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Article
Publication date: 9 November 2012

Sally McKechnie, James Devlin, Christine Ennew and Andrew Smith

The objective of this paper is to examine the framing effects of discount presentation format in comparative price advertising in a low‐price and a high‐price product context. In…

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Abstract

Purpose

The objective of this paper is to examine the framing effects of discount presentation format in comparative price advertising in a low‐price and a high‐price product context. In particular, the authors study whether identical discounts presented in percentage and absolute terms result in different consumer perceptions of transaction value and purchase intention. Although price promotions have been the subject of previous research, a closer examination of the potential moderating influence of discount size in both contexts is warranted.

Design/methodology/approach

Two separate experiments were designed to isolate the effects of the manner in which discounts are numerically expressed and the size of the discount on consumers' perceptions of a retail price promotion in a low‐price and a high‐price product context.

Findings

The effects of discount framing in comparative price promotions are found to be influenced by discount size in the case of the low‐product context but not the high‐price one.

Research limitations/implications

It is recommended that the study be replicated for other types of low‐price and high‐price products to confirm the generalisability of the results for each product context.

Practical implications

Retail managers' choice of discount presentation format for both low‐ and high‐price product contexts, and in the case of the former the additional manipulation of discount size, have an impact on the ability of comparative price promotions to accelerate purchases. Meanwhile policy makers should continue to assign significant time and resources to investigating concerns about misleading price comparison based promotions.

Originality/value

The paper provides original insights into the importance of considering the joint effects of discount presentation format and discount size on consumers' perceptual and behavioural responses to retail price promotions, unlike previous research, which has examined these framing effects separately.

Details

European Journal of Marketing, vol. 46 no. 11/12
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 4 September 2019

Gordhan K. Saini, Arvind Sahay and Gurumurthy Kalyanaram

This paper aims to examine three important questions: What would be the effects of pricing at the lower end of a wide vs narrow latitude of price acceptance (LPA) on consumer…

Abstract

Purpose

This paper aims to examine three important questions: What would be the effects of pricing at the lower end of a wide vs narrow latitude of price acceptance (LPA) on consumer choice of the bundle? How would the nature of a bundle frame (i.e. discount on bundle vs discount on components) and discount frame (i.e. discount as absolute off vs discount as percentage off) influence the preference given to a price level that is at the wide or narrow end of the LPA? Would the effect be significantly different if the bundle components were complementary vs if they were non-complementary?

Design/methodology/approach

The authors carried out two studies using between-subject experimental design. In Study 1, the authors used 2 (LPA: wide/narrow) × 2 (complementarity: yes/no) × 2 (bundle frame: together/separate) design, and in Study 2, the authors replaced bundle frame with discount frame (i.e. absolute off/percentage off).

Findings

The authors find that the LPA effect is likely to outweigh the complementarity effect; however, a combined effect of complementarity and bundle frame is stronger than the LPA effect. Also, for a wide (narrow) LPA product bundle, absolute off (percentage off) discount frame is more attractive.

Practical implications

Managers should use bundling strategy with complementary products having wider LPA. In case of wide LPA and complementary products, both together and separate frame could be the best bundling strategy while in case of narrow LPA and complementary products, together frame could be the best bundling strategy.

Originality/value

The main contribution relates to the role LPA plays in consumer evaluation of a bundle offer and its interaction with complementarity and discount frame. The authors apply the range hypothesis principles (i.e. price-attractiveness judgments are based on a comparison of market prices to the endpoints of a range of evoked prices) in the bundling context and extend the earlier work in the area of complementarity and discount frame.

Details

Journal of Consumer Marketing, vol. 36 no. 7
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 7 August 2023

Bo Wang and Tingting Xie

According to construal level theory, close (versus far) psychological distance is associated with low (versus high) construal level. Despite the evidence for discount frame

Abstract

Purpose

According to construal level theory, close (versus far) psychological distance is associated with low (versus high) construal level. Despite the evidence for discount frame effect, it is unclear whether psychological distance and product nature play moderating roles. In addition, little has been known whether the effect of discount frame can extend to other dependent variables such as willingness to pay (WTP). Driven by construal level theory, five experiments were conducted to explore whether the effect of discount frame is dependent on psychological distance and product nature (i.e. utilitarian versus hedonic product).

Design/methodology/approach

The experimental method was used, with discount frame, psychological distance and product type as the independent variables and purchase intention, attitude towards the advertisement, perceived value and WTP as the dependent variables. Participants were presented with promotion scenarios in which psychological distance and discount format were manipulated. In order to test the generalizability of results, promotional scenarios for both utilitarian (i.e. backpack bag and shampoo) and hedonic products (i.e. scenery ticket and perfume) were presented. Data were collected via the online experiment platform (i.e. www.Credamo.com).

Findings

The authors found an interaction between discount frame and spatial distance in that consumers had more positive attitude toward percent off than amount off under near-spatial distance. However, no interaction was observed between discount frame and temporal, social or hypothetical distance.

Originality/value

Taken together, the current study for the first time reveals that the effect of discount frame is contingent on a specific dimension of psychological distance (i.e. spatial distance), regardless of whether the product is utilitarian or hedonic. Findings from this study for the first time pose a challenge to the notion that construal-level match necessarily leads to more favorable consumer responses, suggesting that there may be a unique mechanism underlying the joint effects of spatial distance and discount frame. The current findings can provide important implications for marketers and retailers in an effort to design effective promotional messages.

Details

Marketing Intelligence & Planning, vol. 41 no. 6
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 21 June 2022

Bo Wang

This study examines whether the absolute number heuristic holds for consumers' responses to higher-priced versus lower-priced products. Further, it explores whether the different…

Abstract

Purpose

This study examines whether the absolute number heuristic holds for consumers' responses to higher-priced versus lower-priced products. Further, it explores whether the different construal level as induced from presence or absence of a product image can be a boundary condition for the absolute number heuristic.

Design/methodology/approach

Four experiments were conducted. In Experiments 1 and 2, participants were presented with a discount either in the amount off or percent off format, for products whose prices were 99 Yuan, 100 Yuan and 101 Yuan, respectively. In Experiment 3, the prices were changed to be 90 Yuan, 900 Yuan and 9,000 Yuan, respectively. In Experiment 4, the prices were 48 Yuan and 480 Yuan, respectively.

Findings

Experiment 1 showed neither main effect of discount frame nor interaction between price level and discount frame for all dependent variables (i.e. willingness to pay or WTP, purchase intention, attitude and perceived value), thus posing a challenge to the absolute number heuristic. Notably, the lack of main effect and interaction for purchase intention, attitude and perceived value were replicated in Experiments 2, 3 and 4. With WTP being the dependent variable, however, Experiment 4 showed that the effect of discount frame was dependent on price level.

Research limitations/implications

The current findings pose a challenge to the absolute number heuristic and contribute to the literature by revealing that the joint effects of price level and discount frame can be moderated by whether an ad contains the product image.

Practical implications

It is necessary for marketers to realize that inclusion of a product image may eliminate the effect of discount frame. Specifically, in terms of promoting a relatively expensive product, in order for the percent off discount to enhance the amount of money that consumers are willing to pay, an ad without a product image may be more favorable.

Originality/value

The current study is the first to challenge the absolute number heuristic by showing that the interaction between price level and discount frame is contingent on whether an ad contains the product image.

Details

Marketing Intelligence & Planning, vol. 40 no. 7
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 19 July 2021

Misun Won and Stephen L. Shapiro

The purpose of this study is to examine consumer behaviors toward a bundle of tickets and lodging using two different message framing: (1) scarcity framing for a high demand…

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Abstract

Purpose

The purpose of this study is to examine consumer behaviors toward a bundle of tickets and lodging using two different message framing: (1) scarcity framing for a high demand event, the All-Star Game, and (2) discount framing for a lower demand event, an MLB mid-week game.

Design/methodology/approach

Data were collected through two online surveys of 836 sport consumers in total on Amazon Mechanical Turk (MTurk) and were analyzed using a mix of analysis of variances (ANOVAs) and analysis of covariance (ANCOVA).

Findings

Consumers are likely to buy products separately in a scarce situation. When discounts are offered as benefits of choosing a bundle, consumers with high willingness to pay (WTP) have higher purchase intentions (PI) and perceived value toward cumulative discounts.

Originality/value

This is the one of few studies that investigate (1) price bundling of products from two disparate industries where consumer demands fluctuate, (2) the effects of scarcity in a bundle, and (3) all possible discount messaging in a bundle.

Details

Sport, Business and Management: An International Journal, vol. 11 no. 5
Type: Research Article
ISSN: 2042-678X

Keywords

Article
Publication date: 1 December 2006

Philip Gendall, Janet Hoek, Tracy Pope and Karen Young

The purpose of this paper is to report the results of two experiments designed to examine the effect on consumers of the way in which price discount messages are expressed, or …

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Abstract

Purpose

The purpose of this paper is to report the results of two experiments designed to examine the effect on consumers of the way in which price discount messages are expressed, or “framed”.

Design/methodology/approach

Both studies involved stated‐preference choice modelling experiments. The aim of the first experiment was to test the hypothesis that a price reduction framed in dollar terms is more effective for high‐priced items, whereas a price reduction framed as a percent discount is more effective for lower‐priced items. The aim of the second experiment was to determine which of four alternative ways of expressing the same 33 per cent price discount – cents off, percent discount, or one of two volume discounts – is most effective.

Findings

For two “low‐priced” items, potato chips and cola drinks, the framing of a price discount had little or no effect. However, for two ”high‐priced” items, stereos and computers, framing a discount in dollar terms was significantly more effective than expressing it as a percent off discount. For three fast moving consumer goods the most effective framing of the same price discount depended on whether the product concerned was amenable to stockpiling. For tinned spaghetti, which is relatively cheap and easy to store, volume discounting was more attractive than a monetary discount, whereas for bottled water and semi‐soft butter, which are more expensive and bulkier, the opposite was true.

Originality/value

For high‐priced products, it is better to express price discounts as dollars or cents off than as a percentage off; the opposite may be true for low‐priced products, but this is much less certain. However, if using a volume promotion, “buy x get one free” is likely to be more effective than “y for the price of x”.

Details

Journal of Product & Brand Management, vol. 15 no. 7
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 24 August 2010

Khaldoon Nusair, Hae Jin Yoon, Sandra Naipaul and H.G. Parsa

The purpose of this study is to investigate the effects of price discount frames and price discount levels on consumer perceptions about the quality of the service product, the…

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Abstract

Purpose

The purpose of this study is to investigate the effects of price discount frames and price discount levels on consumer perceptions about the quality of the service product, the value of the discount, their purchase intentions and their willingness to spread the word of mouth about the discount savings across different types of services.

Design/methodology/approach

The study uses an experiment design method using three interesting variables: discount format, discount level and service industry type. The experiment included four different types of low‐end price service levels: restaurants, hotels, mailing services, and retail services.

Findings

The findings indicate that price discount frames and discount levels do affect consumers' perceptions on the value of the discount, the quality of the service, their intention to purchase and their willingness to engage in WOM advertising.

Practical implications

The practical implication for service firms that want to use price discount promotions to encourage sales and increase revenue is that they should carefully consider the price range and the value or quality of image they intend to signal when using these different price discount frames and the service they are selling to determine the discount level to use.

Originality/value

This paper is valuable to low‐end service marketers that seek to use price discount promotions to encourage sales and increase revenue.

Details

International Journal of Contemporary Hospitality Management, vol. 22 no. 6
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 20 July 2023

Siddharth Harshkant Bhatt and Dinesh Ramdas Pai

“Buy X Get X Free” promotions are popular across retail settings. Retailers promote a variety of products using this promotional frame. However, past research contains mixed…

Abstract

Purpose

“Buy X Get X Free” promotions are popular across retail settings. Retailers promote a variety of products using this promotional frame. However, past research contains mixed findings about the effectiveness of this promotion compared to the straightforward discount on a single unit of a product. The goal of this research is to employ a theoretical lens to examine the effectiveness of “Buy X Get X Free” promotions.

Design/methodology/approach

The theoretical framework was tested in two experiments using different products and samples. The data collected from each experiment were analyzed using both descriptive and inferential techniques to assess support for the theoretical arguments.

Findings

Findings reveal that at identical levels of per-unit discount, the “Buy X Get X Free” promotion is perceived less favorably by consumers than a straightforward single-unit discount. Consumers perceive lower transaction value and acquisition value and, thereby, a lower purchase intention, from the “Buy X Get X Free” promotion compared to a single-unit discount.

Practical implications

This research was conducted keeping in mind the popularity of the “Buy X Get X Free” promotion in the real world. The findings caution retailers against indiscriminately using this promotional frame.

Originality/value

Using a theoretical lens, this research proposes and validates a framework to systematically examine consumers' perceptions of the two popular discount frames. The proposed theoretical framework provides a richer understanding of the underlying consumer psychology that drives the evaluation of these promotions. Further, primary data from lab experiments validates the framework. The research also helps advance the understanding of consumer evaluation of sales promotions in general.

Details

Marketing Intelligence & Planning, vol. 41 no. 6
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 16 March 2015

Arvind Sahay, Sumitava Mukherjee and Prem Prakash Dewani

The purpose of this paper is to study how consumers process price frames of product bundles (product plus surcharge) and discount offers to weigh contentious positions between the…

Abstract

Purpose

The purpose of this paper is to study how consumers process price frames of product bundles (product plus surcharge) and discount offers to weigh contentious positions between the weighted-additive and the reference-dependent models. Further, some research suggests bundling, while others suggest partitioning to be a more effective pricing strategy. This research evaluated the relative influences of different price frames to examine which model is supported and what are the boundary conditions for price framing.

Design/methodology/approach

Two online studies were conducted on Indian adults who had prior experiences of online purchases. They were asked to judge attractiveness of bundles (product along with shipping surcharge). Discounts were shown on the product, the surcharge or on the overall bundle either as partitioned prices or as a bundle.

Findings

Across two studies on low- and high-priced products, discounts on shipping surcharge increased attractiveness of the bundle compared to a similar discount on the product or on the overall bundle, supporting the reference-dependent model. Further, for a low-priced product, bundling increased attractiveness, while for a high-priced product, partitioning was more attractive.

Research limitations/implications

More research is needed to examine whether these results translate to other kinds of products, surcharges or discount promotions and in different populations.

Originality/value

This research makes important contributions to theoretical and practical aspects of bundling and partitioned pricing research. It also adds much needed data about evaluation of product bundles with shipping surcharges among Indian customers.

Details

Journal of Indian Business Research, vol. 7 no. 1
Type: Research Article
ISSN: 1755-4195

Keywords

Article
Publication date: 8 May 2017

Salome Drechsler, Peter S.H. Leeflang, Tammo H.A. Bijmolt and Martin Natter

The purpose of this paper is to compare the impact of different multi-unit promotions (MUPs) and a single-unit promotion (SUP) on store-level sales and consumer-level purchase…

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Abstract

Purpose

The purpose of this paper is to compare the impact of different multi-unit promotions (MUPs) and a single-unit promotion (SUP) on store-level sales and consumer-level purchase probability and quantity decision.

Design/methodology/approach

The paper combines two empirical studies. Study 1 applies a hierarchical multiplicative model to store-level sales data for four product categories provided by a large Dutch retail chain. Study 2 presents a laboratory experiment in which the quantity requirements of the two focal MUP frames are manipulated to assess their impact on consumer purchase decisions.

Findings

The paper provides empirical evidence for the superiority of the “X for $Y” above “X + N free”, which confirms the hypotheses based on prospect theory, mental accounting and theory about gift-giving. Quantity requirements of four to five units show the largest effects. In addition, the superiority of the “X for $Y” frame holds for functional product categories, but not for the hedonic categories.

Practical implications

The paper provides managerial insights into the relative effectiveness of alternative MUPs and an SUP and how this promotional effectiveness depends on the type of product category and quantity requirements.

Originality/value

This paper combines actual sales data and experimental data. This “mixed approach” extends existing knowledge by comprehensively evaluating two MUP frames, namely, “X + N free” and “X for $Y” promotions, and an SUP.

Details

European Journal of Marketing, vol. 51 no. 5/6
Type: Research Article
ISSN: 0309-0566

Keywords

1 – 10 of over 8000