Can Uncertainty Improve Promotions?

Goldsmith, Kelly; Amir, On

doi:10.1509/jmkr.47.6.1070

Cited by 146 publications

(150 citation statements)

References 37 publications

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“…Specifically, most recently, Goldsmith and Amir (2010) Goldsmith and Amir (2010) observed a higher purchase rate for the promoted candy bar when the gift was more valued than when it was less valued. More importantly, the purchase rate of the candy bar, when coupled with a promotion that was ambiguously defined as either of the two (less or more valued) gifts, did not differ from when coupled with a more valued gift promotion (the three types of promotions were run separately, one condition at a time).…”

Section: Previous Consumer Behavior Research On Probabilistic Promotionsmentioning

confidence: 99%

“…The authors suggested that their findings were due to wishful thinking, which made customers focus on the best option of the ambiguously defined promotion. Extrapolating Goldsmith and Amir's (2010) findings from the product promotions domain to our price promotions domain and from unknown to known probabilities, a probabilistic price promotion that offered, e.g., a 10% chance to get a purchase for free and a 90% chance to pay the regular price would cause consumers to focus on the best possible outcome ("free"). As a consequence, such a probabilistic price promotion would be as effective and thus cheaper for a retailer than simply offering a product for free with certainty.…”

Section: Previous Consumer Behavior Research On Probabilistic Promotionsmentioning

confidence: 99%

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When Retailing and Las Vegas Meet: Probabilistic Free Price Promotions

2017

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Abstract. A number of retailers offer gambling-or lottery-type price promotions with a chance to receive one's entire purchase for free. Although these retailers seem to share the intuition that probabilistic free price promotions are attractive to consumers, it is unclear how they compare to traditional sure price promotions of equal expected monetary value. We compared these two risky and sure price promotions for planned purchases across six experiments in the field and in the laboratory. Together, we found that consumers are not only more likely to purchase a product promoted with a probabilistic free discount over the same product promoted with a sure discount but that they are also likely to purchase more of it. This preference seems to be primarily due to a diminishing sensitivity to the prices. In addition, we find that the zero price effect, transaction cost, and novelty considerations are likely not implicated.

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Section: Previous Consumer Behavior Research On Probabilistic Promotionsmentioning

confidence: 99%

Section: Previous Consumer Behavior Research On Probabilistic Promotionsmentioning

confidence: 99%

When Retailing and Las Vegas Meet: Probabilistic Free Price Promotions

2017

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“…This reduction leads to lower repurchasing levels after the promotion, when the product is back at its regular price level. Investigations of uncertain promotions have focused on the immediate benefits and have shown that GPDs might induce purchase incentives similar to comparable RPDs (e.g., Goldsmith and Amir 2010). However, no study has explored the consequences of GPDs for customers' IRPs and repurchasing subsequent to the promotion.…”

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confidence: 99%

Gambled Price Discounts: A Remedy to the Negative Side Effects of Regular Price Discounts

Alavi

Bornemann

Wieseke

2015

Journal of Marketing

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In the context of price discounts, a special type of price promotion, in which savings depend on the outcome of a gamble and are thus uncertain, has recently achieved some popularity. The question arises as to whether such gambled price discounts (GPDs) incur the negative reference price effect—that is, a downward shift in customers’ internal reference price (IRP)—which is often associated with regular price discounts (RPDs). From several studies, including two longitudinal field experiments, the authors find that GPDs indeed alleviate the negative reference price effect: IRPs and actual repurchasing tend to be lower for RPDs than for GPDs and a no-discount control condition. Moreover, the authors explore the psychological underpinnings of these effects and show that the different consequences of GPDs versus RPDs on IRPs are more pronounced if information regarding product quality is limited. The authors demonstrate that findings are robust to variations of GPD discount levels and the probability of winning.

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“…With only the data from study 3, one might wonder if consumers are less willing to be interrupted if they are more uncertain of winning two of three games in the allotted time (cf. Goldsmith and Amir 2010). Study 2 rules that out.…”

Section: Discussionmentioning

confidence: 99%

Pardon the Interruption: Goal Proximity, Perceived Spare Time, and Impatience

Jhang¹,

Lynch²

2015

J Consum Res

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There is no worse time to be interrupted than right now. Being close to attaining a goal to complete a focal task increases the attractiveness of that task compared to an interrupting task (study 1), makes people less willing to take on some otherwise attractive interruption than if they were farther away from completion (studies 2, 3, and 4), and causes them to perceive that in that moment they have little spare time (studies 3 and 4). Consumers immersed in goal pursuit are affected by local progress on an individual subgoal that supports an overarching goal even if this has no effect on the timing of attaining the overarching goal. Observers do not appreciate the motivating power of proximity to completing subgoals, and this leads them to mispredict the behavior of others (study 5).

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Can Uncertainty Improve Promotions?

Cited by 146 publications

References 37 publications

When Retailing and Las Vegas Meet: Probabilistic Free Price Promotions

When Retailing and Las Vegas Meet: Probabilistic Free Price Promotions

Gambled Price Discounts: A Remedy to the Negative Side Effects of Regular Price Discounts

Pardon the Interruption: Goal Proximity, Perceived Spare Time, and Impatience

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