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The bottom-dollar effect is a concept important to those in the sales and retail industries. Regardless of the price of an item, consumers experience negative emotions when parting with the last of their money. They then transfer these negative emotions to the product, resulting in more negative reviews than would be expected. This means that salespeople must be conscious of the financial situation of their potential buyers. There are strategies that can be used to avoid the bottom-dollar effect. For example, a company could wait to ask for reviews until after their customers receive a paycheck so that consumers feel more financially secure when they provide the feedback.
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Robin L. Soster, Andrew D. Gershoff, William O. Spending that exhausts a budget is shown to decrease satisfaction with purchased products relative to spending when resources remain in the budget.
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This story appears in the April issue of Entrepreneur. Whether the U. But there's no question that it's a lot less muscular than it was a few years ago. And it's likely to get weaker yet, as Asian countries that have been protecting the U. In this environment, imported goods become more expensive while American exports become cheaper abroad.
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When we buy a product that exhausts our remaining budget, the negative emotions associated with parting with money are transferred onto the product, thereby influencing its ratings. In a recent study on the Bottom Dollar Effect, people were asked to purchase 3 online movies using assigned credits, with each movie costing 10 credits. Some people were given a budget of 30 credits, while others were given 50 credits. What could possibly happen as a result??
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