The impact of prospect theory based framing tactics on advertising effectiveness

Among the most important decisions managers make is the determination of the most effective advertising strategies (and their associated tactics) and the determination of the market segments for which each strategy will be effective. Little research has explored the application of prospect theory based framing tactics (described in the text) to advertising. In this research we empirically test three framing tactics simultaneously, to study their individual main effects, and the interaction effects among them. We also test the moderating effect of buyers' prior knowledge of the product category. We used a fractional factorial experimental design to study purchase likelihood as a function of the above framing tactics, using 216 women, ages 25 to 49, who owned or were thinking of buying a video camera. Some of the most interesting results involved significant two-way interaction effects. As expected, subjects responded differently, depending on their level of product category knowledge. One framing tactic was more influential on high knowledge subjects than on low or moderate knowledge subjects. Other interactions among the several framing tactics yielded significant and interesting results.