• (The) Korean Journal of Advertising
• /
• v.28 no.6
• /
• pp.35-54
• /
• 2017

The importance of utilizing an effective reward program has been emphasized as a tool for promotional strategies to acquire and retain customers. When consumers participate in a reward frequency program, they tend to focus more on points or mileage than the actual reward itself. This phenomenon is what Hsee, Yu, Zhang, and Zhang (2003) called "medium maximization." In this article, we hypopthesize that the medium effect may disappear when there is a close relationship between the product and the reward as it evokes the correlation of the two directly. The results of the current research show that the medium effect disappears in a strong relation condition while it does exist in a weak relation condition. Furthermore, we found that these results cannot be explained under an alternative "evaluability hypothesis" as Hsee, Loewenstein, Blount, and Bazerman (1999) and Hsee (1996) claimed. Even when we provided price range information as well as medium information, the medium effect still occurred. In this article, we explored boundary conditions for the medium effect and demonstrated the moderating effect of the relationship between products and rewards. Practical implications of the findings were also discussed for designing separate reward programs.