Hidden price promotions: Could retailer price promotions backfire?

Hidden-price promotions, a type of uncertain price promotion in which the final price is not revealed when consumers first encounter the product, have been recently adopted by retailers. However, current research suggests that hidden-price promotions have the potential to backfire and result in reduced consumer purchase intention. Across seven studies, we reveal that hidden-price promotions can be effective but risk increasing discount expectations, as consumers expect a large discount. Only when the discount level meets or exceeds inflated expectations does the excitement built by the promotion positively impact purchase intention. For cognitive purchases, even without providing a high discount, hidden-price promotions are as effective as traditional ones. This research provides guidelines for retailers that want to employ hidden-price promotions.     

Sales promotions for preorder products: The role of time‐of‐release

Preorder offers are increasingly common for many types of products and services. Sales promotions, such as price discounts and free gifts, are frequently used to raise offer attractiveness and elicit a stronger sales response. Through a series of experiments, we show that a preorder promotion's effectiveness depends on whether it matches the construal level associated with timing of the featured product's release. When a match occurs, it increases consumers’ positive affect leading to higher purchase intention directly or by raising the perceived certainty of new product quality. In addition, we find interesting differences related to promotion type. Specifically, we show that a larger discount promotes low‐level construals, which leads to stronger purchase intentions only when the product is scheduled for near‐future release. Since a gift may elicit either high‐ or low‐level construals, a premium offer of higher perceived value leads to stronger purchase intentions regardless of release timing.     

Exploring purchase intention of green skincare products using the theory of planned behavior: Testing the moderating effects of country of origin and price sensitivity

Increased community awareness on various environmental problems has changed consumers’ behaviors and induced purchasing decisions on green products. Applying the theory of planned behavior (TPB), this study aims to explain the effects (i.e., attitude, subjective norm, and perceived behavioral control) on purchase intention of green skincare products; it also aims to determine if country of origin (COO) and price sensitivity moderate the links between purchase intention and its antecedences. Data collected from 300 respondents in Taiwan are tested against the research model by using structural equation modelling. The results indicate that attitude, subjective norm, and perceived behavioral control have a significant impact on purchase intention of green skincare products, and that country of origin and price sensitivity can enhance the positive effects on the links between purchase intention and its antecedences. The findings of this study present important theoretical and practical implications for consumer green product purchase behaviors.     

Retail price discount depth and perceived quality uncertainty

This study analyzes the impact of retail price discount depth on consumer perception of quality uncertainty and its implications. While the extant research finds a negative relationship between perceived mean quality (indicated by the mean of quality perception) and price discount, we suggest an inverted-U-shaped relationship between perceived quality uncertainty (indicated by the variance of quality perception) and price discount. The underlying mechanism for this phenomenon is that consumer attribution of price promotion varies by discount depth. Specifically, when provided with a moderate discount (compared with a low or high discount), consumers cannot ascertain whether the discount is related to product quality; thus, they perceive a higher level of quality uncertainty and correspondingly rely more on other cues, such as country of origin and product popularity information, to make inferences about quality. Those findings have implications for setting the depth of retail price discounts and providing product quality-related information in the context of price promotion.     

The effect of product touch information and sale proneness on consumers' responses to price discounts

Since price discounts are costly and can negatively affect consumers' perceptions of quality, it is crucial to identify the factors that make them effective in stimulating purchase behavior. Drawing on cue utilization theory, we examine price discount effectiveness in affecting consumers' reliance on the sale cue based on the provided product touch information as an intrinsic cue and individual consumer differences in sale proneness. Two experimental studies indicate that price discount information, product touch information, and sale proneness interact to determine consumers' responses. Perceived quality is the underlying mechanism behind the observed effects. For nonsale-prone consumers, product touch information favorably influences responses to large price discounts by addressing product quality concerns and enhancing purchase confidence, but has no effect for regularly priced or low discounted products. For sale-prone consumers, product touch information is not effective in increasing their responses regardless of the discount size. A qualitative study provides support for these results and highlights the role of perceived quality and purchase confidence. The research contributes to behavioral pricing, cue utilization theory, and sensory marketing and suggests that marketing managers should provide consumers with product touch information when implementing high discounts for products for which prepurchase touch is important.     

Plausible versus implausible tensile price claim: Selective accessibility model approach

Retailers frequently use exaggerated price discount advertisements with a tensile price claim (TPC; e.g., “Save up to 70%”) to attract consumers because they expect that once consumers enter a store, they will purchase low‐ or medium‐discounted products. Drawing on the selective accessibility model, this study investigated the way in which an implausibly high maximum level of savings stated in a TPC influences consumers’ expected price discount (EPD) and perceptions of actual price discounts across different types of TPCs (i.e., TPC stating a maximum level and TPC stating a range of savings). This study also investigated two situations in which consumers have previous knowledge of a product’s price discount versus when they have less or no knowledge of the discount. For both conditions, a single‐anchor TPC (i.e., “Save up to Y%”) that stated an implausible maximum level of savings led to a higher EPD and lower perceptions of the deal (i.e., perceived savings, price fairness, and perceived value) with respect to the actual price discount than did a TPC with a plausible maximum level of savings. In contrast, when the TPC stated two anchors (i.e., “Save X–Y%”) and consumers had knowledge of the price discount, their EPDs assimilated only toward the plausible anchor (X), and ignored the implausibly high maximum price discount (Y), resulting in a lower EPD and higher perceptions of the deal of the actual price discounts than a TPC that stated a plausibly high maximum level of savings. In contrast, when consumers had no knowledge of the price discount, their EPDs only adjusted toward the more plausible anchor (X), regardless of whether they perceived the maximum anchor as plausible or implausible. Thus, there was no difference in consumers’ perceptions of “Save X–Y%” between implausibly and plausibly high Y%.     

Factors influencing clothing interest and purchase intention: a study of Generation Y consumers in Malaysia*

The purpose of this study is to examine the factors influencing clothing interest among Generation Y consumers in Malaysia. Brand image, word of mouth (WOM), self-concept, perceived quality, and need for uniqueness were hypothesized to be related with clothing interest, which in turn, was deemed to be related with purchase intention. The interaction effect of price consciousness on the relationship between clothing interest and purchase intention was also examined in this study. Self-administered questionnaires were used to collect data from a total of 300 respondents from Malaysia to test the hypothesized relationships. Results showed that need for uniqueness, self-concept, brand image, WOM, and perceived quality are significant predictors of clothing interest among the Generation Y consumers in Malaysia and price consciousness moderated the relationship between their clothing interests and purchase intention. The practical implications of the research findings were discussed.     

Promotional Framing of Green Products: Mediating Role of Sale Proneness

Abstract

The impact of sales promotion in boosting short-term sales is well established in the literature. While there are ample studies on the impact of sales promotion on conventional products in western countries, there is very scant research on the effect of promotions on green products and almost nonexistence research in emerging economies. This research addresses this gap by doing a comparative assessment of economically equivalent bonus pack sales promotion and price discount sales promotions on green versus non-green products through two experiments designed as a 2 (green product motivation: hedonic vs. utilitarian) × 2 (promotional frame: price discount vs. bonus pack) × 2 (discount level: low vs. high) between-subjects study, and 2 ( product types: green, non-green/control) × 2(promotional frame: price discount, bonus pack) between-subjects study. This research further examines the mediating role of sale proneness in the purchase process. The findings of this research indicate that buyers' preferences for promotion are quite varied for the purchase of green versus non-green products, and the price discount increases sale proneness which exerts a negative impact on product purchase willingness. Accordingly, this study has some theoretical and practical implications.     

How do you feel when you see a list of prices? the interplay among price dispersion,perceived risk and initial trust in Chinese C2C market

The issues of trust fraud, product genuineness and price dispersion jointly make Chinese C2C buyers difficult to identify trustworthy sellers with a low price. Little is known about the generation of initial trust when buyers search products and receive lists of widely ranged prices. This study proposes a theoretical model to explain how price dispersion interacts with other factors in C2C purchase, such as initial trust, perceived risk, perceived value and purchase intention. Product type is considered as a moderator. 261 students were invited in a survey-based experiment. The results from PLS analysis show that price dispersion negatively affects perceived value, whilst, positively affects perceived risk, which further influences perceived value negatively. Price dispersion also negatively influences initial trust through perceived risk. Moreover, the negative effects of price dispersion are stronger when buyers purchase high-touch products.     

Are your consumers variety seekers? The moderating impact on the effectiveness of free gift promotions vs. price discounts

The purpose of this paper is to assess the effect of consumers’ variety-seeking tendency on their preference for monetary versus nonmonetary promotions (i.e. a price discount versus a free gift, respectively) and to identify possible reasons for this preference. A sample population of 150 students was surveyed. The research employed a 2 (discount/free gift)?×?2 (high variety seeking/low variety seeking) between-subjects design. A two-way ANOVA was applied to analyse the effects of the promotion frame and variety seeking on perceived transaction value. The ANOVA revealed a general consumer preference for a free gift over a price discount. This outcome is moderated by the variety-seeking tendency of the consumer; that is, repetitive consumers prefer a price discount, but variety-seeking consumers favour a free gift. This study gives managers insights into the issue of what kind of price promotion is most effective under which circumstances, namely for which type of consumer segment. The practical implications of our findings recommend that if the targeted consumer segment is variety-seeking, a free gift may be optimal, yet if the target segment represents returning customers, a price discount yields better results. If no clear assignment of consumers to either segment is possible, a free gift is the preferred option.     

A comparison of two types of price discounts in shifting consumers' attitudes and purchase intentions

This study focuses on consumer responses to two different types of price discounts: 1) a price discount with and 2) a price discount without a minimum purchase requirement. The effects of the discounts are examined to the extent that they may change consumers' attitudes and purchase intentions regarding a particular brand, by moving it from consumers' hold set to consideration set. A three-phase study on fast-food services in China was conducted. The results of the study provide new empirical insights regarding how to use a brand categorization model to predict the effects of different types of price discounts on consumer purchase behavior. More specifically, this study demonstrates that when a price discount with and without a minimum purchase requirement is applied to a brand in a hold set, the brand moves from the consumers' hold set to the consideration set. However, the effects of the two types of price discounts on consumers' attitudes and purchase intentions are not significantly different. The results are discussed in relation to brand management and marketing strategies in consumer goods industries.     

Regular Price $299; Pre-order Price $199: Price Promotion for a Pre-ordered Product and the Moderating Role of Temporal Orientation

Retailers typically use the strategy of providing a discount to induce the sale of a new product at a pre-order stage. Despite the prevalence of this strategy, providing discounts might not be effective for all consumers. The present research shows that the positive effect of a discount depends on consumer temporal orientation. Results from four experimental studies reveal that a large discount positively affects present-oriented, but not future-oriented, consumers. The findings suggest that perceived financial risk and perceived product quality sequentially mediate the effect of discount size on value toward the deal and purchase intention. A third-party product quality rating boosts quality perceptions, which in turn reduces perceived financial risk and positively enhances value toward the deal along with purchase intention. Our findings demonstrate that when the brand itself acts as a reliable signal of quality, a discount has its intended effect for both present- and future-oriented consumers. Overall, the findings of this research suggest that a retailer can use quality cues along with a discount, especially for a new brand, to appeal to the broadest group, as it will attract both future- and present-oriented consumers.     

The Role of Retailer Trust and Word of Mouth in Buying Organic Foods in an Emerging Market

ABSTRACT

This study has twin objectives. Firstly, it explores the antecedents of retailer’s trust and its effect on organic food purchase intention. Secondly, it explores the relationship between word of mouth and retailers trust and the effect of word of mouth (WOM) in organic food purchase intention in the context of a developing economy. Cluster sampling method combined with judgement was used for survey in India. 541 usable questionnaires were analyzed. Findings indicated that Trust in retailer develops on the basis of perceived food quality, perceived service quality and perceived fairness in price. Perceived fairness in price is more important for building trust followed by perceived service quality. Both trust and WOM lead to purchase intention of organic foods. Among the two predictors of purchase intention, trust in retailer emerged as a bigger explanatory variable as compared to WOM. The current study adds word of mouth as a significant antecedent in developing purchase intention for organic foods along with the role of retailer trust. Implications for managers and researchers are emphasised.     

A meta-analysis of the impact of price presentation on perceived savings

Pricing is one of the most crucial determinants of sales. Besides the actual price, how the price offering is presented to consumers also affects consumer evaluation of the product offering. Many studies focus on “price framing,” i.e., how the offer is communicated to the consumer —is the offered price given along with a reference price, is the reference price plausible, is a price deal communicated in dollar or percentage terms. Other studies focus on “situational effects,” e.g., is the evaluation for a national brand or a private brand, is it within a discount store or a specialty store. In this article, a meta-analysis of 20 published articles in marketing examines the effects of price frames and situations on perceived savings. The results reveal many features that significantly influence perceived savings. For instance, while both the percent of deal and the amount of deal positively influence perceived deal savings, deal percent has more impact. Further, the presence of a regular price as an external reference price enhances the offer value of large plausible deal and implausible deals, but not of small plausible deals. Thus, high value deals should announce the regular price, but not low value deals. Overall, the results have several useful insights for designing promotions.     

The perception of discount sales promotions – A utilitarian and hedonic perspective

This paper explores the effects of utilitarian and hedonic benefits perceptions of discount sales promotions on consumer purchase decisions (attitude and behavioral intention). A closed-ended survey, as well as a partial least squares structural equation modeling of consumers sampling who had used discount sales promotions in their recent purchases, was utilized in this study. The findings suggest that utilitarian benefits perceptions derived from price-quality perception and hedonic benefits perceptions derived from smart shopper self-perception of using discount sales promotions positively affect consumer purchase decisions. Both utilitarian and hedonic benefits perceptions of discount sales promotions can henceforth be used to produce the desired effects on purchase decisions. Hence, this paper sheds light on the effects of utilitarian and hedonic benefits perception of discount sales promotions on purchase decisions. Though the findings are limited to discount sales promotions alone and two types of purchase decisions outcomes (attitude and behavioral intentions), this paper identified multiple avenues to extend its findings. This encourages further exploration of such promotion topics, particularly on the various perceptions of discount sales promotions as well as other sales promotion techniques among marketing academics and practitioners.     

Consideration of an expected future deal in assessing the value of a present deal: Forward-looking bargain shopping

Hunting for bargains has long been an important aspect of shopping behavior. One of the distinctive characteristics of bargain shopping is forward-looking price expectation, where one discount offer is evaluated in relation to another deeper discount anticipated in the future. Two experimental studies examined potentially competing effects of the two discounts over different timing points. Transaction value and purchase intention for the present discount may be affected not only by its discount depth but also by the awareness of the future discount. The negative effect of the future discount could substantially offset the positive perception toward the present deal. On the other hand, the future discount expectation does not appear to lower the perception of acquisition for the present discount. Effects of the future discount were investigated in terms of discount depth, product availability, and discount timing.     

The low effect of perceived risk in the relation between hedonic values and purchase intention

ABSTRACT

This research seeks to identify the influence of perceived risk in the purchase intention environment regarding innovative technological products, and also to understand how brand trust reduces the expected impact of this risk due to the hedonic and utilitarian characteristics influencing purchase intention. Quantitative research was carried out and analysed through structural equation modelling, where the influence of perceived risk on utilitarian value and purchase intention was identified, as well as the influence of brand trust in reducing this risk. The conceptual implications of the study describe as the perceived risk moderates hedonic features less compared to utilitarian features regarding purchase intention, thus demonstrating that emotional relationships are less affected by this risk. The managerial implications suggest that devices with utilitarian characteristics should be more carefully planned according to their brand and complexity, while hedonic products do not require brand trust to guarantee consumers’ purchase intention in the current innovative scenario.     

在线促销限制对消费者购买决策的影响研究——基于精细加工可能性视角

文章基于精细加工可能性理论探究了在线购物情景中不同促销限制类型（时间限制和数量限制）对消费者购买决策行为的影响。通过2（产品涉入度：高vs低）×2（限制类型：限时vs限量）的组间因子实验设计进行了实证研究,结果发现：在线促销情境下,促销限制对消费者购买决策的影响受到消费者产品涉入度的调节。当产品涉入度高时,消费者偏好时间限制促销,购买意向更高,感知控制感起了中介作用。当产品涉入度低时,偏好数量限制促销,购买意向更高,感知稀缺性起了中介作用。文章丰富了促销理论和消费者购买决策理论,同时为商家进行有效的在线促销提供了直接指导。     

The effects of mobile promotions on customer purchase dynamics

While mobile promotions have become increasingly popular in recent years, limited research has examined the effects of mobile promotions over time. This research investigates the effects of two popular types of promotional offers, price discount and non-price free sample coupons, on purchase behavior. To this end, we present a dynamic model of customer purchase behavior that incorporates time-varying effects of mobile coupons, enabling us to investigate both the short-term and longer-term effects of mobile promotions. Using transaction and mobile promotion data, we find that both price discount and free sample coupons increase customers' purchase likelihood and expenditures during the coupon redemption period. We also find that free sample coupons have an enduring effect that increases the purchase propensity beyond the promotion period, thereby contributing to incremental purchases over a longer period of time. We demonstrate how our approach can help marketers improve mobile couponing decisions by considering the dynamic effects of mobile promotions that manifest over time.