Before you offer that generous trade-in incentive, read this
Sizeable rebates can backfire because consumers save the money and upgrade less, according to new marketing research.
Durable goods manufacturers of products such as appliances, smartphones, electronics, and motor vehicles usually have product lines with an upgrading path for customers as they make replacement choices. Sales and marketing teams’ want to encourage consumers to upgrade faster or, even better, to buy more expensive products.
That's why car dealerships use trade-in incentives, special offers common in the automotive industry. Automobiles are expensive to purchase, and consumers are keeping them longer than ever — up to 79.3 months on average in the U.S. These factors made the automotive industry the perfect environment for W. P. Carey marketing professors and their co-author to study to understand how trade-in incentives work.
In an article Feb. 22, 2019, on the American Marketing Association:
When consumers buy products, they engage in a process called mental accounting whereby they consider how much value they have received from a good compared to its cost.
– Michael Wiles, associate professor of marketing
Our research helps manufacturers understand the impact of their trade-in incentive and targeting strategies to better accomplish critical business goals.
– Sungho Park, associate professor of marketing
Latest news
- Inaugural Student Economics Association Alumni Banquet celebrates 48 years
The inaugural event, which the department hopes to continue going forward, was a chance to…
- Love it or hate it, advertising can boost life satisfaction
According to an ASU marketing expert’s new research, reducing marketplace uncertainty through…
- ASU startup's breakthrough in explainable AI secures Air Force contract for reliable transparent models
Business professor leveraged brain theory to patent explainable AI methodology.