The Effects of Framing Price Promotion Messages on consumers` Perceptions and Purchase Intention

Abstract

When implementing a price reduction, retailers tend to favor one practice over the other. Yet how different implementations of a price promotion influence consumers` perceptions and purchase intentions has been insufficiently studied. In this study, we framed a price reduction in percentage versus dollar terms on either a high-price or a low-price product. For the high-price product, our subjects indicated that a price reduction framed in dollar terms seemed more significant than the same price reduction framed in percentage terms, and the opposite was true for the low-price product. We also offered the same savings in either coupon or discount promotions and found that coupon promotions were evaluated more favorably and were more effective in changing subjects` purchase intentions. These results provide implications for when retailers should stress the absolute versus the relative magnitude of discounts to advertise price promotions.