Hedonic or utilitarian premiums: does it matter?

Abstract

Purpose – This study aims to analyse what type of premium, hedonic or utilitarian, is preferred in a promotional context. Additionally, it seeks to examine the role of affective and cognitive reactions in decision processes where utilitarian and hedonic premiums are involved. Design/methodology/approach – Three experiments were conducted. A single factor within-subjects design was employed, with the nature of the premium (hedonic/utilitarian) as the treatment factor. Respondents were asked to make their choice between two promotional offers. Affective and cognitive reactions were measured. Regression analyses were conducted to test the hypothesized effects. Findings – The results show that hedonic premiums are preferable to utilitarian ones in a promotional context, other characteristics of the premium (e.g. premium attractiveness) being equal. The findings also identify that a preference for the hedonic/utilitarian premium is more likely to emerge when affective/cognitive reactions are incited, and indicate that the nature of the preferred premium determines the mediating effect of cognitive reactions. Research limitations/implications – The paper only focuses on the hedonic/utilitarian nature of the premium. However, premiums come in very different forms and several characteristics – such as a premium with a relatively low price, the reception delay of the premium, and the perceived fit between the product and the premium – may reverse the relative preference for hedonic premiums. Practical implications – The hedonic vs utilitarian nature of the premium should be considered when planning premium promotion. It appears that the use of more hedonic premiums increases the effectiveness of promotional actions alongside other variables such as premium attractiveness, the promotional benefit level or the product-premium fit. Furthermore, the type of premium offered influences the role of affective and cognitive reactions aroused during shopping. Thus, the nature of the premium may influence the reactions of consumers when participating in promotional actions. Originality/value – The research extends the factors that may explain the effectiveness of premium promotions, since few studies to date have focused on the hedonic or utilitarian nature of premiums.

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