Consumers' use of ambiguous product cues: The case of “regionality” claims

Abstract

Ambiguous product cues—cues with multiple interpretation options—may impact consumer decision making. One such ambiguous cue is the designation of a product as “regional” without specifying the exact origin of the product. Here, consumers typically equate “regional” with spatial proximity, yet legally the use of regional labels does not necessarily reflect such proximity. A potential mismatch can occur between consumers' interpretation of regionality and firms' use of regional communication claims, leading to potential consumer deception and harmed consumer welfare. Drawing upon the accessibility-diagnosticity-framework and Elaboration-Likelihood-Model, this paper examines consumers' responses to different regionality cues. Across two studies, we find that communicated regionality cues heighten consumers' product evaluations resulting from (mis)perceived spatial proximity. Informing consumers about the true product results in unfavorable evaluations if that origin is spatially distant. Our findings call for regulation of regional product labels and highlight the need for communication standards in consumer markets.