies efficiently: intrinsic cues and extrinsic cues. Intrinsic marketing cues refer to attributes that concern the physical characteristics of a product itself and cannot be changed without changing the actual physical product (Bhuian, 1998; in Vantamay 2007). Extrinsic marketing cues on the other hand, can be manipulated as they are external to the product itself. Both cues can have an influence on the consumer’s perceived quality of a product, but only extrinsic cues have shared characteristics to authenticity, namely country of origin.
Design, in particular design furniture, is a segment of the creative industries and will be the subject of this study. Eisenman (2013, p. 332) describes design as ‘an efficient and effective use of technology and materials to create a reliable product’. Ravasi and Stigliani (2012) state that design can be perceived in various ways: as an outcome, as a process, as the purpose of that process, and as the ability (or capability) to reach that purpose. They propose a pragmatic definition of design as ‘what it is’ and ‘what it does’.
Previous research about the relationship between authenticity and perceived quality has been related to the food industry (Tesfaye, Morales, Garcia-Parrilla & Troncoso, 2002; MacKenzie & Aylott, 2004; Beverland 2005). For example, Beverland (2005) states that images of authenticity also create an image of quality in the wine industry. His main finding
was that appointing the production processes to consumers, leads to enhanced perceived product quality.
Although scientific research and popular media are giving more attention to the concept of authenticity than ever before, more research in this area should be conducted to understand the effects of authenticity cues on willingness to pay. No previous research has been conducted in which authenticity cues are compared to find their effects on willingness to pay in design. Therefore, it is necessary to further explore what makes an object authentic and to investigate how authenticity affects one’s willingness to pay and whether various authenticity cues make a difference.
For contemporary marketing it is interesting to further explore how all these concepts are related, since marketing managers can use this knowledge in the future to create
successful marketing campaigns. This study attempts to bridge the concepts of authenticity and consumers’ willingness to pay. The theoretical contribution of this research is that it deepens the understanding of the concept of authenticity and most importantly will provide new insights on the effects of authenticity and their different attributes for design products in a completely different industry than previously conducted research.
Moreover, this research will supplement existing research with additional insights into the different effects of how authentically cued information influences willingness to pay in the design industry and how perceived quality affects this relationship.
This leads to the following research question:
What is the influence of authenticity on willingness to pay and how does perceived quality
In order to find the influence of authenticity and perceived quality on willingness to pay, a quantitative research will be conducted using data gathered with an online auction model. The online auction tool used for this particular research is named Alleeup, an adequate way to measure consumer willingness to pay.
The structure of this thesis is as follows: the next section deals with all the relevant literature and serves as a basis for this research. The third section will cover the methodology and research design used to answer the research question. The fourth section will discuss the results and analyses of this research. The fifth section will elaborate on these findings and will discuss why the results of this research were found. After this the managerial
implications, the limitations and suggestions for future research will be discussed. And last, the eighth section will cover some final concluding remarks.
2. Literature review
The aim of this study is to reveal how different authenticity cues can have an influence on consumers’ willingness to pay and how this effect is mediated by perceived quality. This section will first describe all related concepts in the following order: authenticity (2.1), perceived quality (2.2), willingness to pay (2.3) and last but not least design (2.4).
2.1 Authenticity
2.1.1 Types of authenticity
Previous literature seems to agree on the importance of authenticity. However, there is not one accepted definition yet. Lewis and Bridger (2001) define authenticity as true to oneself, made or done in the traditional or original way, or being based on facts; accurate or reliable with the important added dimension that brand or product authenticity is subjective.
involves the avowal of commitments to traditions, passion for craft and production excellence, and the public disavowal of the role of modern industrial attributes and commercial motivation” (Beverland, 2005 p. 1025).
Macneil and Mak (2007) identified three main constructions of authenticity. First, authenticity as true to oneself, second, authenticity as original and third, authenticity as trustworthy statement of fact. They emphasize the complexity of authenticity because it is based on the intent of the artist, the purpose of the object and the circumstances of its history. The first concept of Macneil and Mak’s construction of authenticity is ‘authenticity as true to oneself’. This is a human condition and thus has been the focus of many philosophers who associate authenticity with being autonomous, and not imitating others. Authenticity is – in this sense – a manner of being; how one ought to be. The second construction, authenticity as original, has been the main focus area of art connoisseurs and textual critics. In this category, the humanistic point is no longer relevant, but it is all about the authenticity and originality of an object. Lastly, the third category – authentic as trustworthy statement of fact – is a subject of the common law of evidence. It revolves around the truth as a probability. Macneil and Mak (2007) also emphasize the matter that authenticity is indeed subjective and a social construction.
Grayson and Martinec (2004) explore the concept of authenticity even further and define two forms: indexical and iconic authenticity, based on Carles Peirce’s semiotic framework (1998). Indexical authenticity defines authenticity in the sense of a product or object being ‘the original’ or ‘the real thing’ as stated as the first description in the Oxford English dictionary ” (Grayson & Martinec, 2004). For consumers to judge this form of authenticity, they need so called ‘indexes’ (Peirce, 1998; in Grayson & Martinec, 2004). An index is nothing more than a cue for an observer to determine whether or not an object is
indeed ‘the original’. Even when two objects appear to be exactly the same, the authentic object is the one that is “the real thing”. An example of this could be the imitated physique of a Victorian chair of the real Victorian chair (Grayson & Martinec, 2004 p. 298). To view something as an index, the perceiver must believe that it actually has the factual and spatio-temporal link that is claimed. These links can either be physical or non-physical. An example of this could be a high-end design lamp versus a ‘cheap’ copy of that specific lamp sold in large quantities in low-end shops. The design lamp being sold in a design shop with a text about the designer, is an index of quality and originality, but also the high-end shop itself, which only sells exclusive design furniture, is an index. Iconic authenticity however, is quite the opposite (Grayson & Martinec, 2004). For an object to be iconic authentic, it does not have to be ‘the original’. Moreover, it actually can be a reproduction of the original object or even just a resemblance of the original object. These authentic reproductions do not have indexes as Peirce coined them (1989), but icons, to judge the authenticity of an object. An icon is “something that is perceived to be similar to something else” (Grayson & Martinec, 2004, p. 298). In the case of the designer lamps, the replica would be iconic authentic.
Beverland, Lindgreen and Vink (2008) identify three forms of authenticity: pure (literal) authenticity, approximate authenticity and moral authenticity. They base their research on Grayson & Martinec’s (2004) study by acknowledging that all three forms are driven by either iconic or indexical cues. The first category of pure (literal) authenticity resembles the indexical authenticity by using cues (indexes) that communicate the absolute originality of a product; it is completely unchanged. The cues “provide consumer within situations guarantee of the genuine article” (Beverland et al., 2008, p. 8). The second category, approximate authenticity, resembles the iconic authenticity by Grayson and Martinec (2004). This category has more focus on symbolic or abstract impressions of tradition rather than being the absolute original. The cues or icons “provide (the) consumer
with a feeling that this brand will help achieve self-authentication through connecting with place and time” (Beverland et al., 2008, p. 8). Finally, moral authenticity, which mostly refers to iconical authenticity, involves moral judgment. In this form, authenticity cues focus on the importance of producers being engaged, like craftsmanship. The cues, either indexes or icons, “provide consumer with an authenticity feeling that this brand will help achieve self-authentication through connecting with personal moral values” (Beverland et al., 2008, p. 8). Beverland et al. (2008) mention the difficulty consumers often experience in
distinguishing pure authentic products from faked authentic products in carefully crafted ads. They suggest that consumers do not have a distinguished preference for products that are truly authentic, as long as they perceive the product as authentic.
Peterson (2005) discusses that authenticity is indeed a social construct as Lewis and Bridger (2001) previously claimed, and that it is subject to change. He finds that “authenticity is a claim that is made by or for someone, thing, or performance and either accepted or
rejected by relevant others” (Peterson, 2005, p. 1086). Peterson (2005) also describes several examples of faked authenticity, one of which is the story of the boyband N’SYNC. Although, the band was formally created by several professional music managers collaborating with the Walt Disney Company, on their official website N’SYNC said they created the band
themselves and claimed that their success was due to their talent. The story on their website was exactly the story that people wanted to believe in, so the story was perceived as
authentic.
2.1.2 Attributes of authenticity
According to the literature, there are several attributes that contribute to authenticity. In this subparagraph, all attributes of authenticity found in the literature will be discussed in a
schematic table. Thereafter, a substantiation of the relevant attributes for this research will be discussed. The remaining attributes will no longer be discussed.
Table 1: Attributes of authenticity in literature
Beverland (2005) Littrell, Anderson,
and Brown (1993) Boyle (2004) Ma (2009) Liao and Bull (2006) ● Heritage and pedigree ● Stylistic consistency ● Quality commitments ● Relationship to place ● Method of production ● Downplaying commercial considerations ● Cultural and Historic Integrity ● Workmanship, Craftsperson and Materials ● Aesthetics, Function and Use ● Shopping Experience ● Genuineness ● Uniqueness and Originality ● Ethical ● Natural ● Honest ● Simple ● Unspun ● Sustainable ● Beautiful ● Rooted ● Three dimensional ● Human ● Originality ● Quality commitment and credibility ● Heritage and style persistence ● Scarceness ● Sacredness ● Purity. ● Heritage ● Familiarity ● Personal utility ● Originality ● Momentum ● Sincerity ● Declared beliefs
Comparing all these frameworks with their attributes, two attributes are considered for this research: rootedness and craftsmanship. The cue rootedness was chosen for it proves to be a prominent and repeatedly mentioned cue in the studied literature. Only Littrel, Anderson and Brown (1993) describe an indirect form of this cue, however, all remaining literature describe this cue extensively and thoroughly (Boyle, 2004; Beverland, 2005; Bull, 2006 and Liao & Ma, 2009).
Furthermore, previous research found a positive relation between terroir and
willingness to pay in the wine industry (Beverland, 2005; Skuras & Vakrou, 2002). As such, rootedness is expected to have a positive effect on perceived value of product and will serve as one of the cues used in this research.
The cue craftsmanship enjoys the same prominent position in existing literature. Although its description in the literature is mostly indirectly linked to craftsmanship, it still emerges as a prominent feature of authenticity. Beverland (2005), Boyle (2004) and Bull (2006) indirectly discuss craftsmanship by mentioning the importance of production and humanity for authenticity. Litrell, Anderson and Brown (1993) directly mention
craftsmanship in their framework of authenticity. Moreover, Klamer (2012) argues that crafts will play an increasingly important role in future economics, because they meet the
increasing demand for creativity, quality and authenticity, and will increase perceived value of products. As such, craftsmanship is expected to have a positive effect on willingness to pay and will serve as one of the authenticity cues used in this research.
Beverland
Beverland (2005) identified six attributes of authenticity in his research about brand authenticity in luxury wines: heritage and pedigree, stylistic consistency, quality
commitments, relationship to place, method of production, and downplaying commercial considerations. For this research, only heritage and pedigree, relationship to place and method of production are relevant. With heritage and pedigree, Beverland focused on the roots and links with past events. With relationship to place, Beverland referred to terroir and place of origin. Both of these cues are linked to the cue rootedness of this research.
Moreover, regarding authenticity, Beverland stated: “Consumers are more likely to trust the producer and his claims when they can attach a story, a face and a location to the product” (Beverland, 2005, p. 1008). With method of production, Beverland acknowledged the importance of sincere and traditional hand production methods as being an important driver for authenticity and corresponds with the cue craftsmanship of this research (Beverland, 2005).
Littrell, Anderson, and Brown
Littrell, Anderson, and Brown (1993), created a construction with authenticity attributes for crafted souvenirs. They acknowledged six elements of a craft being authentic: cultural and historic integrity, workmanship, craftsperson and materials, aesthetics, function and use, shopping experience and genuineness, and uniqueness and originality. Workmanship, craftsperson and materials, were used to cover handmade production, workmanship, local craft production, artisan and technique, which correspond with the cue craftsmanship of this research. Cultural and historic integrity were used to cover cultural representation, historical representation and that a product is not imported and corresponds with the cue rootedness of this research.
Boyle
Boyle (2004) argues that authenticity is driven by ten authentic elements. These elements are: ethical, natural, honest, simple, unspun, sustainable, beautiful, rooted, three dimensional, and human. A human experience is people-focused and corresponds with the cue craftsmanship of this research. Rooted was used to cover authenticity as some sense of past which is rooted in the destination or community and corresponds with the cue rootedness of this research.
Liao and Ma
Furthermore Liao and Ma (2009) conducted research to conceptualize the consumer need for product authenticity. They considered the following six characteristics of authenticity: originality, quality commitment and credibility, heritage and style persistence, scarceness, sacredness, and purity. Heritage and style persistence was used to cover consistent features of a product, which embodies tradition and heritable spirits and corresponds with the cue rootedness of this research.
Bull
Bull (2006) argues that authenticity is an important business concept today, which consumers highly value. Moreover, he claims that the extent to which brands are perceived as authentic, will subsequently determine the success of this brand in its market. In his study he derived seven drivers that make brands more authentic. These seven drivers are: heritage, familiarity, personal utility, originality, momentum, sincerity, and declared beliefs (Bull, 2006). For this research, two drivers are considered. The first driver is heritage: the extent to which a brand has an engaging story, that corresponds to the cue rootedness of this research. The second driver is sincerity, which means a product or a service has to convey genuine humanity, which corresponds with the cue craftsmanship of this research.
2.2 Willingness to pay
Willingness to pay is a valid measure to see what a product is worth, and to find out whether adding information or marketing techniques are actually increasing value. Therefore,
marketers are constantly looking for ways to increase consumers’ willingness to pay. Because how much one would pay has a self-signaling value, one would not underpay from what one thinks is a fair price to avoid having a bad self-image (Gneezy et al., 2012).
Willingness to pay expresses how much something is worth for a consumer. In research, it is a valuable measure to compare the added value of one’s perception of – in this case –
authenticity. Peter and Olson (2001) state that consumers’ proclaimed behavior is not the same as their actual behavior. Therefore an online auction system (further explained in the methods section) with real biddings is a more trustworthy approach to measure the actual effects of marketing rather than measuring intended behavior (e.g. how much are you willing to pay versus how much would you pay).
According to Beverland (2005), Skuras & Vakrou (2002) and Klamer (2012), rootedness and craftsmanship are positively related with willingness to pay. Moreover, Groves (2001) found that authenticity was positively related to willingness to pay. Therefore, the following hypotheses are formulated:
H1a: The authenticity cue rootedness has a positive effect on willingness to pay H1b: The authenticity cue craftsmanship as a positive influence on willingness to pay
2.3 Perceived quality
Another concept that is related directly to authenticity is quality (Beverland, 2005). According to Aaker (1991), perceived quality is “the customer’s perception of the overall quality or superiority of the product or service with respect to its intended purpose, relative to alternatives.” An important element is that perceived quality differs from the actual quality of a certain product.
Beverland (2005) developed six elements of authenticity, one of these being quality commitments. He found a connotation between the perceived quality and the claim of
authenticity. When a product is perceived as authentic, its perceived quality increases as well. Beverland states that this perceived quality comes together with consumers’ perceived
sincerity and attention to detail, which derives from authenticity. Liao & Ma (2009) considered six characteristics of authenticity, one of these being quality commitment and credibility.
Although more research about this topic has been conducted in the field of the food industry, it is interesting to investigate whether the relationship between perceived quality and authenticity exists in the design industry to create greater insight to the concept of authenticity for marketers.
Beverland (2005) has stated that when a product is perceived as authentic, its perceived quality increases as well. According to Liao and Ma (2009) authenticity is positively related with perceived quality. Therefore, the following hypotheses are formulated:
H2a: The authenticity cue rootedness has a positive effect on perceived quality H2b: The authenticity cue craftsmanship has a positive effect on perceived quality
Groves (2001) found that people were willing to pay more for food that was perceived as authentic and therefore was supposed as being of good quality. Vantamay (2007) states that perceived quality is dependable of tangible and intangible product characteristics, such as brand image, manufacturer’s image or country of origin. Although authenticity itself is not mentioned, Vantamay (2007) states the influence of both extrinsic and intrinsic cues of a product on perceived quality. Moreover, Vantamay found that market perceived quality boosts profit margins. He states that higher perceived quality supports a premium price because it increases perceived value.
Beverland (2005) has stated that when a product is perceived as authentic, its perceived quality increases as well. According to Vantamay (2007) perceived quality increases willingness to pay. Therefore, the following hypotheses are formulated:
H3a: Perceived quality has a mediating effect on the relationship between rootedness and willingness to pay
H3b: Perceived quality has a mediating effect on the relationship between craftsmanship and willingness to pay
2.4 Design
Ravasi and Stigliani (2012) thoroughly explore existing literature on the concept of design. They state that design can be perceived in various ways: as an outcome, as a process, as the
purpose of that process, and as the ability (or capability) to reach that purpose. After
considering the different definitions derived from different streams of research, they propose a pragmatic definition of design as ‘what it is’ and ‘what it does’. Luchs and Swan (2011) similarly suggest that design is a tri-faceted product attribute. They propose the definition of product design as “ the set of properties of an artifact, consisting of the discrete properties of the form (i.e. the aesthetics of the tangible good and/or service) and the function (i.e. its capabilities) together with the holistic properties of the integrated form and function” (Luchs & Swan, 2011, p. 338).
Design furniture exists in many variations. There are designers hired by companies for mass-market products, but you also have craftsmen who create a one of a kind product. Designers are, as in any other industry, constantly looking for ways to market their products desirable for consumers. There is a lot of competition in design furniture with many
newcomers entering the business every day. It is therefore necessary to create a unique concept that helps your design stand out. This makes design an interesting research topic, because “the communication of information with design, in particular symbolic and aesthetic information, is of strategic importance because it triggers affect and previous research has shown that positive affect leads to higher sales” (e.g., Bloch, 1995; Gemser & Leenders, 2001; Hertenstein, Platt, & Veryzer, 2005; in Eisenman, 2011, p. 332). Symbolic information concerns the meanings and associations users attribute to a product beyond its basic utility. And aesthetic information refers to the sensory reactions which products can trigger, such as affect (Eisenman, 2011). Authenticity cues can be a form of symbolic information because it is a description or association of a product beyond its utility.
3. Methodology
Previous chapters discussed the existing literature about authenticity and the conceptual framework that served as the basis of this research. This section discusses the research design and methods that are used to test the hypotheses of this research. Firstly, the research design of this thesis will be described, followed by a description of the data collection and the sample. Lastly, the variables used in the survey will be discussed.
3.1 Research design
The aim of this research is to investigate how authenticity can influence consumers’
willingness to pay. The empirical setting of this research consists of the auction of a designed lamp called ‘The Spot-Nik’. The choice for a design product – such as the Spot-Nik – as the object being offered, is justified by the fact that design furniture can be perceived as authentic or not. Moreover, the Spot-Nik is an excellent product for this research because it covers both the cues rootedness and craftsmanship. On the website of the Spot-Nik the designers, Tjalle and Jasper express their craftsmanship by stating that they “don't just design, we also produce everything ourselves. This way we keep an eye on our quality demands” and “Tjalle is an educated industrial designer and Jasper has been working as a wood craftsman for some years now”. The authenticity cue rootedness is also covered by the designers by stating that they grew up in Brabant Province together and that their shop and business are located in The Netherlands, close to Amsterdam. Using three different advertisements which are
manipulated, a simulation of the decision making process that usually takes place in-store, is being created.
3.1.1 Experiment
effect, an experiment is conducted. When using an experiment as the basis of research, hypotheses can be tested easily by manipulating the independent variable. An experimental auction is considered a highly valid market research method because it can offer differently manipulated treatments in order to measure whether these manipulations affect people's willingness to pay (Chakravart et al. 2002; in Lusk & Shogren, 2007).
For this research, three different advertisements for the same product, the Spot-Nik, were offered online. By manipulating the independent variable, which is in this case
authentically cued information about either the maker or the product, the effects on the dependent variables may differ in each case. The differences in the dependent variables can then be attributed to the different manipulations of the independent variables (Saunders et al., 2007).
3.2 Data Collection
The objective of this experiment is to show respondents differently manipulated
advertisements of the Spot-Nik. Note that every respondent can only enter once and will only see one of the three advertisements. Consequently, the effects of the manipulations can be tested in terms of respondents’ differences in willingness to pay and their perception of quality. Alleeup offers the perfect way to conduct experimental auctions that allows for reliable and controlled measurements of people’s willingness to pay. As such, this online platform is chosen for the experimental part of this research.
3.2.1 Alleeup
Alleeup is an online platform for academic research specifically focused on product offerings of start-ups or independent designers. The platform is used in collaboration with one of the founders (Kuijken). Alleeup incentivizes respondents to bid their maximum willingness to pay by offering the product online for a minimum fixed price set by the designers of the
product. In this way, bidders will never pay more than they are willing to pay and they will always get the best deal. By letting the bidders know in advance that they will always get a ‘discount’, they will thus never overpay. As such, the price for which the participants would be willing to attain the product, is in effect their maximum willingness to pay.
Alleeup is a newly developed website with no subscribers so far. In order to get respondents, each researcher is obliged to recruit at least 100 respondents to subscribe to the online platform. Each researcher receives a personal link to recruit participants. The personal link ensures that the product of each researcher is in the top banner and will therefore
immediately incentivize their own participants to bid on their product. When opening the website, numerous products show up with a button ‘Show love’ in the middle. Although the start page is equal to all participants, after the ‘Show love’ button, every respondent gets to see one form of the differently manipulated advertisements. The respondents are then asked to fill in the amount they are willing to pay for that particular product. It is clearly
communicated to every participant that the biddings are binding and if their bid is higher than the minimum fixed price set by the product designers. If a respondent is completely
uninterested in the product, they are also able to bid zero euros, thus matching their maximum willingness to pay. After bidding, the respondents move on to a set of
predetermined questions set up by the researcher. Some of the questions are regarding the demographics of the participants (age, gender, education) to help build up information about the subscribers for the database and future product offerings. Other questions are related to the specific research linked to the product. These questions can be used to find certain relationships and correlations between variables. One weakness of the way of recruiting the participants occurs because of convenience sampling. Convenience sampling weakens the external validity of an experiment (Saunders et al., 2007).
3.2.2 Treatments
For this particular research three different advertisements for the same product, the Spot-Nik, were developed. In this way, the different treatments can be used to detect differences among respondents’ biddings and perceptions of the advertisements. In this research, all three advertisements are the same, apart from the manipulation. The manipulation is authentically cued information allocated to either the product or the producer, or no information is added at all. The cue rootedness is allocated to the product because all studied literature that covers this cue is associated with a product that is being rated for authenticity and not related to a human being (Boyle, 2004; Beverland, 2005; Bull, 2006 and Liao & Ma, 2009). For this reason, this research will allocate the cue rootedness to the product. The cue craftsmanship is allocated to the producer because the word itself explains that craftsmanship is human labor, which cannot be allocated to the product. Moreover, the previously studied literature that serves as the basis for the choice of this cue emphasizes the importance of humanity (Littrel, Anderson & Brown, 1993; Boyle, 2004; Beverland, 2005; Bull, 2006).
Treatment one: The product is presented (a photo of the Spot-Nik) without any information on the advertisement itself. Although some practical information concerning materials used, such as weight and measurements, can be found on the side of the webpage. Furthermore, the bidder has to ‘click’ on a folder for the information to become visible. This
treatment serves as the control group (see appendix).
Treatment two: This treatment has the same product presentation of the Spot-Nik (e.g. a photo of the lamp), but includes an authentically cued text about the product; Dutch Design, referring to the authenticity cue: rootedness. The text is placed in the right corner of the picture, so it is obvious for the bidder to see. Here again, some practical information concerning materials used, weight and measurements, can be found on the side of the webpage (see appendix).
Treatment three: The third advertisement has the same product presentation as treatment one and two (e.g. a photo of the lamp), but includes an authentically cued text; designed by two experienced designers, referring to the authenticity cue: craftsmanship. The placing of the text is in the right corner of the picture, so it is obvious for the bidder to see. Here again, some practical information concerning materials used, weight and measurements, can be found on the side of the webpage (see appendix).
Table 2: three different treatments
1 2 3 Control X Rootedness X Craftsmanship X 3.2.3 Measures
The respondents are asked to make a bid for the Spot-Nik. This bid is simultaneous to the respondent’s willingness to pay. After the respondents made their bid, they were immediately sent to a page where they were asked several questions. The questions concerned the
demographics of the participants (age, gender, education) and helped to generate information about the subscribers for the database and as control variables. Next, five questions on a five-point Likert scale were asked to measure authenticity towards the Spot-Nik, based upon an existing authenticity scale (Bruhn, Schoenmüller et al., 2012). Furthermore one question was asked to measure the respondent’s perceived quality. (See appendix)
4. Results
This section will discuss the results of this research. First, randomization of the sample is addressed with descriptive statistics. Second, the data is tested for correlations and reliability. Finally, the hypotheses will be tested to conclude if they can be accepted or rejected.
4.1 Descriptive statistics
In this experiment, 153 of the recruited respondents placed a bid on the Spot-Nik. When looking at the data, five respondents concerning age stood out. Three were missing a birth year and two respondents indicated a birth year of 2015, which is invalid. Taking a closer look at these respondents, they either had a bid of zero or excluded data concerning the follow up questions. The decision was made to exclude these cases from the dataset. From the remaining dataset of 148 respondents, 67 (45,3 %) were male and 81 (54,7 %) were female with an average age of 30. Comparing these numbers to the population of the Netherlands where 49,5% is male and 50,5 % is female, the gender distribution is fairly coherent (see table 3.1). However, when comparing these figures to the average age of the Dutch population, we saw a larger deviation. This deviation may be due to the fact that most respondents are recruited by students and are likely to be of the same age group (see table 3.1).
Table 3.1: Average age and gender distribution Dutch population and sample
Gender: Male Female
Average age Dutch population 39.9 41.7 Average age sample (N=148) 30.5 29.3 Gender distribution Dutch population (%) 49,5 % 50,5 % Gender distribution sample (%) 45,3 % 54,7 %
Source: CBS, 2015
Table 3.2: Average education level Dutch population and sample
Highest education level: None Secondary
school MBO HBO WO Dutch population (%) 0,6 % 23 % 40,1 % 19,3 % 9,2 % Sample (N=148) (%) 0 % 9,5 % 4.7 % 19.6 % 61,5 %
4.2 Treatments and willingness to pay
After considering the demographics of the sample, we need to review the descriptive statistics of the data. The 148 respondents in this research were randomly assigned to one of the three treatments which resulted in the following distribution over the three treatments: Treatment 1: N= 34, Treatment 2: N= 62 and treatment 3: N= 52. For this research, a minimum of 30 participants was necessary per treatment in order for the data to be applicable for statistical research (Saunders, 2011). So respectively 34, 62 and 52 participants may be considered sufficient for completing this research. The following table presents the mean bids per treatment.
Table 4.1: Descriptive statistics willingness to pay treatment 1, 2 and 3
Treatment N Mean Std Dev SE Mean Minimum Maximum 1 34 20,78 18,19 3,12 0 75 2 62 19,70 16,91 2,15 0 60 3 52 18,49 26,49 3,67 0 120 Total 148 19,52 20,91 1,72 0 120
When looking at these numbers, several things came to the attention. First, we saw a maximum mean difference of 2,29 which is quite small in respect to the mean price. A second thing to be noticed were the high standard deviations regarding to the means. This implies a wide spread of the data which is also noticeable when looking at the minimum and maximum bids in comparison to the mean for every treatment. The zero bids could be explained by the fact that the respondents did not know in advance what kind of product was offered at Alleeup. Because they were recruited and not self-registered, there is a bigger chance the respondent was not interested in the product in the first place, hence the zero bid. These zero bidders have a large impact on the data. However, for this research they were not
excluded from the data for further analyses for several reasons. First, because these zero bids could also be a consequence of the treatment and thus provide us valuable information. Second, when excluding the zero bids, the amount of data is not sufficient for every treatment to make assumptions after analyses (N < 30) (Saunders, 2011). And third, in resembling research, zero biddings were also not excluded, thus for this research, they shall not be excluded.
4.2.1 Normality, kurtosis and skewness
Further exploration of the data is needed to check whether the data is normally distributed. The histogram for willingness to pay did not show a normal distribution. The histogram showed a concave up shape instead a decreasing shape with the highest amount of bidders at the zero bid value. Analyzing the data even further, we found that the data was positively skewed (skewness value = 1.920, SE = 0.196) and leptokurtic (kurtosis value = 5.673, SE = 0.390) which confirms the values and the shape of the histogram.
An alternative way of looking at the data is to transform the values for willingness to pay, to their natural algorithm (Ln) in order to get a normal distribution. Coefficients on this natural-log scale can be interpreted as approximate proportional differences. After this transformation, we saw that the histogram had a more normally distributed shape. However, the natural algorithm of zero remained zero, so a high peak in the histogram continued to influence the data. Again, the data was checked for skewness and kurtosis. We saw that after the transformation, the data was negatively skewed (skewness value = -0.720, SE = 0.201) and remained leptokurtic (kurtosis value = 2.165, SE = 0.399). Even though the data after the transformation was still not normally distributed, there was a big improvement, so further analyses were done with the natural logarithm.
Table 4.2: Descriptive statistics Ln willingness to pay treatment 1, 2 and 3
Treatment N Mean Std Dev SE Mean Minimum Maximum
1 34 2,65 1,10 0,19 0 4,33
2 62 2,47 1,28 0,16 0 4,11
3 52 2,06 1,50 0,21 0 4,80
Total 148 2,37 1,33 0,11 0 4,80
Further analyzing the data requires the Levene’s test for homogeneity of variances. For this test, a p-value > 0.05 is desired in order to assume equal variances. However, for this sample the p-value is 0.014 (F(4.416), p = 0.14) which means equal variances for variables cannot be assumed.
Table 4.3 : Descriptive Statistics
Variables Mean SD (1) (2) (3) (4) (1) LN WTP 2.37 1.34 - (2) Quality scale 3.45 0.74 .118 - (3) Authenticity perception 3.10 0.43 .199* .348** - (4) Rootedness 0.65 0.48 -.070 .129 -.354** - (5) Craftsmanship 0.60 0.49 -.211 .231* -.166 -
** Correlation is significant at the .01 level (2-tailed). * Correlation is significant at the .05 level (2-tailed).
4.3 Hypotheses
4.3.1 Manipulation check
To test whether authenticity cues have a positive influence on people’s willingness to pay (H1a, H1b) an increase in perceived authenticity first has to be measured (manipulation check). With an ‘independent samples T-test’ the authenticity cues rootedness and
difference in the mean. The variance for rootedness was not significantly different from the base treatment (SD = 0.38, SD = 0.44), F = 0.294; p = 0.589, therefore the results of ‘equal variances assumed’ were used. The results showed significant differences in authenticity perception for people who were shown the advertisement with the rootedness cue (M = 3.23 ; SD = 0.38) compared to people who were shown the blank advertisement without any cue (base) (M = 2.92 ; SD = 0.44), t (93) = -3.653 ; p = 0.000. In line with our expectations, the mean for perceived authenticity of treatment two was higher than for treatment one, and therefore hypothesis 1a is accepted.
Again for the authenticity cue craftsmanship and an ‘independent samples T-test’ was run to compare its mean on perceived quality with the base treatment. The variance for craftsmanship was not significantly different from the base treatment (SD = 0.44, SD = 0.44), F = 0.153; p = 0.697, therefore the results of ‘equal variances assumed’ were used. The results did not show significant differences in authenticity perception for people who were shown the advertisement with the craftsmanship cue (M = 3.07 ; SD = 0.44) compared to people who were shown the blank advertisement without any cue (base) (M = 2.92 ; SD = 0.44), t (83) = -1.534 ; p = 0.129. Contrary to our expectations, no significant results were found regarding the manipulation check for the cue craftsmanship.
4.3.2 Hypothesis 1a and 1b
To test whether the authenticity cues rootedness and craftsmanship have a positive effect on the willingness to pay, a ‘one-way ANOVA’ was conducted. With this test, treatment 2 (rootedness) and treatment 3 (craftsmanship) were compared on their Ln mean bids with treatment 1 (base).
There was no significant effect of authenticity cues on willingness to pay at the p<.05 level for the three conditions [F(2, 145) = 2.409, p = 0.093]. Post hoc comparisons using the
LSD test did not show significant differences in Ln mean bids for people who were shown the advertisement with the rootedness cue (M = 2.47 ; SD = 1.28) and people who were shown the blank advertisement without any cue (base) (M = 2.65 ; SD = 1.10) ; p = 0.532. In contrast to our expectation, the Ln mean bid for treatment one was slightly higher than the Ln mean bid for treatment two. However, there were no significant results to be found regarding hypothesis 1a, and as such, hypothesis 1a is not supported.
Post hoc comparisons using the LSD test showed significant differences in Ln mean bids for people who were shown the advertisement with the craftsmanship cue (M = 2.06 ; SD = 1.51) and people who were shown the blank advertisement without any cue (base) (M = 2.65 ; SD = 1.10) ; p = 0.044. Opposite from our expectations, the Ln mean bid for treatment three was lower than the Ln mean bid for treatment one, as such hypothesis 1b is not
supported.
4.3.3 Hypothesis 2a and 2b
To test whether the authenticity cues rootedness and craftsmanship have a positive effect on the perceived quality, a ‘one-way ANOVA’ was conducted. With this test, treatment 2 (rootedness) and treatment 3 (craftsmanship) were compared on their quality perception with treatment 1 (base). There was no significant effect of authenticity cues on willingness to pay at the p<.05 level for the three conditions [F(2, 143) = 2.658, p = 0.074]. Post hoc
comparisons using the LSD test showed no significant differences in quality perception for people who were presented the advertisement with the rootedness cue (M = 3.43 ; SD = 0.67) and people who were shown the blank advertisement without any cue (base) (M = 3.24 ; SD = 0.78; p = 0.227. The results regarding the effect of rootedness on perceived quality were not significant, and as such, hypothesis 2a is not accepted.
Post hoc comparisons using the LSD test showed significant differences in quality perception for people who were presented the advertisement with the craftsmanship cue (M = 3.61 ; SD = 0.78) in comparison to people who were shown the blank advertisement without any cue (base) (M = 3.24 ; SD = 0.78) ; p = 0.023. The results regarding the effect of
craftsmanship on quality perception were significant, as such hypothesis 2b is accepted.
4.3.4 Hypothesis 3a and 3b
Hypothesis 3a expects that perceived quality has a mediating effect on the relationship
between rootedness and willingness to pay. However, as previous results have shown, there is no significant effect of the cue rootedness on willingness to pay (H2a). Therefore, there can be no mediating effect of perceived quality on a non-existing relationship, as such hypothesis 3a is not accepted.
For hypothesis 3b, which expects that perceived quality has a mediating effect on the relationship between craftsmanship and willingness to pay, the PROCESS macro for SPSS from Hayes was used to regress this model. Based on the Baron & Kenny approach (1986) the mediation process is split up into four steps. In step one of the mediation model, the effect of craftsmanship on willingness to pay, ignoring the mediator, was only just insignificant, b = -0.58, t(83) = -1.91, p = 0.060. Step 2 showed that the effect of mediator perceived quality on willingness to pay was significant, b = 0.37, t(83) = 2.16, p = 0.033. Step 3 of the mediation process showed that the mediator, controlling for craftsmanship, was not significant, b = 0.35, t(82) = 1.86, p = 0.066. Step four of the analysis revealed that, controlling for the mediator perceived quality, craftsmanship now became a significant predictor of willingness to pay, b = -0.71, t(82) = -2.31, p = 0.023. However a Sobel test was conducted to test the indirect effect and found no proof of mediation z =1.33, p = 0.183. This means that without the mediator in the model no significant effect of craftsmanship on willingness to pay was found,
however when controlling for the mediator, craftsmanship, when compared to the base treatment, appeared only slightly significant. For the report of the results, the unstandardized coefficients are used. Therefore after conducting the Sobel test, hypothesis 3b is not accepted.
Step 1: Step 2, 3 and 4: * = p < 0.05
5. General discussion
The first important point is that there doesn’t seem to be consistency throughout the results of the analysis. Based on the results of previous research about authenticity our expectation was that rootedness is an attribute of authenticity and will increase the authenticity perception of consumers (Boyle, 2004; Beverland, 2005; Bull, 2006; Liao & Ma, 2009). After testing the manipulation check to see if there would be an increase in perceived authenticity, a
significant increase in the means was found. This means that the authenticity cue rootedness positively affects one’s perceived authenticity.
However, when we look at the cue craftsmanship in comparison to the base to see if there would be an increase in perceived authenticity, no significant results were found. Although, previous research suggests a finding in line with our expectations this research could not support this effect (Littrell, Anderson, and Brown, 1993; Klamer, 2012). There could be several reasons for the lacking support of this effect. One of these could be that while the different advertisements for this research were designed simple yet as clear as possible, the differences per treatment may have not been sufficiently clear. The difference per treatment was a small descriptive text in the right corner that covered the cue rootedness or
craftsmanship. Another reason for the lack of support could be that some respondents did not look thoroughly at the advertisement before filling in a bid and answering the questions.
Regarding hypothesis 1a, where a positive effect of the authenticity cue rootedness on willingness to pay was expected, no major differences were found. The cue rootedness used for treatment two showed no significant differences with the base treatment where no authenticity cue was presented and does not show a positive effect on willingness to pay. As such, there is no evidence found that could support hypothesis 1a contrary to previous research where a positive relation between terroir and willingness to pay was found in the wine industry (Beverland, 2005; Skuras & Vakrou, 2002). As Beverland (2005) claimed: “Consumers are more likely to trust the producer and his claims when they can attach a story, a face and a location to the product”. As such, rootedness is expected to have a positive effect on perceived value of products. There could be several explanations for lacking support for hypothesis 1a. One possible explanation could be that the statement ‘Dutch Design’ does not fully cover the rootedness cue for authenticity, which could lead for loss of effect. Moreover,
the difference between the base treatment and treatment 2 could have not been sufficient enough to make a clear distinction between the two treatments. Another explanation could be that not enough data was collected to find support for a positive influence of the cue
rootedness on willingness to pay. Because 34 respondents participated for the base treatment, we did not have enough margin to exclude zero bids, or enough margin to look at only the top 50% of the biddings. Also, it is possible that the looks of a product influences the willingness to pay for a product. This means that a number of respondents filled in a zero or close to zero bid because they simply did not like the appearance of the Spot-Nik. Another reason why we did not find support for a positive effect of the cue rootedness on willingness to pay was that biddings were real and some participants in this research might have been scared that they had to pay for a lamp they could not afford (a lot of the respondents were students). This could be a reason that overshadows the influence on willingness to pay rather than the authenticity cue.
Hypothesis 1b, which expected a positive effect of the cue craftsmanship on
willingness to pay, found the opposite of our expected effect. Previous research, which states that crafts will play an increasingly important role in future economics and is expected to have a positive effect on perceived value of products (Klamer, 2012). However, in this research, the opposite effect was found. In contrast to previous research, a significant difference in the Ln mean bid was found. However the manipulation check on the cue craftsmanship showed no significant evidence, so we cannot assume that the advertisement for treatment three with the statement “designed by two experienced designers” fully covers the authenticity cue craftsmanship. This could explain why this opposite effect was found. However, this contrasting finding could be due to the fact that the respondents do not appreciate or value craftsmanship. A reason for this could be the younger age of the sample
in comparison with the Dutch population, which could lead to a preference for non-crafted products because they could be perceived as less fragile than handcrafted products.
Hypothesis 2a, where a positive effect of the authenticity cue rootedness was expected on perceived quality, was not supported. Although previous literature explains a positive relation between rootedness and perceived quality, this research finds no significant differences in the means for perceived quality were found when comparing to the base treatment (Beverland, 2005). Again, the same explanations as provided for the lack of proof for the manipulation check and hypothesis 1a could be of influence here. An assumption can be made that the treatments do not differ enough to make a clear distinction. Another reason could be that the information that should cover the cue rootedness was not sufficient. It must be acknowledged that adding one sentence in the right corner per treatment does not represent a large change. Also, how much time respondents took to truly look at the advertisement could have had an impact. Also, the product chosen for this research could have had an impact on the data. The Spot-Nik is not an ordinary lamp and it could be that the respondents did not like the design.
Hypothesis 2b, where a positive effect of the authenticity cue craftsmanship was expected on perceived quality, was supported. However, in the manipulation check no significant positive difference was found in perceived authenticity for craftsmanship. We can conclude that the text ‘designed by two experienced designers’ does have a positive effect on perceived quality, but we cannot make the assumption that this text fully covers the cue craftsmanship. This finding is not consistent with the previous results of hypothesis 1b where a negative effect of the authenticity cue craftsmanship on willingness to pay was found. In line with Vantamay (2007), Klamer (2012) one would expect that higher perceived quality would lead to a higher willingness to pay.
Hypothesis 3a, which expected a mediating effect of perceived quality on the relationship between rootedness and willingness to pay could not be tested because no significant proof was found for the initial relationship between rootedness and willingness to pay. One cannot mediate a relationship that does not exist, so we cannot assume that the relationship between rootedness and willingness to pay is mediated by perceived quality.
Finally, no support for hypothesis 3b, which expected a mediating effect of perceived quality on the relationship between craftsmanship and willingness to pay, was found.
Previous research argues that people were willing to pay more for food that was perceived as authentic and therefore was perceived as being of good quality (Groves, 2001). Moreover, Beverland (2005) and Liao and Ma (2009) found that the concepts of authenticity, quality and value are closely related. Also, Vantamay (2007) found that market perceived quality boosts profit margins. He states that higher perceived quality supports a premium price because it increases perceived value. However in this research, no evidence was found that the relationship of craftsmanship and willingness to pay is mediated by perceived quality. Without the mediator in the model no significant effect of craftsmanship on willingness to pay was found. When controlling for the mediator, craftsmanship, when compared to the base treatment, was only slightly significant. However, after conducting a final test (Sobel test), no significant evidence was found and therefore hypotheses 3b is not accepted. Again, it is possible that the product for this research could be of influence for the lack of evidence. In the product description, which could be found on the page with the advertisement, it was stated that the lamp came in a building package meaning that you had to assemble it yourself. This could have possibly changed the view on perceived quality and could have created a bias in our results.
6. Managerial implications
This study has tried to reveal the effects of authenticity on consumers’ willingness to pay. Although there is still growing attention in marketing for authenticity, the concept has yet to be fully explored to gain maximum benefit for companies. Marketing managers constantly face challenges to catch the consumer’s attention. It is therefore important to grow with your consumers and deal with the always changing surroundings, and needs and wants. Especially now that the urge of feeling more authentic has become a trend amongst many people in our commercialized world (Blackshaw, 2008) it is becoming even more important to understand the concept of authenticity. Therefore, if marketers would know the potential benefits of using authenticity cues in advertisements and their effects on willingness to pay, they could develop authentic advertisings to please their customers and in the end maximize profit. If different cues have different effects, marketers could build their campaigns as effective as possible.
7. Limitations and future research
The first limitation of this research that should be addressed is the bias for the sample. Alleeup is a new platform and all respondents were recruited by students. This does not create a sample that resembles the Dutch population, which creates a bias in the results. The average age of the respondents is lower than the Dutch population and they have a higher education level.
Second, the measurement of willingness to pay might have been too unspecific. The respondents were asked to place their maximum bid for the Spot-Nik lamp in an answer box, without notifying them of the actual market price of the Spot-Nik. It is unclear what the participants individually use as their ‘anchor’ price (the price participants use to compare the
product to their willingness to pay in their minds). This causes a large fluctuation in the biddings.
Third, the product used for this research might have caused some bias as well. The data appeared to have a lot of zero bids, which could be due to the fact that the lamp is a product which appeals to a small segment of the Dutch population. This makes it difficult to measure the effects of the authenticity cues on the willingness to pay.
Fourth, the lamp is a relatively expensive product, which requires more purchase involvement and yields higher perceptions of risks considering the biddings were real. Respondents might have had a higher maximum price in their minds, but did not have the money to purchase a lamp. This could have influenced the results of this research so that they do not correspond with the reality.
Lastly, a major pitfall of this research is the design of the treatments. It appears that the information used to cover the authenticity cues rootedness and craftsmanship are not sufficiently different from the base which ultimately leads to a bias in the results. It appears that one sentence in the right corner per treatment was not different enough to make a clear distinction.
Future studies could compare different experiments in which products differ in price and product type, to assess whether there is a difference in importance of authenticity for different product types or not. Furthermore, future research could focus more on the different authenticity attributes to assess which of them have the strongest effect as an authenticity cue. Conducting a research that actually investigates deeper in which way the different attributes are perceived and consequently acted upon by consumers could fill an interesting gap and serve as a basis on which to build further research. Overall, more in depth studies will create
a larger awareness of the effects of authenticity, which in turn can be used as a basis for future marketing.
8. Conclusion
This research was aimed at finding out what the effects of different authenticity cues are on willingness to pay. The research question was:
What is the influence of authenticity on willingness to pay and how does perceived quality
mediate this relationship?
In order to answer this question, research was conducted to further explore the
concept authenticity and its effects on willingness to pay (WTP). In order to test these effects, two attributes of authenticity – or authenticity cues – were chosen; rootedness and
craftsmanship. For this research, a design lamp was presented at an online platform named Alleeup in three different treatments. After seeing a treatment, respondents were asked to fill in their maximum willingness to pay and to answer some questions to rate their perceived authenticity and perceived quality, another close related concept. A total of 153 respondents filled in a bid on the Spot-Nik. Results show no significant difference in WTP for rootedness, however significant difference in WTP was found for craftsmanship. Perceived quality was tested as a mediating factor, however no proof was found to support this effect. These findings lead to the conclusion that authenticity has a positive influence on willingness to pay, however nothing can be concluded about the mediating effect of perceived quality. It is however clear that the concept of this research – authenticity – which lies at the core of contemporary marketing should be further explored so that marketing managers can benefit from its potential.
