The effects of framing of price promotion methods on consumers' perceived value and purchase intentions.

Abstract

When implementing a price promotion, retailers often make use of different framing methods in order to attract consumers’ attention and induce them to make purchases. However, the different effects of price promotion methods on consumers’ perceived values and purchase intentions have been insufficiently studied in an Asian context. The purpose of the survey is to examine the effects of various price promotion methods such as free gifts, dollar discounts and discount coupons on consumers’ perceived values of the promotions and their purchase intentions. The data for the study is collected via a survey instrument, from which 115 usable responses are obtained. The results of the data analysis show that receiving free gifts and using discount coupons are most favored in terms of perceived value of the promotion and purchase intentions among most consumers. In addition, the study also examines the framing of a price discount in percentage terms versus dollar terms on either a high-price or low-price product. The results of this analysis indicate that, for the high-price product, respondents respond more favorably and have higher purchase intentions when the discount is priced in absolute terms relative to percentage terms while the opposite is true for low-price products. Furthermore, demographic studies in terms of gender, age and income levels are also carried out to investigate if these factors can explain differences in perceived value and purchase intentions of the various price promotion methods.