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

ABSTRACT 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.