Ram Mohan Dhara
The study aims to investigate consumers' preferences between hedonic and utilitarian choices under different circumstances. In particular, the preference between hedonic and utilitarian choices under promotion (i.e. discount) and special contexts (i.e. risky situations) was investigated for an individual product and a bundle product comprising hedonic and utilitarian components. The findings were explained using prospect theory. Two experiments were conducted among graduate and post-graduate students in the National Capital Region of India during July – October 2020. It was found that the preference between hedonic and utilitarian choices is reversed in presence and absence of promotion. The risk perception moderates the relationship between promotion and purchase intent in the case that a product and bundle product delivers both choices at the same time. This shows cues to marketers how to use risk perception and promotion to increase persuasion. This study re-establishes the relationship between promotion and purchase likelihood of a bundle product comprising a hedonic and a utilitarian product in a completely different context. At the same time, it is the first study, to best of our knowledge, to investigate the risk perception as a moderator in the above relationship. Additionally, the behaviour is explained through the theoretical lens of prospect theory, thus adding to the literature of hedonic and utilitarian choices, bundle products, and the application of prospect theory in consumer behaviour in risky situations.