Faculty of Business Seminar Series / Maeng, Hyun Chul

Title: Documenting the Positivity Effect: How Praising or Denigrating a Cheaper Product Affects Consumer Trust in an Up-selling Context

Abstract: Up-selling is an important sales technique in which a salesperson recommends a higher end product or additional accessories in an attempt to increase profit. However, little is known about the credibility of these sales messages and how they affect the effectiveness of such upselling efforts. This thesis examines how the valence of sales messages (i.e., messages that praise or denigrate a product’s quality) affect trust in the message; liking for the salesperson and the success of up-selling attempts that follow.

Past research on the negativity effect shows that negative information is, in general, weighted more than positive information because it is more diagnostic. However, the current thesis shows asymmetries in this effect. In an up-selling context, consistent with the prior literature, negative information (versus positive information) about quality increases trust in the message when it pertains to the relatively more expensive model. In contrast, when the salesperson transmits positive (versus negative) quality information about the cheaper model, the positive message is trusted more presumably because the salesperson has no incentive to push the cheaper item. The thesis also finds that when the unit margin difference between two models is small, the effect of message valence on trust in the sales message is attenuated. This thesis further shows that the positive message about the cheap model enhances the valuations of the salesperson. The implication this has for effective up-selling is then documented.

Place : Meeting Room AB2-345