Effects of discount framing in comparative price advertising

Abstract

PurposeThe objective of this paper is to examine the framing effects of discount presentation format in comparative price advertising in a low‐price and a high‐price product context. In particular, the authors study whether identical discounts presented in percentage and absolute terms result in different consumer perceptions of transaction value and purchase intention. Although price promotions have been the subject of previous research, a closer examination of the potential moderating influence of discount size in both contexts is warranted.Design/methodology/approachTwo separate experiments were designed to isolate the effects of the manner in which discounts are numerically expressed and the size of the discount on consumers' perceptions of a retail price promotion in a low‐price and a high‐price product context.FindingsThe effects of discount framing in comparative price promotions are found to be influenced by discount size in the case of the low‐product context but not the high‐price one.Research limitations/implicationsIt is recommended that the study be replicated for other types of low‐price and high‐price products to confirm the generalisability of the results for each product context.Practical implicationsRetail managers' choice of discount presentation format for both low‐ and high‐price product contexts, and in the case of the former the additional manipulation of discount size, have an impact on the ability of comparative price promotions to accelerate purchases. Meanwhile policy makers should continue to assign significant time and resources to investigating concerns about misleading price comparison based promotions.Originality/valueThe paper provides original insights into the importance of considering the joint effects of discount presentation format and discount size on consumers' perceptual and behavioural responses to retail price promotions, unlike previous research, which has examined these framing effects separately.