Abstract
<h3>ABSTRACT</h3> Although various types of price promotion are used to increase sales, they negatively may affect consumers9 perceptions of a premium-product brand. The authors of this study believe their work advances the limited research in this area by distinguishing between direct- versus indirect-price reduction and marketers9 use of a “precondition”—<i>i.e.,</i> promotions offering free gifts, trade-in incentives, or loyalty-program benefits. Results of this two-part study, which combined sales data of German premium automobile brands with consumer-behavior analysis, showed that direct-price reduction had the strongest positive sales impact. Brand perception was least deteriorated by both direct-price reduction without a precondition—and indirect-price reduction with a precondition.
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