Effects Of Price Promotions Research Articles

Using Price Promotions to Drive Children's Healthy Choices in a Developing Economy

This research examines how price discounts—a classic marketing incentive—drive children's healthy choices in the understudied context of a developing economy. The authors partnered with UNICEF to launch three field experiments in Panamá among 2,418 children to examine four pillars of price discount promotions for children: what to discount (product selection), how to discount (message design), whom to target (children's age), and whether to discount again (repetition). They uncovered four previously undocumented insights. First, price discounts alone effectively increase demand among children 6–11 years of age, reconciling conflicting findings in prior literature. Second, product selection based on relative price—a particularly crucial factor in developing regions—drives opposing postpromotion effects: ironically, marketers should not discount expensive healthy options but rather moderately priced ones. Third, different from prior literature's practice of directly communicating final prices, discount messages that require older children to derive final prices are more effective. Fourth, repetition can amplify or undermine discounts’ efficacy depending on message complexity and children's age. This research offers concrete guidelines for researchers and practitioners, uncovering both positive and negative effects of price promotions on children, and shedding light on price promotion interventions that most powerfully nudge children of different ages to act.

Consumers’ behavioural responses to price promotions of organic products: an introspective pre-study and an online field experiment

PurposeWhile most marketing research on organic products refers to the premium price levels of organic products, little research exists on consumers’ behavioural responses to price promotions or discounts of organic products. The present study aims to fill this research gap.Design/methodology/approachTo develop alternative hypotheses about consumers’ behavioural responses to price promotions of organic fast-moving consumer good (FMCG) products, the authors used the researcher-introspection method in a pre-study. To test the hypotheses developed based on the pre-study, the authors conducted a field experiment on online advertising of an FMCG sold in drugstores. In the field experiment, the authors exposed consumers to an online ad featuring either a price promotion (−20%) or the regular price of the product. The ads also varied in terms of whether they contained explicit organic claims or not, and whether they included implicit organic cues or not.FindingsThe price promotion increased the clickthrough rate of the ad both when combined with an explicit organic claim and when combined with the implicit cue of green product pack. The results suggest that consumers do not have significant suspicions about price promotions of organic products, but rather presume that the price promotion of an organic FMCG product is a periodical promotional action, similar to the price promotions for conventional, non-organic products. Also, consumers seem to assume that the regular prices of organic FMCG products are so high that the retailer/manufacturer can well afford periodic price discounts.Research limitations/implicationsThe present research shifts the focus of organic marketing research from the premium price levels to the effectiveness of price promotions and discounts. Further, the present results contrast with certain earlier studies that have questioned the effectiveness of price promotions for organic products.Practical implicationsThe results have different implications for marketing managers of brands not yet providing organic product versions in the market, of brands producing non-organic products, which cannot easily be rendered organic, and of brands offering organic products in the market.Originality/valueThis is, to the best of the authors’ knowledge, the first empirical study and field experiment on price promotions of organic products, including explicit organic claims.

Spatial transmission of price promotion for German beer retailers

ABSTRACT The existing literature has extensively discussed the role of retail promotions, while the spatial effects of promotions are poorly understood. Using panel data of weekly promotional prices from German beer retailers during the period 2000–12, we examine the spatial effects of promotions based on spatial panel estimations. Results show significantly positive spatial effects of beer price promotions, indicating that neighbouring retailers’ promotions boost each other. We further find significant heterogeneity of spatial effects of price promotions across market power, peak demand and consumer loyalty. In addition, the positive spatial effects of price promotions are largely from retailers’ retaliation to competitors’ promotions.

Unintended effects of price promotions: Forgoing competitors’ price promotions strengthens incumbent brand loyalty

Unintended effects of price promotions: Forgoing competitors’ price promotions strengthens incumbent brand loyalty

Effect of Price Promotion and Quality Service On Loyalty Customers At PT. Media Antar Nusa (Nusanet) Medan

Effect of Price Promotion and Quality Service On Loyalty Customers At PT. Media Antar Nusa (Nusanet) Medan

The Effectiveness of Price Promotions in Purchasing Affordable Luxury Products: An Event-Related Potential Study.

Similar to traditional luxuries, affordable luxuries enjoy a high level of perceived product quality and perceived social status, but the effectiveness of price promotions of purchasing affordable luxury products is different from that of traditional luxuries. In order to further investigate the purchases of affordable luxuries, we used event-related potential (ERP) technology to reveal the formation of the purchase intention toward affordable luxuries at original prices (high or low) and current prices (discounted or non-discounted). Compared with the high-priced affordable luxury without a price promotion and the low-priced affordable luxury with a price promotion, consumers showed a stronger intention toward the high-priced affordable luxury with a price promotion, by weighing up three factors, perceived product quality, perceived social status, and perceived monetary saving at the behavioral level. A shorter reaction time emerged in the price promotion condition than in the absent price promotion condition when the original price was low. At the neural level, a decrease in N2 amplitude was found in the high original price and discounted current price condition than the high original price and non-discounted current price condition and the low original price and discounted current price condition, respectively, suggesting that the price information of the latter two conditions might not be the expectation information of subjects, and thus, the enhanced conflict is produced. The high-priced affordable luxury product without a price discount evoked a more positive LPP amplitude than the high-priced affordable luxury product with price promotions or than the low-priced affordable luxury item without price promotions, demonstrating that participants could regard the former as an evaluative inconsistent condition and the latter as evaluative consistent conditions. These results are helpful to better understand the effects of price promotions on purchasing affordable luxury products at different original prices.

Price promotion of organic foods and consumer demand

AbstractExisting studies have examined the demand elasticities for organic products only in select categories, and their results for consumers' sensitivity to price changes are inconsistent. Evidence regarding the effects of price promotions on the demand for organic foods vs non-organic foods is scarce. This study aims to (1) examine the own-price elasticities of organic foods vs non-organic counterparts both with and without a promotion in a variety of product categories, and (2) investigate how the distinctive promotion effects between organic and non-organic counterparts depend on food category features. Using purchase data for 36 food categories from the 2015 Nielsen Consumer Panel, we find differential own-price elasticities for organic and non-organic foods, regardless of whether the product is purchased with a promotion. When the products are purchased with a promotion, we find stronger price promotion effects of organic virtues than non-organic virtues and weaker price promotion effects of organic vices than conventional vices. Price promotions of organic foods are more likely to induce health-conscious consumers to switch from conventional purchases to organic purchases in virtues.

The Role of Price Promotion and Product Quality in Influencing the Intention to Repurchase Cok-Kis Cookies

Repurchase intention is crucial to the continuity of businesses especially snack businesses. Customer satisfaction is one of the dominant variables influencing repurchase intention. This purpose of this study was to determine the role of price promotion and product quality in affecting customer satisfaction, which in turn influences the repurchase intention of snack products. The sample consisted of 117 people (a minimum sample of 91 was calculated using the Yamane and Isaac and Michael formulas). A questionnaire was given to the participants and data were analyzed quantitatively using SmartPLS version 3.0 (Partial Least Square). The results showed that customer satisfaction had a significant influence on the repurchase interest of Cok-Kis customers. Price promotion and product quality had a significant effect on Cok-Kis customer satisfaction. Customer satisfaction could mediate the effect of price promotion and product quality on the repurchase interest of Cok-Kis customers.
 Keywords: price promotion, product quality, customer satisfaction, repurchase intention

Do Promotions Make Consumers More Generous? The Impact of Price Promotions on Consumers’ Donation Behavior

Despite growing concerns regarding the increasing consumerism related to promotions, this research documents a positive effect of price promotions on consumers’ donation behavior. Specifically, the authors propose that price promotions increase consumers’ perceived resources, which in turn increase consumers’ donation behavior. A series of seven studies, combining field and experimental data, provide converging support for this proposition and its underlying mechanism of perceived resources. Furthermore, the authors show that the positive effect of price promotions on consumers’ donation behavior is attenuated when consumers focus on the amount of money spent (rather than saved), when consumers feel they have overspent their budget, and when the monetary savings cannot be realized immediately. Finally, the authors show that this effect is stronger when donation solicitation occurs immediately after the price promotion (vs. after a delay). This research documents a novel behavioral consequence of price promotions and uncovers a mechanism by which price promotions can lead to positive social consequences and contribute to a better world.

Duration of price promotion and product profit: An in-depth study based on point-of-sale data

Anecdotal evidence has shown that retail price promotions can help small and medium-sized retailers enhance their sales, and thus profits. However, most marketing managers usually stop a promotion after a certain duration. This study aims to explain why these retailers discontinue their price promotion. Our approach posits that overall contributions of a price promotion to the product profit progressively diminish with time. In this study, we present a theoretical framework to explain the relationship between duration and profit effects of price promotion and propose statistical models to empirically examine this framework using point-of-sale (POS) data. Our findings provide empirical support that the effect of price promotion on the product profit has a downward trend with elapsed time. The results are helpful for marketers to understand how price promotions dynamically influence product profit and when the promotion should be terminated.

Does Price Promotion Hurt Products’ Perceived Quality? The Role of Attribute Alignability

Purpose: Previous literature shows that a price promotion serves as a negative cue of product quality especially when consumers have no additional information about the product's other attributes. In this research, we explore how the effect of price promotions on consumers' perceptions of product quality changes depending on their ability to compare promoted product attributes with competitive products' attributes. Research design, data and methodology: Specifically, we use a series of scenario-based lab experiments using different types of products and explore if attribute alignability among competing products in a consumer's choice set influences consumers' ability to compare the product attributes and perceived quality. Results: Our study findings show that high attribute alignability among products makes consumers easier to compare the product attributes and thereby focus more on non-price information than price information. We also show that attribute alignability serves as a moderator and decreases perceived quality when the promotion level is higher. Therefore, the attribute alignability weakens the negative impact of a price promotion on consumers' perceived product quality. Conclusions: Our study findings provide new insights on how to implement price promotion strategies while keeping products' perceived quality, by considering the product's relationships with competing products in a choice set.

Cross-channel spillover effect of price promotion in fashion

PurposeThe purpose of this study was to investigate whether consumers differ in their online or offline purchase intention, depending on which channel with price promotion information they are first exposed to, and to analyse the moderating role of brand trust.Design/methodology/approachOverall, 174 responses were obtained via an online survey using two contact channels (online/offline) by two levels of brand trust (high/low) between-subject designs.FindingsSpillover effects were found across channels when a consistent price promotion is executed in both online and offline channels, purchase intentions for cross-channel and contact channel increase simultaneously. Although there was a similar effect in the discrepancy of purchase intentions towards the cross-channel according to contact channels, it varied depending on brand trust. When brand trust is high, having contact with offline price-discount information has a large online spillover effect. When brand trust is low, the spillover effect from online to offline is large.Research limitations/implicationsThis study expands the multi-channel research by proving the spillover effects between channels and confirming the difference according to brand trust.Practical implicationsIncreasing promotion information for online contact is effective in driving offline visits for new brands, and the effective use of promotion information at offline stores can have a positive impact on online channels for well-known brands.Originality/valueThis study explores the cross-channel spillover effect of price promotion and proves that these effects depend on brand trust.

The Long-term and Spillover Effects of Price Promotions on Retailing Platforms: Evidence from a Large Randomized Experiment on Alibaba

Dynamic pricing through price promotions has been widely used by online retailers. We study how a promotion strategy, one that offers customers a discount for products in their shopping cart, affects customer behavior in the short and long term on a retailing platform. We conduct a randomized field experiment involving more than 100 million customers and 11,000 retailers with Alibaba Group, one of the world’s largest retailing platform. We randomly assign eligible customers to either receive promotions for products in their shopping cart (treatment group) or not receive promotions (control group). In the short term, our promotion program doubles the sales of promoted products on the day of promotion. In the long term, we causally document unintended consequences of this promotion program during the month after our treatment period. On the positive side, it boosts customer engagement, increasing the daily number of products that customers view and their purchase incidence on the platform. On the negative side, it intensifies strategic customer behavior in the posttreatment period in two ways: (1) by increasing the proportion of products that customers add to their shopping cart conditional on viewing them, possibly because of their intention to get more shopping cart promotions, and (2) by decreasing the price that customers subsequently pay for a product, possibly because of their strategic search for lower prices. Importantly, these long-term effects of price promotions on consumer engagement and strategic behavior spill over to sellers who did not previously offer promotions to customers. Finally, we examine heterogeneous treatment effects across promotion, seller, and consumer characteristics. These findings have important implications for platforms and retailers. This paper was accepted by Vishal Gaur, operations management.

The preservation of loyalty halo effects: An investigation of the post-product-recall behavior of loyal customers

This study examines the post-product-recall behaviors of previously loyal customers. Specifically, the study examines whether they stay with a product or leave it, and if they do stay, then how long they delay resumption of their regular purchase cycle. The investigation examines three types of influences on post-recall behavior: first, the behavioral characteristics of customers, including their levels of product loyalty and their strength of shopping habits; second, the use of post-recall promotions and loyal customers’ promotion sensitivity; and third, the recall characteristics, including its seriousness and its public announcement. Using 20,342 point-of-sale grocery scanner transactions by 1919 rewards card members, we found that loyal customers tended to stay with affected products while delaying repurchases of these products. Customers with strong shopping habits may leave the product but do not delay repurchases if they stay. The findings also suggest the differential effects of price promotions and non-price promotions on repurchase behaviors.

Price Promotions and Online Product Evaluations

Price promotions increase sales, at least in the short term, but the effect of price promotions on consumers’ product evaluations is not well understood. We focus on the market for mobile apps, a category where price variation, including discounting to a zero price is common. We ask how price promotions affect the evaluations measured by star ratings posted subsequently online. Our results suggest that during price promotions, consumers evaluate the product less favorably than before the price promotions. This effect is especially pronounced for price promotions to a zero price. We provide evidence suggesting that lower prices, and especially zero prices, increase the likelihood that consumers with lower valuations will purchase the product. Notwithstanding the lower promoted price, the app still represents a bad fit to these consumers' tastes. As a result of the mismatch between a consumer's taste and product characteristics, consumers who purchased the app during a promotion rate it less favorably.

The effect of price promotions on impulse buying: the mediating role of service innovation in fast moving consumer goods

With the global economic integration, the development of international activities reduce trade barriers in the exchange between countries, and the intensification of competition. Knowledge of customer preferences and encouraging them to buy has become vital for the survival and development of enterprises (specify consumer goods or fast rotation). FMCGS, the aim of this study is to explain the impact of price promotions on the process of immediate buying in goods of Isfahan that based on an infinite population, the sample is 384 people. The statistical society was customers of Hyper Star store. In order to collect data, a questionnaire is used with good reliability and validity and analysis of structural equations. The results at 95% confidence supported all the hypotheses. That is to say, price promotions had a positive effect on impulsive buying behaviour, pricing promotions had a positive effect on service innovation, and finally service innovation had a positive effect on impulsive buying behaviour. The other result of this study is a confirmation of the impact of price promotions mediator between service innovation and impulsive buying behaviour of customer's Hyper Star city.

The effect of price promotions on impulse buying: the mediating role of service innovation in fast moving consumer goods

With the global economic integration, the development of international activities reduce trade barriers in the exchange between countries, and the intensification of competition. Knowledge of customer preferences and encouraging them to buy has become vital for the survival and development of enterprises (specify consumer goods or fast rotation). FMCGS, the aim of this study is to explain the impact of price promotions on the process of immediate buying in goods of Isfahan that based on an infinite population, the sample is 384 people. The statistical society was customers of Hyper Star store. In order to collect data, a questionnaire is used with good reliability and validity and analysis of structural equations. The results at 95% confidence supported all the hypotheses. That is to say, price promotions had a positive effect on impulsive buying behaviour, pricing promotions had a positive effect on service innovation, and finally service innovation had a positive effect on impulsive buying behaviour. The other result of this study is a confirmation of the impact of price promotions mediator between service innovation and impulsive buying behaviour of customer's Hyper Star city.

How Does Dynamic Pricing Affect Customer Behavior on Retailing Platforms? Evidence from a Large Randomized Experiment on Alibaba

Dynamic pricing through price promotions has been widely employed by online retailers. We study how a promotion strategy -- offering customers a discount for products in their shopping cart -- affects customer behavior in the short and long term on a retailing platform. We conducted a randomized field experiment involving more than 100 million customers and 11,000 retailers with Alibaba Group, the world's largest retailing platform. We randomly assigned eligible customers to either receive promotions for products in their shopping cart (treatment group) or not (control group). In the short term, our promotion program doubled the sales of promoted products. In the long term, we causally document unintended consequences of this promotion program during the month following our treatment period. On the positive side, it boosted customer engagement, increasing the daily number of products customers viewed and their purchase incidence on the platform. On the negative side, it intensified strategic customer behaviors in the post-treatment period in two ways, by (1) increasing the proportion of products that customers added to the shopping cart upon viewing them, possibly due to their anticipation of future shopping-cart promotions and (2) decreasing the price customers subsequently paid for a product, possibly due to their strategic search for lower prices. Importantly, these long-term effects of price promotions on consumer engagement and strategic behavior spilled over to sellers that did not previously offer promotions to customers. Heterogeneous treatment effects across promotion, seller, and consumer characteristics are examined. This research documents the causal effects of dynamic pricing through price promotions on consumer behavior on a retailing platform, which have important implications for platforms and retailers.

Do Discounts in Ticket Prices Induce Sustainable Profit to Performing Arts Suppliers?

This study investigates the effect of price promotions for musicals on consumer perception of fairness toward other similar musicals and the role of consumer involvement in performing arts as a moderating variable. A threshold regression estimation which was performed using data from a survey on South Korean consumers showed a decrease in consumers’ fairness perception once they became aware of discounts on similar performing arts and, consequently, a decrease in their intent to purchase tickets at regular prices. The results also showed that the samples can be split into low- and high-involvement groups, with the effect of fairness perception on purchase intention statistically significant for both groups, however, larger for the high-involvement group; the high-involvement group is expected to consume more performing arts products than the low-involvement group. These results imply that consumer perception of unfairness regarding ticket price discounts may negatively affect the long-term profits of performing arts suppliers.

Dynamic effects of price promotions: field evidence, consumer search, and supply-side implications

This paper investigates the dynamic effects of price promotions in a retail setting through the use of a large-scale field experiment varying the promotion depths of 170 products across 17 categories in 10 supermarkets of a major retailer in Chile. In the intervention phase of the experiment, treated customers were exposed to deep discounts (approximately 30%), whereas control customers were exposed to shallow discounts (approximately 10%). In the subsequent measurement phase, the promotion schedule held discount levels constant across groups. We find that treated customers were 22.4% more likely to buy promoted items than their control counterparts, despite facing the same promotional deals. Strikingly, the magnitude of the dynamic effects of price promotions (when promotional depths are equal across conditions) is 61% of the promotional effects induced by offering shallow vs. deep discounts during the intervention phase. The result is robust to other concurrent dynamic forces, including consumer stockpiling behavior and state dependence. We use the experimental variation and historical promotional activities to inform a demand-side model in which consumers search for deals, and a supply-side model in which firms compete for those consumers. We find that small manufacturers can benefit from heightened promotion sensitivity by using promotions to induce future consideration. However, when unit margins are high, heightened promotion sensitivity leads to fierce competition, making all firms worse off.