This article examines how the preorder strategy influences the consumers’ product choice. The results reveal that consumers who preorder are more likely to choose a high price, high performance option rather than a low price, low performance option. Product experience is a key moderator of the effects of the preorder strategy. During the preorder period, more inexperienced consumers chose a premium option (front orchestra seats) than a value option (rear orchestra seats). However, for experienced consumers, the preorder effect disappears. In addition, the timing of payment also moderates the effect of the preorder strategy. Respondents in the preorder & pay-later condition chose the premium option (front orchestra seats) more often than those in the preorder & pay-now and regular selling & pay-now conditions. However, the respondents’ choice of the premium option did not show a significant difference between the preorder and pay-now condition and the regular selling & pay-now condition.

Introduction

In late 2009, Apple released the iPhone 3GS in South Korea on preorder. Consumers could preorder the iPhone 3GS up to a week before it was released in order to acquire it immediately upon its launch. Apple recorded a total of 848,206 sales for the iPhone 3GS in South Korea, not including business to business sales. The preorder sales amounted to 3.08% of the total (N = 26,102). At the time, consumers had a choice between the 16G and 32G models of the iPhone 3GS. Interestingly, the sales data (Table 1) show that the share of the 32G model (the high price and high performance option) decreased significantly during the regular selling period (i.e., after-launch sales) as compared with the preorder purchase period (dropping from 43.7% to 32.6%; β = ۰٫۴۷۲, Wald(1) = 1381.26, p < .001). This result gives rise to the research questions of whether and how the preorder strategy affects the consumers’ product choice. The preorder strategy is a new product-launch tactic that allows consumers to purchase new products prior to their release (Chu & Zhang, 2011). Popular products such as Apple’s iPhone, Microsoft’s Windows 7, Nintendo’s Wii, and Sony’s PlayStation 3 are available for preorder. As firms have turned increasingly towards a preorder strategy for new product releases, the strategy has drawn attention from academic researchers.