Mental budgeting in consumer practice. The role of product typicality in the mental budgeting process

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Previous research on mental budgeting has shown the existence of certain mental budgets. Up until now, it remained unclear how exactly consumers allocate expenses to certain spending categories in practice, and what role product typicality might play in it (Question 1). To improve our understanding of the mechanisms that might underly the mental budgeting process, 17 in-depth interviews were conducted in which participants were given the task to allocate 20 different expenses to spending categories they used in real life. Via this approach, the logic and reasoning behind several allocation decisions was assessed. Interesting motivations for using budgets were discovered, as well as the reasoning behind the formation of certain budgets. Different types of judgments and considerations were discovered as well, providing insight into how these might influence consumer allocation decisions. Overall, the results indicate that product typicality played an important role in the allocation of expenses. Marketers are often capable of framing their offerings in a way that could make them more or less typical of a spending category. Typical expenses often require less effort to be allocated to a spending category compared to less typical expenses. Via certain product cues, marketers could suggest alternative ways to post an expense, potentially increasing perceived product typicality and even buying probability. To discover whether the concepts of product typicality, effort during allocation, and buying probability were related to one another (Question 2), a mixed within- and between-subjects experiment was created, and data was collected via a survey. Results indicate that a product cue was indeed capable of impacting product typicality assessments and increasing buying probability ratings. However, the usefulness of these cues depended on the type of expense being judged. Results also indicate that the relatedness of these concepts was especially relevant for expenses occurring relatively infrequently.
Faculteit der Managementwetenschappen