Chang, S. S., Chang, C. C., and Lin, C. Y. 2010. The Impact of Loyalty Program Threshold, Monetary Costs, and Justification of Consumption on Preference toward Rewards. NTU Management Review, 20 (2): 001-018
Shin-Shin Chang, Assistant Professor, Department of Business Administration, Chung Yuan Christian University
Chung-Chau Chang, Professor, Department and Graduate Institute of Business Administration, National Taiwan University
Chu-Ying Lin, Associate Professor, Department of Business Administration, Soochow University
Abstract
This research is aimed at exploring the influence of loyalty program threshold, monetary costs, and consumption justification on consumers' preference toward rewards. Study 1 is a 2x2 between subject experimental design with college students as the unit of analysis, and the rewards for choice are hedonic and utilitarian products. Study 2 is also a 2x2 between subject experimental design, and respondents are working class. The rewards are either luxury or necessity. The conclusions include: (1) Higher loyalty program threshold leads to both a significant increase of preference for hedonic over utilitarian rewards, and a significant increase of preference for luxury over necessity rewards. (2) Free rewards as compared to rewards granted with monetary payment will result in both a significant positive effect on preference for hedonic over utilitarian rewards, and a significant positive effect on preference for luxury over necessity rewards. (3) The portion of living expenses supported by others does not significantly moderate the loyalty program threshold-choice of hedonic/utilitarian rewards relationship. (4) The degree of uneasy feelings does not moderate loyalty program threshold-choice of luxury/necessity rewards relationship. (5) Uneasy feelings toward luxury consumption comparing to hedonic consumption implies luxury deficiency is higher than hedonic product deficiency.
Keywords
loyalty program threshold monetary cost justification of consumption