Cross-cultural examination of the effects of promotional framing on consumers’ responses: A comparison of China and Pakistan

Although extensive studies have focused on the impact of different types of sales promotions on consumers’ responses, few studies examined the effects of online sales promotional framing on consumers’ responses from cross-cultural perspective. Therefore, this study explored how cross-cultural differences moderated the effects of buy one get one free and buy two get fifty percent off promotion on consumer responses across China (lower uncertainty avoidance) and Pakistan (higher uncertainty avoidance). Based on the promotional framing effect theory, an empirical investigation across these two countries revealed that people with higher uncertainty avoidance (vs. lower uncertainty avoidance) prefer buy one get one free to buy two get fifty percent off promotion. Buy one get one free will lead to higher consumer perceived quality and purchase intention than buy two get fifty percent off promotion in both Pakistan and China, while the impact of buy one get one free and buy two get fifty percent off on perceived risk, perceived quality, perceived value and purchase intention are significantly larger in Pakistan than in China. In addition, the study verified the negative perceived risk-perceived value link, positive perceived quality-perceived value link and positive perceived value-purchase intention link from cross-cultural investigated data. The study provides new insights into the effects of online sales promotions on consumers’ responses considering cultural differences. Our findings have implications for multinational corporate managers to design appropriate online sales promotions strategies.     

Feeling lucky: How framing the target product as a free gift enhances purchase intention

The present research investigates how consumers respond to alternate premium promotion framings that have equal value (e.g., “buy a flash drive and get a free earphone” vs. “buy an earphone and get a free flash drive”). We show that the counterintuitive framing of the target (vs. non-target) product as a free gift makes consumers feel lucky, which in turn increases their purchase intention for the product bundle. We further show the effects of two moderators—salience of targeting and promotion magnitude, such that the main effect is mitigated when the marketer’s targeting efforts are salient for consumers and when the target product is price discounted but not free. Four studies (i.e., a lab study, two online experiments, and a field experiment involving actual purchases of the promoted products) for a range of products and services across two countries provide converging evidence supporting the hypotheses. The findings contribute to the literatures on bundle framing effects, pricing, and luck research in marketing, and have practical implications on designing more effective promotions for both online and brick-and-mortar retailers.     

“Retail is detail! Give consumers a gift rather than a bundle”: Promotion framing and consumer product returns

Retailers often use the promotion strategy of offering supplementary products (e.g., free gift, bundle) to attract consumers and increase sales. Despite the growing literature on the promotions that are differently framed but offer economically identical values, little research has examined the link between promotion framing and consumer product returns. The current article sheds light on this relationship, hypothesizing that a free gift promotion would be superior to a bundle promotion in reducing consumer product returns. The findings suggest that a gift‐framed promotion leads to a lower product return intention than an economically equivalent bundle promotion, because consumers tend to perceive more loss from giving up the gift‐framed (vs. bundle‐framed) deal. Further, this study examines a moderating role of brand familiarity (familiar vs. unfamiliar) and shows that the merits of free gift framing on product return intention via perceived loss are amplified (attenuated) when the promoted brand is familiar (unfamiliar). Overall, the investigations of this study imply that it is better to frame a promotion as a “free gift” than a “bundle” to increase perceived loss in returning the purchase and thus to decrease consumer product returns. This strategic intervention works especially when the gift is offered by familiar brands.     

Consumer responses to the depth and minimum claimed savings of “Scratch and Save (SAS)” promotions

This study examines consumers' responses to advertisements employing “Scratch and Save” (SAS) type promotions, which are emerging store‐level promotional tools. Due to SAS promotions' “gambling” characteristics, they offer the possibility of high savings levels, however, they also confront the consumer with uncertainty about the value of the discount at the point of purchase. Particular attention is paid to the depth of the claimed savings, and its effect on regular price believability and consumers' expected savings, as well as perceived value and shopping intentions. The depth of the advertised SAS promotions was observed to not affect consumer believability of the regular price in SAS advertisements. In addition, the disjunction effect is made applicable through showing that the minimum claimed saving information enhances the level of savings expectation. The results also report the positive impact of expected savings on offer value and, in turn, shopping intentions. © 2010 Wiley Periodicals, Inc.     

Deal‐prone consumers' response to promotion: The effects of relative and absolute promotion value

Increased use of promotions that target different market segments makes the study of consumer characteristics associated with the response to promotions more noteworthy. This article assesses the effect of a common segmentation criterion, consumer deal proneness, on consumers' responses to promotions of more and less relative and absolute value. The results of a pair of experiments indicate that deal‐prone consumers are sensitive to the value of a promotion relative to other available promotions only in a condition of high absolute dollar savings. The findings help integrate conflicting views of deal proneness into a framework in which deal proneness serves as a heuristic to limit or heighten processing of promotion‐related information depending on the promotion environment. © 2005 Wiley Periodicals, Inc.     

A product-centric data mining algorithm for targeted promotions

Targeted promotions in retail are becoming increasingly popular, particularly in UK grocery retail sector, where competition is stiff and consumers remain price sensitive. Given this, a targeted promotion algorithm is proposed to enhance the effectiveness of promotions by retailers. The algorithm leverages a mathematical model for optimising items to target and fuzzy c-means clustering for finding the best customers to target. Tests using simulations with real life consumer scanner panel data from the UK grocery retailer sector show that the algorithm performs well in finding the best items and customers to target whilst eliminating “false positives” (targeting customers who do not buy a product) and reducing “false negatives” (not targeting customers who could buy a product). The algorithm also shows better performance when compared to a similar published framework, particularly in handling “false positives” and “false negatives”. The paper concludes by discussing managerial and research implications, and highlights applications of the model to other fields.     

Effects of pricing and promotion on consumer perceptions: it depends on how you frame it

This research examined the extent to which different promotional frames increased perceptions of deal value. Price discounts dominate the sales promotions employed by marketers. The framing literature suggests discounts have robust positive effects on consumer perceptions of deal value. However, the current research showed that negative quality inferences moderated discount framing effects and undermined deal value, particularly when no assurance of product quality was provided. Every-day-low-price offers were also vulnerable to negative quality inferences, while free gift frames maintained quality perceptions and increased deal value. Product trial acted to further magnify promotional framing effects, according to a confirmation bias. These findings were consistent with an attribute framing mechanism.     

Effects of sales promotion type and promotion depth on consumer perceptions: the moderating role of retailer reputation

This study uses a between-subjects experimental design to test the effect of two sales promotion formats (coupon versus markdown) with either high and low face values on consumer attitudes toward the deal, perceived product quality, and purchase intentions. The reputation of the retailer offering the deal is predicted to moderate the relationship between the promotional offer and consumer responses. Consumers perceive product quality to be higher when offered a high value coupon vs. markdown but there is no significant difference in perceived quality across promotion types when the promotion face value is low. When a deep price discount is offered by a retailer with a negative reputation, however, consumers have more favorable attitudes toward the deal and higher purchase intentions when provided with a markdown vs. coupon. Conversely, a high value coupon elicits more favorable evaluations than a markdown when the retailer has a positive reputation. When the value of the promotion is low and the retailer has a positive reputation, consumers have more positive deal attitudes and purchase intentions when offered a markdown vs. coupon. There is no significant difference in the effects of promotion type when the retailer has a negative reputation. The findings therefore establish retailer reputation as an important moderator of sales promotions effectiveness. This research is limited by the use of a single product category and a student sample. Process measures are also needed to validate the proposed theoretical conceptualization. The results provide managers insight into the type and value of the sales promotion to offer based on consumer perceptions of the retailer's reputation in the market.     

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 effectiveness of number of deals purchased in influencing consumers' response to daily deal promotions: A cue utilization approach

This research proposes and empirically tests a theoretical model of consumers' response to online daily deal promotions. A unique feature of such promotions is their social influence, as they provide information about how many others have already purchased the offer. Integrating cue utilization and social influence theories, the model outlines how the social cue about the number of deals purchased by others influences consumers' deal evaluations and purchase intentions across a variety of conditions. The research findings indicate that the number of deals as an extrinsic cue affects consumers' deal evaluations and intentions only when intrinsic product and deal cues (good vs. service, discount size) and consumer personal characteristics (familiarity with the provider) are not present or are insufficient to infer deal attractiveness. The research offers managerial implications with respect to effectively designing and promoting online daily deals.     

Feeling happier when paying more: Dysfunctional counterfactual thinking in consumer affect

In this research the authors examine whether counterfactual thinking, the process of imagining alternatives to reality, can have a detrimental impact on consumers' feelings. Five studies examine the dysfunctional role of counterfactual thinking in the presence of Minimum Purchase Requirement conditional message framing (“X% off all purchases if you spend at least $Y”), and its affective consequences. Results show that the presence or absence of the minimum amount restriction (Studies 1A and 1B), success or failure to meet the restriction (Studies 2A and 2B), and perceived closeness (i.e., outcome proximity) to success or failure in meeting the restriction (Study 3), drastically influence consumer affect to the extent that participants receiving an inferior deal exhibited higher satisfaction than those receiving a superior deal. It is suggested that such promotion‐induced counterfactual thinking polarizes consumer satisfaction, which may impede consumers from arriving at optimal conclusions. © 2010 Wiley Periodicals, Inc.     

Consumer heterogeneity in the longer-term effects of price promotions

While a significant literature has emerged recently on the longer-term effects of price promotions, as inferred from persistence models, there is very little if any attention paid to whether such longer-term effects vary across different types of consumers. This paper takes a first step in that direction by exploring whether the adjustment, permanent, and total effects of price promotions, and the duration of the adjustment period, differ between consumers segmented based on their usage rates in a product category and their loyalty to a brand. We also investigate whether such consumer segmentation will improve the forecasting performance of persistence models at both product category and brand levels. Expectations are developed based on consumer behavior theory on various effects of price promotions, such as the post-deal trough, the mere purchase effect, the promotion usage effect, and responsiveness to competitor's reactions. Evidence from household-level supermarket scanner data on four product categories is provided. We find substantial differences between consumer segments and provide insights on how managers can increase the longer-term effectiveness of price promotions by targeting each consumer segment with a different promotion program. In addition, consumer segmentation is found to significantly improve the forecasting performance of the persistence model for two of the four product categories. For the other two product categories, consumer segmentation provides forecasting performance similar to that obtained from aggregate-level persistence models.     

Impact of sales Promotion's benefits on perceived value: Does product category moderate the results?

The purpose behind the development of this research article is to assess the impact of sales promotions benefits on consumer perceived value and examine the moderating effect of product categories on the relation between sales promotions, their benefits, and consumer perceived value. The study used a sample of 400 consumers from India and ‘Structure Equation Modelling’ technique is applied to evaluate the research assumption. Finally, the moderating effect of the product category is evaluated by utilizing ‘Multi-Group Analysis' technique. Research findings reveal that the product category moderates the consumer's perceived value for hedonic and utilitarian benefits of sales promotion tools. It is found that utilitarian benefits of sales promotion have more impact on consumer perceived value in the context of personal care product while hedonic benefits are having more impact on consumer perceived value in the context of food products. A sales promotion plan can be made more effective when it is hedonic benefit oriented in the case of food products and utilitarian benefit oriented in the case of personal care products. The findings of this research can be useful for marketers to develop an effective sales promotion strategy considering the category wise differential impact of sales promotions benefits.     

The long‐term effects of sales promotions on brand attitude across monetary and non‐monetary promotions

This study compares the influence of sales promotions on brand attitude across promotion types over time. An experiment is conducted with 154 subjects, who are exposed to test materials for 12 weeks. Evidence shows that the long‐term effects of sales promotions on brand attitude vary across deal types. Non‐monetary promotions seem to work better in eliciting consumers' favorable brand attitude than monetary promotions over time. However, such effects are moderated by consumers' deal proneness. Although monetary promotions may induce more negative effects than non‐monetary promotions, these effects are weaker for high deal‐prone consumers than for low deal‐prone consumers. © 2011 Wiley Periodicals, Inc.     

The existence and perception of redundancy in consumer information environments

Two studies are reported which examine the existence of attribute redundancy as well as consumers' ability to perceive attribute redundancy in consumer information environments. The results of the first study suggest that attribute redundancy varies widely from product category to product category. The results of the second study suggest that consumers' ability to perceive attribute relationships improves with product knowledge. Unexpected was an observed U-shaped relationship between consumers' perceptions of attribute redundancy and attribute knowledge. Together the results suggest a number of policy implications regarding the value of consumer information programs.     

The Dilemma of Pull and Push-Price Promotions

Should manufacturers of products such as automobiles and household appliances offer cash rebates to all consumers at the time of purchase, or offer trade deals to retailers? The authors conduct an analytical inquiry that shows that choosing between these two types of price promotion critically depends on the consumer sensitivity to both regular and promotional prices. More specifically, when consumers are more (less) sensitive to promotions than to regular prices, manufacturers are better (worse) off offering trade deals (consumer rebates) rather than consumer rebates (trade deals). Consistent with traditional predictions found in the economic literature, either of the two promotions can be offered indiscriminately if consumers make no difference between promotional offers and regular-price reductions. The theoretical and managerial implications of these findings are discussed.     

To donate or not to donate? Product characteristics and framing effects of cause‐related marketing on consumer purchase behavior

The present study examines potential influences associated with donation framing, product price, product type, and donation magnitude on cause‐related marketing (CRM) campaigns, where money is donated to a charity each time a consumer makes a pur‐chase. In addition to the main effects of the aforementioned factors, experimental results indicate that beneficial effects of product type (i.e., frivolous products bundled with a cause are more effective than practical ones) occur when donation information is framed in absolute dollar terms. The effects of donation framing are found insignificant when the donation magnitude is high. Influences of donation magnitude on CRM effectiveness are limited in high‐priced items. When the donation magnitude is constant, a donation amount framed in absolute dollar value is more effective than that in percentage terms for low‐priced products, and the opposite is true for high‐priced items. In practice, marketers thus stand to gain not only by matching the donation magnitude in their advertised products with the right price but also by an appropriate “framing” of the offered bundles. © 2008 Wiley Periodicals, Inc.     

Ethical Consumerism: A View From the Food Industry in Morocco

Both consumers and firms are now more concerned about ethics as a way to make business transactions a win–win deal. As consumers ensure profitability to businesses, they expect fair practices and honest behaviors toward society. The study reported here attempts to investigate Moroccans’ perceptions and attitudes toward ethical consumerism of food. Consumers’ willingness to buy those products and their motives for such purchases as well as factors preventing ethical purchases is investigated. Besides price, which drives most their decision to buy a food or not, Moroccans are driven by ethical claims such as “healthy,” “no fat,” “pasteurized,” etc. It was shown that consumers trust information on the labels of products besides information provided by consumer authorities. In relation to ethical aspects, Moroccans are mostly concerned about the environment and religion. Older men with high income are shown to be a good target for the ethical food market.     

Does manufacturer advertising suppress or stimulate retail price promotions? Analytical model and empirical analysis

Does manufacturer advertising for a brand stimulate or suppress retail price promotions? This study addresses this controversial issue. The authors develop an analytical model that shows that the relationship between manufacturer advertising and retail price promotion depends on the role of advertising. If advertising differentiates brands and suppresses consumer response to retail promotion, then the relationship is negative. But, if advertising is informative enough to increase consumer response to retail promotions, then the relationship is positive. A follow-up empirical analysis shows a strong positive relationship between category advertising expenditure and size of retail price discount, and between advertising and discount frequency. The finding supports the informative role of advertising in the context of retail price promotions. The implications of these findings and directions for future research are discussed.     

Higher quality or lower price? How value-increasing promotions affect retailer reputation via perceived value

Marketers often attempt to increase consumers' perceptions of value by raising the quality or reducing the price of products. Five studies demonstrate that consumers are generally more sensitive to lower-price promotions than to higher-quality promotions as they form their perceptions of retailer reputation (Study 1), that the perceived value mediates this effect (Study 2), that store image (prestigious vs. thrifty) moderates the effect (Study 3), and that perceived price level (Study 4) and quality level (Study 5) independently drive the moderating effect of store image.