The document reports on 3 experiments that examined the placebo effect of marketing actions, specifically price discounts. Experiment 1 found that participants who received an energy drink at a discounted price ($0.89 vs the regular $2.89 price) solved more puzzles than those who paid the regular price, but only when expectations were high. Experiment 2 ruled out alternative explanations for these results. Experiment 3 provided further support that response expectancies mediate the placebo effect of price by manipulating expectations. The research demonstrated that marketing actions like price promotions can influence the actual efficacy of products through nonconscious placebo effects.

1. Placebo Effects of
Marketing Actions:
Consumers May Get What They
Pay For
WANGNA

2. Theoretical Background
1) What Is Placebo Effect?
-Substance with no known medical effect
Ex: Sterile water, Saline Solution, Sugar pill
 Placebo
 Placebo Effect
- Real responses from fake treatment with placebo substances
- Expectations play an important role in placebo effect

3. Theoretical Background
2) The Mediating Role of Expectancies
Figure 1: Framework for Placebo Effects
Salient Beliefs
• Intrinsic aspects
• Extrinsic aspects
Response
Expectancies
Subjective/Behavioral
Outcomes
Other Factors
(e.g., self-efficacy beliefs and
related expectancies, as
reflected in no-treatment
control conditions)

4. 1) Can Marketing Actions Lead to Placebo Effect?
 The Key Research Question:
- whether beliefs and expectations that marketing actions evoke
can influence the actual efficacy of the marketed product and
create placebo effects
Group A
Twinlab Ultra Fuel
Regular price ($2.89) Discounted price ($.89)
Workout intensity high Workout intensity low
Felt Less fatigued Felt more fatigued
Twinlab Ultra Fuel
Group B
Preliminary
Study to
Explore the
research
Question
Preliminary Study

5. Limitation of Preliminary Study
 Four Key Limitations
-1.Participants’ perceptions of their behavior
-2.Does not include a no-treatment control group
-3.Participants did not actually pay for the drink
-4.No indication of what underlies the effect
2) Some Limitations of Preliminary Study

6. “3 Experiments”
Placebo Effects of Marketing Actions: Consumers May Get
What They Pay For

7. Main Experiment 1
1. Purpose, Research Design and Procedure
 Purpose of Experiment 1
- Document placebo effect caused by price discounts
- Examine whether placebo effects are mediating by expectancies
- Determine whether the impact of expectancies on placebo effect occurs
nonconsciously
 Design of Experiment 1
- 2 (price: regular vs. discounted) X 2 (expectancy strength: low vs. high)
between subject design.
 Procedure of Experiment 1
- 125 participants were assign to four conditions
- Participants’ attention was drawn to a energy drink named SoBe.
- All participants consumed SoBe, then watched a video for ten minutes
- Then they solved puzzles for 30 minutes
- Participants in high expectancy strength conditions rated their drink-related
expectancies
- For drink, one group was charged regular price ($1.89), another group was
charged discounted price

8. EXPERIMENT 1
(Figure 2)
7.7
5.8
9.5
9.9
0
1
2
3
4
5
6
7
8
9
10
Low Expectancy Strength High Expectancy Strength
NUMBER OF PUZZLES SOLVED
Discounted price Full price
Notes: The number
of puzzles solved i
n the control condit
ion = 9.1

9. Main Experiment 2
1. Purpose, Research Design and Procedure
 Purpose of Experiment 2:
- Find reason not to observe desirable placebo effect of the regular price drink
in experiment 1
- Rule out two alternative accounts:
1) Role of cognitive dissonance in regular price condition
2) Role of entertaining distraction in discounted price condition
- Examine whether drawing attention to price-quality beliefs affect the observed
placebo effect
 Design of Experiment 2:
- 2 (price: regular vs. discounted) X 2 (price-efficacy salience: low vs. high)
between subject design and a control condition
 Procedure of Experiment 2:
- Added new stimuli to manipulate price-efficacy
(“Given the price I was charged for SoBe,…”
- Other procedures were same as experiment 1

10. EXPERIMENT 2
(Figure 3)
6.8
8.28.3
8
0
1
2
3
4
5
6
7
8
9
10
Low Price-Efficacy Strength High Price-Efficacy Strength
NUMBER OF PUZZLES SOLVED
Discounted price Full price
Notes: The number
of puzzles solved i
n the control condit
ion = 8.0

11. Main Experiment 3
1. Purpose, Research Design and Procedure
 Purpose of Experiment 3:
- Obtain further support for the role of response expectancies
- Examine the role of other mediators (motivation, alertness)
- Rule out an alternative account related to mood states
 Design of Experiment 3:
- 2 (price: regular vs. discounted) X 2 (expectancy strength: low vs. high)
between subject design and a control condition
 Procedure of Experiment 3:
- Added a second factor (claim) to manipulate expectancy strength
“Drinks such as SoBe have been shown to improve mental
functioning, resulting in improved performance on tasks such as solving puzzles.
In fact, the Web site of SoBe includes references to over 50 scientific studies
suggesting that consuming drinks like SoBe can significantly improve mental
functioning (in the high-expectancy-strength conditions)/slightly improve mental
functioning (in the low-expectancy-strength conditions).”

12. EXPERIMENT 3
(Figure 4)
4.2
7.4
5.8
10.1
0
1
2
3
4
5
6
7
8
9
10
11
Low Expectancy Strength High Expectancy Strength
NUMBER OF PUZZLES SOLVED
Discounted price Full price
Notes: The number of puzzl
es solved in the control cond
ition = 6.8
Before solving the puzzles
, participants in all treatment
conditions rated their drink-r
elated expectancies as did t
hose in the high-expectancy
-strength conditions of Exper
iment 1

13. Contribution, Future research
Scope and Criticism
 Contribution
- Extended placebo literature by Identifying price as a new extrinsic cue
- Proved that placebo effects occur nonconsciously
- Showed price can affect actual efficacy of the product.
- Examine placebo effect of price promotion in different situation
Ex: placebo effect of price promotion in medical products
- research to see whether product features, ad messages and distribution
channels can influence the physical effectiveness of the products
- Research to identify additional moderators of the effect
- research to see why only undesirable placebo effects occurred to discounted
price
 Future Research Scope
 Criticism
- Only one product category (energy drink)
- Extremely discounted price ($2.89 to $.89)

14. Q/A