Rrl on Psychological Reactance and Gasoline Prices

Without any doubt, gasoline paved the way alongside technology for some innovative inventions that up to this point are still used for consumption. However, we know that it is not a renewable resource. Science tells us that. Sooner or later, it will diminish and will force other people to look for other sources of energy.

The effects of rising gasoline prices may affect the psychological reactance of a consumer thus may initiate different ways in order to not provoke their reactance towards their products. In one way or another, the consumers can show any form of emotions once their freedom is touched or rather provoked, a definite action shall be observed.

Psychological Reactance can be seen in the behavior, beliefs, affects, and attitudes of the consumer in a given situation. Reactance would pertain to the motivational state of the person whose freedom is threatened. “Freedom” is referred to as the ability to choose among two or more different alternatives of a consumer good, including the alternative of not purchasing the said good. It is based on the “Reactance Theory”, which deals with specific, discrete, behavioral and attitudinal freedoms that people act upon in everyday life. These freedoms can be identified in this study as the choices which the consumers can make when purchasing gasoline in the situation where they are faced with the threat of rising prices and the influence of the marketers who would try to use different promotional strategies in order to attract the consumers to purchase from their retail gasoline stations. The general effect brought into play by this reactance arousal will usually mean that the consumer will be increasingly interested in whatever free behaviors or attitudes are threatened, in this case, the freedom of buying gasoline at a reasonable price. There will also be a decreased attraction to behaviors or attitudes that are forced upon the consumer, which are the promotional strategies of some marketers which may be aggressive at times.

Gasoline prices have climbed to record levels because of the continued increase of the price of oil. The refineries and retailers cannot refrain from passing the higher cost of making gasoline to consumers. There has been a consistent gasoline price increase since the beginning of the year, and consumers are starting to feel the pinch on their wallets. Although the gasoline prices seem like they are the same for all retailers, one may observe that there are small price differentials in the prices of these individual retailers. In retail distribution of gasoline, operators who do not follow a policy of price leadership must frequently decide whether to ignore or react to lower prices of competition. Competition in the retail sale of gasoline is always present. The operator who is not a price leader and who wishes to maximize his revenue can choose the optimal strategy of lowering his prices against that of the price leader or by using promotions similar to electronic tickets, smart cards, and online prepayment to attract customers if he has accurate estimates of the daily demand and carry over effect. The estimates of how effective these promotional strategies are can be measured through two kinds of purchase acceleration. The first one being the purchase of a larger quantity of the product at a time and the second one being the shortening of interpurchase time.

The measurement of how effective a marketing promotional strategy in the condition of rising gasoline prices with small price differentials between retail gasoline stations would fall under the study of the psychological reactance of the consumer in the said situation.

Price differentials and Psychological Reactance are closely related according to the articles that we, Group 1, researched so far. We have discovered within the results that both variables, if connected together, potentially can create an inverse relationship in nature, as one variable increases, the other decreases. A potential relationship connector between the two variables is the concept of advance payment.

Psychological Reactance through application can be seen in the behavior, beliefs, affects, and attitudes of the consumer in relation to promotions like electronic tickets, smart cards, and online prepayment in the situation where gasoline prices are constantly increasing causing retail gasoline stations to have price differentials.

There is a trend in an article that we have researched. It indicated that the consumers tend to be dictated by the changing prices of gasoline. With the increasing prices, the miles driven per car have decreased and most of the car owners shifted from large cars to smaller ones. Could this be caused by the consumers’ psychological reactance to price differentials? Traditional car buyers usually base their decisions with the car’s