When Do Price Promotions Affect Pretrial Brand Evaluations?

Abstract

The authors investigate the conditions in which price promotions affect pretrial brand evaluations. A price promotion is theorized to be informative about brand quality when it stands out because it deviates from either its own past behavior or industry norms. Product category experts, who have alternative sources of information to make quality judgments, are expected to make less use of price promotions as a quality cue than novices are. The authors describe three laboratory studies in the context of a price promotion that is designed to increase trial in a service industry. Results suggest that consistency with past promotional behavior, distinctiveness in terms of how common it is to promote in an industry, and consumer expertise are important variables that moderate when price promotions have an unfavorable effect on brand evaluations. The authors highlight implications for service providers that are offering promotions to attract new customers in industries in which promotions are uncommon and discuss the theoretical implications of the finding that expertise moderates the effects of distinctiveness and consistency on evaluations in the context of price promotions.

Ethnic minority consumers' responses to sales promotions in the packaged food market

“…Moreover, Hunt and Keaveney (1994) argued that consumers can make attributions in response to price promotions and can actually use ''price promotions as a positive piece of information about the brand rather than as an internal signal about buying the product only to get a price deal'' (p. 513). We concur with Raghubir and Corfman (1999) and argue price promotions may serve more than an economic function and may result in negative evaluations when they are not common in the industry.…”

Non-fulfillment of promotional deals: the impact of gender and company reputation on consumers’ perceptions and attitudes

“…Participants then read: (a) information on the fictitious company, House of Pizza, which, purportedly, came from the company's website; (b) an article on the company, which article was supposedly reproduced from a local publication; this article manipulated company reputation, so those in the positive company reputation condition saw a different version than that seen by participants in the negative company reputation condition (see Appendix); (c) an article, supposedly from The Wall Street Journal, which discussed a non-fulfillment involving the fictitious company. In this way, we hoped to successfully include experimental information with non-experimental information, as in the procedure used by Raghubir and Corfman (1999). In the case of the non-fulfillment, participants were told the following:…”

“…Other market researchers have also pointed to asymmetric effects of positive and negative information (for example, Taylor, 1991): negative experiences are more elaborated upon than positive experiences (Fiske, 1980) and, according to Raghubir and Corfman (1999), ''people search more for negative (versus positive) information when making judgments, and they weight this information more heavily because they find it more diagnostic than positive information'' (p. 213).…”

Customer experience quality: an exploration in business and consumer contexts using repertory grid technique

“…This meaning arises from the presence of these features in a goal hierarchy, which relates "concrete goals" such as the desire for a bicycle of a particular specification to more "abstract goals" such as a desire to be able to cycle in woodlands (Barsalou 1991;Peterman 1997). In essence this goal hierarchy hypothesizes a causal link between what a supplier has to offer and the customer's goals-the concept of attribution (Raghubir and Corfman 1999). The desired customer experience and the customer's evaluation of the actual experience depend on these goals; a shopping trip for ingredients for dinner, for example, will be judged against its contribution to this goal (Rohm and Swaminathan 2004).…”