Consumer perceptions of extra free product promotions and discounts: the moderating role of perceived performance risk

Abstract

Purpose – The purpose of this paper is to examine how perceived performance risk moderates consumers' evaluations of different types of promotions, including extra free product promotions (e.g. buy‐one‐get‐one‐free deals or BOGOFs) and price discounts (e.g. 50 per cent off). Some evidence shows that consumers prefer extra free products to discounts because of mental accounting, and the way that these different types of promotions are framed. This research explores a new moderating link in the consumer behaviour literature by showing that perceived performance risk, through its effect on a consumer's tendency to stockpile, moderates consumers' evaluations of extra free product promotions and price discounts.Design/methodology/approach – This research uses a cross‐sectional experiment to manipulate perceived performance risk, type of promotion and promotion size, and measures consumers' value perceptions and purchase intentions. The experimental method provides greater internal validity and addresses calls ...