Abstract

Purpose – this paper aims to examine the effect of framing price promotion on consumers’ purchase intentions. The main purpose of this paper is to analyse the impact of percentage and monetary price discount frames, discount levels of 20%, 40%, 60% and 80% on customer behavioural intention and perception within a high-end hospitality industry context. Research methodology – this study considers 8 manipulated sample scenarios that have been developed. In summary, the experiment consisted of 2×4 designs of the high-end hospitality industry. Two independent variables were included in the experiment: two discount formats (€-off, %-off) and four discount levels to instigate the impact it has on the behavioural intentions and perceptions. Findings – research has proved that in the high-end hospitality industry, different price discount frames and levels have a significant impact on customer behavioural intentions and perceptions. Research limitations – the results of this study show that the threshold for the discount rate may depend on the type of hotel. Therefore, in the future, the impact of a discount on several hotels of different levels should be assessed in one study. Practical implications – the practical implication for service firms that want to use price discount promotions to encourage sales and increase revenue is that they should carefully consider the price range and the value or quality of image they intend to signal when using these different price discount frames and the service they are selling to determine the discount level to use. Originality/Value – this paper is valuable to high-end service marketers that seek to use price discount promotions to encourage sales and increase revenue.

Highlights

  • Nowadays customers use the Internet to find all the information about the product or service they are interested in purchasing

  • The main aim of the research was to estimate if various discount sizes and frames generate differences in consumer perception of value, quality and purchase intentions

  • Purchase intention depending on discount sizes and discount frames

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Summary

Introduction

Nowadays customers use the Internet to find all the information about the product or service they are interested in purchasing. Customers are able to compare different companies and to analyse their price range, production facilities, used materials, etc. As a result of the increased awareness, customers have become very price sensitive (Nusair, Yoon, Naipaul, & Parsa, 2010). The goal of this article is to investigate the joint effects of price discount frames and price discount levels on customer purchase intention, the perception of quality and value of saving in the high-end hospitality industry. The factorial experimental 2×4 design (two discount formats (€-off, %-off) and four discount levels (20, 40, 60, 80%)) were applied to instigate the impact of a price discount on the behavioural intentions and perceptions

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