It’s the season for giving gifts and purchasing them. But how much does color influence the price we pay for the things we buy? I’m Jim Metzner and this is the Pulse of the Planet.
Bagchi: We find that color influences consumers’ willingness to pay.
And this willingness to pay depends on the selling mechanism that is used, whether it is a negotiation context, whether it’s a fixed price context, such as in a retail setting, or whether it is an auction.
Rajesh Bagchi is an Associate Professor of Marketing at the Pamplin College of Business at Virginia Tech. He says that in an online auction, subtle exposure to a color can influence our decision to buy.
Bagchi: So you can take any product, like, such as a game console, for instance, and all you would need is a header on the top which is red or blue. And what we demonstrate is that when you have a slight red color header, for instance, it actually increases willingness to pay in auction settings. So let us say, for instance, the starting price is $225.00 on a certain game console. A person who’s exposed to red will actually be willing to pay more; so their bid jump will be higher, let’s say, by $60.00. But let’s say somebody’s exposed to blue. They’re bid jump would only be, say, $35.00 higher.
In a negotiation situation, red apparently has different effect.
Bagchi: For instance, eBay also allows you to negotiate. They have a posted bid price, and you can either buy it now or you can offer a counter. So, for the same game console, if it is priced at, say, $350.00 the buy it now price and the seller is asking you to either buy it now or offer a counter, what we find is that when you have red backgrounds, people offer lower counters. With a blue background, they may actually offer a higher counter, or they may just buy it now.
In future programs, we”ll find out why we respond to colors the way we do. I’m Jim Metzner and this is the Pulse of the Planet.