Verification of the Compromise Effect’s Suitability Based on Product Features of Automobiles

Abstract

Compromise effect is a typical marketing measure that induces consumer cognitive bias. When choices are presented in three grades, consumers tend to choose the middle grade. However, in existing research, there are few examples that focus on the product features of high value-added and low-priced products within the same manufacturer's brand, as conditions for the appearance of compromise effects. This study examined web quotations in the Japanese automobile industry for differences in the compromise effect due to product features. As a result, it became clear that the compromise effect appears in low-priced products such as microcars and compact cars, whereas for high value-added products such as SUVs and minivans, the highest grade is likely to be selected. Compromise choices were also likely to occur in the answers given using smartphones, but no compromises were seen when using personal computers. During the survey, respondents’ power of concentration was less in the case of smartphones probably due to its small screen and because they tended to operate it while moving. Therefore, as a decoy for low-priced products, it is effective to set the upper and lower grades. Conversely, high value-added products should be designed with the highest grade as the main product.