Hedonic consumption goals and preference for flat-rate tariff: case Relaxation Area at Helsinki-Vantaa Airport

Abstract

Consumer behavior has been widely researched by different disciplines in order to identify and examine preferences and motivational goals of the consumers. In addition to cognitive reasoning, emotions affect consumer’s decision making process. This study attempts to research the interdependency between consumption goals and emotions of the consumers, more specifically the interconnection between hedonic consumption goals and preference for flat-rate tariff, a fixed price for the service usage without time limitations. The interconnection is researched by examining results of Relaxation Area survey, which was conducted at Helsinki-Vantaa Airport between September 2013 and March 2014. Relaxation Area was a pilot project initiated by Vantaa Innovation Institute, and the purpose of the survey was to research the impressions, emotions and willingness to pay of the consumers for the new service concept. In this study, tariff-choice preferences and willingness to pay (WTP) of the survey respondents are examined as well as the emotions of the respondents are researched with a target to find evidence for the interconnection between hedonic consumption goals and a prevailing preference for flat-rate tariff.

The methods used in this study are latent-class cluster analysis (LCA) and conjoint analysis. Latent-class cluster analysis (LCA) is used for segmenting the survey respondents based on their tariff-choice preferences and conjoint analysis methods are utilized for identifying and examining tariff-choice preferences of the segments as well as scrutinizing the choice probabilities of the individual respondents for flat-rate vs. pay-per-use tariff.

The results show that the proportion respondents agreeing or disagreeing with hedonic emotions among those preferring the flat-rate is greater than among the respondents favoring the pay-per-use tariff. The findings are consistent both for the clusters identified by LCA and for the individuals with equal or greater choice probability than pre-defined threshold for the probability of selecting certain tariff. Furthermore, the results of the study evidence that willingness to pay of the consumers with high probability for selecting a single price for the whole Relaxation Area i.e. flat-rate, is greater than the WTP of consumers with high probability for choosing pay-per-use tariff, a usage-based price for a relaxation furniture.