Promotions in haze : how air pollution affects customer’s prosocial intentions

Abstract

 The adverse impacts of pollution on human’s health, education attainment, and productivity have been well documented in a huge and growing studies. However, the research about people’s willingness to pay for defensive products in the context of combing the marketing activities and air pollution together are still limited. This paper, to my best knowledge, is the first empirical work that investigates the effect of air pollution on customer’s WTP for defensive product as well as its impact on customer’s reaction to common marketing activities, such as discount promotion and cause related marketing campaigns. Leverage on a field experiment, this paper explores what types of mobile marketing strategies companies should adopt that can increase customers’ purchase when their needs for the defensive products become easier to be trigged by the outside stimulus (e.g., the condition of the general environment, such as air pollution). To be more specific, the framings of two marketing activities are well-designed and used to explore customer’s response to two types discount information framings (cash term framings vs. percentage term framing) and four types of cause framings of the cause related marketing (directly related environmental cause: protecting air quality vs. indirectly related environmental cause: protecting environment vs. humanitarian causes vs. no cause at all). There are three main findings from the field experiment. First, this paper finds a positive effect of air pollution on consumer demand for air purifiers and such effect becomes weakened if consumer continuously experienced air pollution in the past several days. Second, this paper shows that there are no significant differences between the influence of two promotion framings (cash term vs. percentage term). Besides, this impact presents no significant differences in good or bad air quality days. Thirdly and the most importantly, customers are found to be more likely to respond to the humanitarian cause marketing (e.g., helping children) and this impact gets amplified when the air pollution gets worse. Moreover, the positive effect of air pollution on customer’s purchase amount is also supported by a first- hand observation dataset that spans for more than six years. Furthermore, the customers from different tie of cities and the users who use different platforms to make purchases are found to present heterogenous attitudes toward air purifiers in bad air quality days. The rich managerial implication for managers and policy makers behind these results are discussed in the last section of this paper. Last, the findings of the potential factors that affect consumers’ purchase intention and behavior also offer interesting directions and paths for future studies.