In the world of consumer electronics, it's common for companies to create a range of products that are all variations on a theme, containing slightly faster processors or a bit more memory. These products serve two important functions for their producers: they put the price of entry within reach of more consumers, and they induce those with a bit more cash to take steps up the product ladder and purchase a more expensive version. However, a study that has just been released by the Journal of Consumer Research suggests that the companies that take this tack have to be careful about how they go about things. Creating a product range by crippling an existing product can work against the company if word filters out.

The study was motivated in part because of a classic example that backfired. IBM once produced a pair of laser printers that differed solely in terms of their rate of output. The lower page-per-minute version, however, actually required that IBM install a specialized chip that throttled the normal printer's output—it took more work to produce, and cost more to make. That approach did not go over well with purchasers, and the authors are able to cite a history of similar products that resulted in a distinctive (and derogatory) vocabulary: "crippleware," "product sabotage," "anti-features," "defective by design," and "damaged goods."

Nevertheless, there are clearly products on the market—Apple's various i-products, to give a prominent example—that sell well despite the same sort of product differentiation. What explains the difference? The authors hypothesized that it comes down to a matter of perception. Consumers are willing to accept this sort of tiered pricing if they feel it's fair, but tend to frown on it if they feel the method of producing the difference was unethical or unfair. The study they conducted indicated they were right, but that the perception of what's ethical could be influenced in some unexpected ways.

To start with, they simply confirmed the effect by describing a new instance of IBM's approach to crippling a product to a study population, while creating a control group that was told the higher output printer was the one that required more effort to make. People generally felt that paying for an enhancement was reasonable, but responded poorly when it took effort to reduce a product's capabilities, rating that process as not only unfair, but unethical. In fact, they found it so bothersome that they preferred a competitor's product.

Through a series of experiments, however, the authors found a number of ways that companies could reduce (though not eliminate) the negative perceptions of their action. For example, the "everybody's doing it" excuse worked; when people were told that most manufacturers crippled features of low-end phones via software, the study's participants were more tolerant of the practice. Keeping the high- and low-end products distinct, even if it was purely through a cosmetic feature (case color on an MP3 player), also cut down on the sense of dissatisfaction.

It was also clear that people cared a great deal about how the difference came about. For example, simply cutting an internal connection to cripple the low-end product was worse than removing the hardware that supported the feature entirely. The timing of the disabling also mattered. The study's participants were more tolerant of a DVD player that had a high-quality video chip disabled early in the manufacturing process than they were when the chip was disabled as the last step.

In addition to providing some sense of the subtleties of consumer thinking, these studies helped eliminate an alternative explanation for the negative response: consumers don't like waste. It's more wasteful, for example, to remove and destroy a component than it is to leave it in place and cut the connection. Yet the latter approach bothered the study's participants much more.

It's easy to think that little details like this would never make their way into a consumer's brain, and thus are irrelevant to product marketing. But the sudden attention paid to the conditions at places like Foxconn (which manufactures products for Apple and other consumer electronics companies) suggest that companies can't take this for granted. The authors also point out that social media has the potential to take obscure details and turn them into widespread public outrage.

All of which suggests that companies should probably expect that their approach to creating a product range might eventually become the subject of online discussion. And, if they have chosen a process that violates some of the principles laid out by the experiments above, they might end up facing a consumer backlash.

Journal of Consumer Research, 2012. DOI: Not yet available.