BOGO Frees You: Promotions and Adventurous Product Choices

Brands increasingly offer adventurous options (e.g., carrot ginger yogurt or cappuccino chips), and marketers often introduce new and novel variants to attract consumers' attention and satisfy varietyseeking needs. To encourage consumers to try these new products, marketers try to lower to cost to do so by employing various promotions (Kotler & Armstrong, 2010). Indeed, promotions can be effective tools to encourage consumers to switch brands, accelerate their repurchases, and stockpile, increasing basket sizes and ultimately consumer spending (Foubert & Gijsbrechts, 2007; Gupta, 1988; Kahn & Louie, 1990; Van Heerde, Gupta, & Wittink, 2003). However, consumers' reactions to different types of promotional offers vary (Chen, Marmorstein, Tsiros, & Rao, 2012; Hardesty & Bearden, 2003; Kahn & Raju, 1991; Mishra & Mishra, 2011). For instance, while price discount promotions (e.g., 50% price off) and quantity discount promotions (e.g., buy-one-get-one-free or BOGO) offer similar levels of monetary savings to consumers, consumers' reaction to a "free" product is psychologically distinct (Shampanier, Mazar, & Ariely, 2007). Building on this prior research, we propose and demonstrate that BOGO (vs. 50% off) can be more effective in driving adventurous product choices (controlling for the quantity purchased). This is because free entails no direct monetary cost, but only benefits, which invokes more positive affect and leads to affective (vs. cognitive) processing (Shampanier et al., 2007). Critically, consumers who engage in affective processing are more likely to be risk-seeking and impulsive (Metcalfe & Mischel, 1999; Sloman, 1996), which suggests that BOGO promotions might be more effective in encouraging consumers to try novel and adventurous products. Likewise, mental accounting literature shows that potential loss from free choices has relatively lower psychological value and thus might not require opening of a new account (Thaler & Johnson, 1990). Since there is no cost to open a new account, there is also no need to close the account with positive value (i.e, a positive outcome), allowing consumers to experiment with adventurous products that might have a potential downside. Taken together, we propose that a BOGO quantity promotion encourages consumers to engage in affective processing, which increases the choice share of adventurous options. In contrast, a 50% off pricing promotion encourages consumers to engage in cognitive processing because choices stil