“Colors are ubiquitous in consumer contexts,” said marketing associate professor Rajesh Bagchi. “Identical products are often sold in different colors or with different colors of packaging. Shopping mall walls, aisles, and displays use multiple colors, as do website backgrounds and product displays. Colors are also an integral part of ads and company logos.”
Yet, most shopping studies have focused on consumers’ evaluation of stores and products, he said, and little is known about how color affects consumers’ willingness to pay. So Bagchi and co-researcher Amar Cheema, of the University of Virginia, set out to investigate how red and blue colors, in particular, influence willingness to pay and purchase likelihoods in different types of purchase settings: auctions, negotiations, and fixed-price (retail, for example) contexts.
The researchers found that at auctions and similar situations where consumers compete with one other to buy a scarce or a limited edition product, willingness to pay was strengthened through exposure to red rather than blue backgrounds.
In contrast, in situations that allowed negotiations — when a product is readily available, for example, and the consumer competes with the seller to get a lower price through haggling or an extended price search — willingness to pay was weakened by red backgrounds compared to blue.
Their study, “The Effect of Red Background Color on Willingness-to-pay: The Moderating Role of Selling Mechanism,” will be published in the Journal of Consumer Research.
“Our results suggest that incidental exposure to color on web page backgrounds or on walls in brick-and-mortar stores can affect willingness to pay,” Bagchi said, “and have important implications for website and store design.”
Fortunately, for retailers, it is fairly straightforward to change background colors, particularly on websites, he noted. “Firms could even customize colors based on the selling mechanism and product characteristics.”
Read the full story, “Color Consumption,” and learn more about how Bagchi, who received a degree in civil engineering, made a career switch to consumer behavior scholar, in the fall 2012 issue of Pamplin magazine.
Bagchi received Pamplin’s 2012 Junior Faculty Research Excellence Award.
Virginia Tech’s nationally ranked Pamplin College of Business offers undergraduate and graduate programs in accounting and information systems, business information technology, economics, finance, hospitality and tourism management, management, and marketing. The college emphasizes the development of leadership, technology, multicultural, and international business knowledge and skills and is committed to serving business and society through the expertise of its faculty, alumni, and students. It is named in honor of two alumni: the late Robert B. Pamplin, retired CEO of Georgia-Pacific, and businessman and philanthropist Robert B. Pamplin Jr.