A study of time limited price promotions

Abstract

PurposeThis paper seeks to provide a detailed study of the impact of offers incorporating a time‐limit restriction on consumers in the context of price promotions. Time limited offers are those where a pricing offer is only available for a specified, normally relatively short, period of time. Although price promotions have been the subject of much previous research, a detailed study of the effects of time limit restrictions on consumer behavior is warranted.Design/methodology/approachThe study incorporates an experimental approach whereby the impact of time‐limited and non time‐limited offers on consumers' assessments of value and search and purchase intentions are isolated.FindingsFindings show that the presence of a time limit does not impact directly on perceptions of value or search and purchase behavior. A marginally significant interaction effect between time limit and discount size is present, impacting in particular on search behavior.Research limitations/implicationsThe research was carried out in the context of a consumer durable good (TV) and it is recommended that the study is replicated in other contexts, such as services and packaged goods, to ensure that the results reported here are generalisable.Practical implicationsThe results suggest that policy makers should not assign significant time and resources to investigating influences of alleged false time limit promotion, as the findings would lead to the conclusion that such resources would be better used controlling other forms of misleading advertising and promotion. Marketing managers should note that time limited offers have no significant impact on consumer perceptions or purchase intentions.Originality/valueThe paper is of value to both the policy making community and practitioners and provides important and original insights into the minimal impact of time limit restrictions on consumers' evaluation of price promotion offers and subsequent behavioral intentions.