How promotional frames affect upgrade intentions

Abstract

This article explores how sales package frames (bundle vs. free gift) influence consumers’ cost assignments of target items (focal vs. supplementary) in durable product categories. The frames may influence consumers’ upgrade intentions and decisions as a result of their different perceptions of psychological costs. In two experiments, participants in the free gift frame assigned more (fewer) costs to the focal (supplementary) product than did those in the bundle condition; those in the free gift condition also perceived higher (lesser) residual value and were less (more) likely upgrade to focal (supplementary) items than people in the bundle condition. Moreover, the framing effect of sales packages on upgrade intentions was moderated by the promotional format (price discount vs. trade-in) at the time of the upgrade decision. The effect of the sales package frames on upgrade intentions became more pronounced when the temporal separation was short and usage frequency was low. These findings have significant implications for both theoretical developments and marketing practice.