Search results

Based on the concept of information salience, the research investigates the factors that might drive potential differences in consumers' preferences between offers framed as free with purchase or as a bundle.

Four experiments examined how participants' preferences for bundled offers or free-with-purchase offers varied as a function of the perceived benefits to be obtained from the supplementary products (studies 1a and 1b) and identified participants' sensitivity to the price of the supplementary component as a mediator of the framing effect of a promotional offer (study 2) and the provision of information facilitating the drawing of comparisons as the boundary condition constraining the effectiveness of a free-with-purchase offer (study 3).

Results show that a bundled offer is preferable to a free-with-purchase offer when the supplementary product provides a high-level rather than a low-level benefit and identify price sensitivity as an underlying mechanism behind the observed effect. Furthermore, consumers' sensitivity to the value of the focal product in the deal brought to their attention by comparative information makes a fair charge for a relatively unattractive component the preferable offer.

While much of the existing published research on bundled offers focuses on the assigning of discounts to individual products in the bundle, this study adds to the body of knowledge by showing that variation in perceived benefits is the key driver of different responses to a free-with-purchase offer versus a bundled offer.

The underlying thesis of this paper is that consumers will infer that the costs of production of a product that is offered free are low, and this will reduce the price they are willing to pay for the product when it is a stand‐alone offering.

Two laboratory experiments examine how consumers respond to products that have been offered as “free gifts with purchase” of another product.

Study 1 shows, that when an economically identical offer is framed as a joint bundle (Buy X and Y for $), compared with when it is framed as a “Buy one, get one free” offer, consumers are willing to pay less for the product offered “free.” Study 2 shows that, when a product is given away “free,” then consumers are willing to pay less for it as a stand‐alone product, especially when the original promotional offer does not include the price of the free gift.

Results imply that the design and communication of consumer promotions affect the price consumers are willing to pay for a product.

Managerial implications for the design and communication of consumer promotions are discussed.

The paper adds to the growing body of research that shows that a price promotion has more than just an economic effect; it also has an informational effect through which it affects consumer responses.

This study shows the influence of consumers' goal and strategy of maximization on the process behind their behavioral response to price.

Data was collected through a 2×2 experimental design involving 314 respondents and analyzed using PLS-SEM.

The results show that when buyers maximize, their transaction value and acquisition value perceptions predict their behavioral response to deals and discounts. Further, these buyers do not consider sales price information to form their internal reference price. On the other hand, when buyers satisfice, their transaction value perceptions predict the behavioral responses to price deals, and the relationship between transaction value and the behavioral response is not mediated by acquisition value. Further, such buyers consider sales price to form their internal reference price.

The theory of purchase value assumes that consumers seek to maximize their value. Our work relaxes this assumption to show how value maximizers (and satisficers) differ in the process of value formation and their responses to price promotions.

Culture is one of the critical variables in explaining consumer behavior and consumer response to external stimuli. The purpose of this paper is to delineate the relationship between deal proneness and culture. Specifically, this paper examines the relationship between Hofstede’s cultural dimensions, namely, power distance, individualism/collectivism, masculinity/femininity and uncertainty avoidance, and deal proneness. Additionally, the role of store image as a moderator between culture and deal proneness is explored. Finally, the paper offers prescriptive and descriptive insights for marketers to consider cultural perspectives when promoting products internationally. A clear understanding of cultural influences on deal proneness will allow marketers to target specific customer segments more accurately.

The authors collected data from consumers in shopping malls in USA, Thailand, and Kenya. The authors analyzed the data using structural equation modeling.

The authors found that societies with a high femininity index are more likely to respond to deals than masculine societies. An inverse relationship between the Power Distance Index (PDI) and deal proneness may exist, suggesting that societies with a high PDI may be less deal prone. The authors found that individualism index is positively related to deal proneness, and thus societies with a low individualism index should be more deal prone. Finally, individuals in high uncertainty avoidance countries are expected to exhibit low deal prone tendencies.

The study utilized a sample from cities. Consequently, future studies may attempt to validate the relationship posited in this study by utilizing non-urban data. Additionally, the authors look at stores in a mall. Thus, there is a possibility of interaction between mall image and store image. It may be useful to validate the findings of this study by using data from stand alone stores and also examine the interaction effect of mall image and store image on the deal proneness in a given culture.

This study suggests that appropriate store selection for offering deals can possibly augment the effectiveness of deal-based promotions. Specifically, choice of store can alter the context, and thus the perception of the value proposition could increase, which in turn is likely to increase the acceptance of deal-based promotion.

Although several researchers have also examined differences in consumer behavior across cultures yet it appears that there is no direct study that examines the effects of cultural differences on deal proneness using data from three countries (USA, Thailand, and Kenya) which are diverse on all dimensions of national culture. This paper examines the influence of national culture on individual’s propensity to exhibit deal proneness. Furthermore, the paper examines the role of store image on the relationship between national culture and deal proneness.

Pebble Technology Corporation (Pebble) was an early entrant into the smartwatch industry. Pebble’s Founder, Eric Migicovsky, began thinking about creating a smartwatch in 2008 while still an undergraduate engineering student. After selling about 1,500 prototype watches, he was accepted into Silicon Valley’s prestigious Y Combinator business start-up program. Finding it difficult to attract investors, Migicovsky launched a crowdfunding campaign that raised a record-breaking $10.27m on Kickstarter. The case concludes shortly after Apple’s unveiling of its soon-to-be-released Apple Watch. The case provides an opportunity to evaluate Pebble’s various strategic options at the time of Apple’s announcement.

The authors observed over 30 h of video and audio recordings of speeches, interviews and other events involving Pebble’s founder, other Pebble executives, investors and competitors. These recordings are all publicly available. Whenever possible, the authors also reviewed the Twitter feeds, Facebook sites and personal websites of Pebble’s top executives over time. Similarly, the authors followed Pebble’s official website, corporate blog and Kickstarter campaign websites. The authors also drew from numerous media reports. Due to the public nature of the data, no company release is provided nor has any information been disguised in any way.

The case is designed for both undergraduate and graduate students for courses in strategic management.

The year 2010 was coming to a close, and Kapil, Marketing Manager of GEF India Private Limited (GEF), was thinking about the future. He had drafted a brief (see Exhibit 1) on conducting market research to assess the health of the brand Freedom Refined Sunflower Oil, which GEF had launched in the southern Indian state of Andhra Pradesh (AP) in February of that year.1 Kapil was very happy to note that the brand had achieved good sales, in fact, significantly higher sales than the target set for the launch. This had been achieved thanks to a well-thought-out launch plan that had included considerably more above the line (ATL) marketing expenditure than any of the competing brands in the market. He was interested in finding out whether and where exactly the brand had taken root in the minds of consumers. Another important purpose of the proposed market research was to assess the effectiveness of the launch plan. Above all, he felt it would provide valuable insights when he set out to prepare a marketing plan for the coming year.