The Role of Product-Premium Fit in Determining the Effectiveness of Hedonic and Utilitarian Premiums

This research explores how the effectiveness of hedonic and utilitarian premiums is contingent with the degree of product-premium fit. It is proposed that the effectiveness of utilitarian/hedonic premiums is higher at a high/low degree of fit between the premium and the focal product. Specifically, a series of three experimental studies were conducted. Consistent with expectations, Study 1 found that at high product-premium fit utilitarian premiums were preferred over hedonic ones, while Study 2 revealed that hedonic ones were preferred at a low-fit condition. To further validate these preliminary results, Study 3 developed a full factorial experimental design wherein the interaction effect between the nature of the premium and product-premium fit on consumers’ liking, purchase intention and positive word-of-mouth was evaluated. This study confirmed the existence of a significant interaction effect and the direction of the simple effects was consistent with findings from Studies 1 and 2. However, the differences were only significant at a low-fit condition.