munger and grewal

The effects of alternative pricepromotional methods onconsumers' product evaluationsand purchase intentionsJeanne Lauren MungerUniversity of Southern Maine, USA

Dhruv GrewalBabson College, USA

Keywords Perception, Discounts, Pricing

Abstract This research examines the effects of bundling format (partially-bundledattributes vs. unbundled attributes) and framing of promotional discounts (rebate,discount and free-options) on perceived quality, price acceptability, perceived value andsubsequent purchase intentions. The results indicate that price reductions that are framedas providing `̀ free'' product options are perceived more favorably than conventionaldiscounts which, in turn, are more favorable than rebates, holding the total amount of aprice reduction constant. The results also suggest that unbundling of deals (orsegregation of gains) enhances these perceptions.

IntroductionThe concept that the perceived value of a product has a direct impact on

behavior has been well substantiated by both marketing academics and

practitioners. Because product quality and price directly influence value, it is

no surprise that the efforts of marketers have focused on improving product

quality and reducing price in order to enhance perceptions of value, and

consequently purchase intentions (Dodds et al., 1991; Grewal et al., 1998).

Considerable strategic effort has to be undertaken to make improvements in

product quality and offer reductions in price (via cost reductions) in order to

enhance perceived value. Tactical approaches, like presenting price

information in a bundled vs. unbundled format and alternative forms of

promotions (e.g. free options, conventional discounts and rebates), also

influence perceptions of value and behavioral intentions (Grewal and

Compeau, 1992; Compeau and Grewal, 1998). Therefore, marketers must

consider both strategic actions that result in actual improvements as well as

tactical acts that improve perceptions of value by presenting their products

and promotions in the most favorable light.

This research investigates the effects of different promotional price formats

on perceptions of price, quality, value, and purchase intentions, while

holding the absolute magnitude of the sales reduction constant. It extends

previous research by proposing that these perceptions are indeed influenced

The research register for this journal is available at

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The current issue and full text archive of this journal is available at

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Dhruv Grewal would like to acknowledge the support of a University of MiamiSchool of Business Summer Research Grant. The authors acknowledge the helpfulsuggestions made by participants at the Fordham Pricing Conference, HoomanEstelami, and Kent B. Monroe.

Tactical approaches

JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 10 NO. 3 2001, pp. 185-197, # MCB UNIVERSITY PRESS, 1061-0421 185

An executive summary formanagers and executivereaders can be found at theend of this article

by two advertising message characteristics: price presentation method (the

level of bundling of item prices) and the promotional method (free options,

conventional discounts and rebates).

Promotions and the price quality-value-purchase chainThe conceptual models of Dodds et al. (1991) and Grewal et al. (1998)

provide the theoretical framework for the influence of promotions on price

acceptability, quality, value and purchase intentions (see Figure 1). The

model provides a framework for studying the effects of bundling and framing

on perceptions of price, quality and value in addition to purchase intentions.

We intend to investigate whether the format used to present a promotional

discount or price reduction affects perceptions of price, quality, value and

purchase intentions. More specifically, differing levels of bundling and

different ways of framing the discount will have an impact even when the

total amount of the discount is held constant. A promotional discount can be

presented using a variety of different formats.

Price promotions can be developed and presented using a bundling (e.g. buy

a hamburger and large drink and get fries for an extra $25) or unbundling

tactic (item discounts provided). Even when the total amount of a discount

remains constant, the format of the promotional discount can influence a

variety of perceptions related to the attractiveness of the promotion. Bundled

discounts aggregated into one large amount may be perceived as delivering a

different level of value than those that are unbundled as several segregated

discounts (Yadav and Monroe, 1993).

Price presentation cues (bundling vs. unbundling of discounts)

The value function developed by Kahneman and Tversky (1979, 1984;

Tversky and Kahneman, 1981) provides the conceptual framework for

understanding the impact of different levels of bundling of discount

information on price perceptions. Three critical features are inherent within

the value function (see Figure 2). First, it is defined on deviations from a

reference point, incorporating the notion that the value of a particular

outcome is evaluated on the basis of gains and losses. Second, the value

function is commonly S-shaped, generally concave for gains and convex for

losses. This shape reflects the general tendency for people to be risk-averse

in the face of gains and risk-taking when facing losses. Third, the value

Figure 1. Role of promotional frames on the price-quality-value chain

Attractiveness ofpromotion

186 JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 10 NO. 3 2001

function is steeper for losses than for gains relative to deviations from the

reference point.

Thaler (1985) proposed that multiple gains should be separated since a set of

small gains will be perceived to be greater in total value than the sum total of

those gains presented by itself. He bases this conclusion on the premise that

the value function is concave for gains. It must be noted that price reductions

are likely to be perceived as gains (see Monroe, 1990). A price reduction is

likely to be viewed as a gain as the consumer is likely to compare the

reduced price (or sale price) against the original price (or reference price).

Thus, the reduction in the price that the consumer has to pay would be

perceived as a gain. This gain has been defined as transaction value in the

literature (see Grewal et al., 1998).

On the basis of this argument, one would expect that separating a

promotional discount into multiple discounts would result in more favorable

perceptions of the value of the savings (gain) (Kaicker et al., 1995). For

example, Kaicker et al. (1995) found that when consumers were exposed to

multiple gains, they preferred component pricing to bundle pricing.

Based on the above discussion, we hypothesize that the bundling vs.

unbundling of the promotional discounts will affect consumers' perceptions

of price, quality, value and purchase intentions. Because unbundling

involves separating the gains, they will be perceived more favorably than the

same total discount amount presented in a more bundled form.

H1: Promotional discounts that are presented in an unbundled form will be

viewed more favorably than the same discount presented in a bundled

form.

Framing of promotional discounts

Price comparison cues are extrinsic informational cues that contain a real or

implied reference price and an offered price (Della Bitta et al., 1981).

Previous research has found that the use of a price comparison cue affects

perceived savings and price acceptability (e.g. Blair and Landon, 1981;

Figure 2. Hypothetical value function

Perceived as gain

Bundling vs. unbundling

JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 10 NO. 3 2001 187

Lichtenstein et al., 1991; Liefeld and Heslop, 1985; Rajendran and Tellis,

1994; Urbany et al., 1988). Berkowitz and Walton (1980) found that

comparison cues offering larger savings in terms of absolute magnitude were

more favorably perceived.

Thaler (1985) developed the concept of transaction utility based on prospect

theory (Kahneman and Tversky, 1979; 1984; Tversky and Kahneman, 1981).

This theory in conjunction with prior work on adaptation-level theory and

assimilation-contrast theory (see Monroe et al., 1991) serves as a framework

describing the effects of a comparison cue on perceptions. Transaction utility

(TU) is derived from comparing the actual selling price of a product to the

expected or fair price of that product (TU = f (selling price reference price).

When the selling price is inflated it would enhance consumers' price

expectations, therefore enhancing transaction utility through higher

perceived value. Thus, the way the price-promotion is framed is likely to

evoke different levels of reference prices (due to differential encoding of the

deal) and is likely to be valued differently (Heath et al., 1995; Folkes and

Wheat, 1995).

The way a price-promotion is framed is likely to affect consumers'

perceptions of price, quality, value, and purchase intentions (e.g. Chen et al.,

1998). We specifically examine the effects of three price-promotional frames

± rebate, discount and free options. The framing of the discount using free

options will be perceived most favorably. For example, Leigh and

Varadarajan (1991) found that consumers exposed to two price promotions ±

`̀ buy one get one free'' and `̀ get two for the price of one'' took greater

advantage of the first offer. Additionally, results of Diamond (1992) suggest

that free-options may be preferred for small discounts as opposed to large

discounts. In our study, the discount size was small in a relative sense

(e.g. $1,000 saving on a $13,035 car is about 8 per cent).

We expect that rebates will be perceived the least favorably. Recent work

has demonstrated that consumers value their time (Marmorstein et al., 1992).

The time and effort involved with redeeming the rebate is likely to have an

adverse affect of their perceptions (e.g. lower value) and reduce their

purchase intentions (Chapman, 1987; Tat et al., 1988). Work by Folkes and

Wheat (1995) further suggests that due to the temporal distance involved in

getting the savings associated with the rebates at a later time they are likely

to evoke price perceptions similar to regular prices than discounts.

Furthermore, consumers tend to discount future outcomes more heavily.

Thus, rebates are likely to be viewed as less attractive than a regular

discount.

H2: Compared to discounts, rebates will be perceived as less attractive and

free options will be perceived as more attractive.

MethodologyExperimental design

A 2 (price presentation: 2 levels of unbundling) � 3 (promotional frame: free

options, conventional discounts, rebates) between-subjects design was used

to test the hypotheses. An automobile was chosen as the product because

they frequently use these variations in price promotions and are a category

familiar to the subjects.

Two levels of unbundling were used. In the less unbundled option, subjects

were presented the price for the standard equipment ($10,320), premium

equipment ($388), comfort equipment ($1,222), power equipment ($595),

Prospect-theory

Adverse affect


read defogger ($160) and removable sunroof ($350). In the more unbundled

option, subjects were similarly presented the price for the standard

equipment ($10,320), read defogger ($160) and removable sunroof ($350).

However, the equipment within the other three packages was further

individually priced (e.g. the price of the premium equipment attributes were

provided: map lights $158, color-keyed fronts $78, and intermittent wipers

$152).

The promotional frame of the price reduction included three levels:

(1) free options;

(2) discount; and

(3) rebate off the list.

Each condition involved an automobile with standard base features with a set

of options for the particular model being evaluated. The description of the

standard base model and the options remained constant across treatment

conditions.

The only thing that varied was the format for presenting the sales reduction.

The following three promotional frames were used in the experiment:

Free options. The standard components of the base model and each option

package were described. The discount presented a set of free options.

Discount. The standard components of the base model and each option

package were described. A conventional discount was presented.

Rebate. The standard components of the base model and each option package

were described. A rebate was presented.

The sales reductions presented in this research were designed to be both

plausible and relevant to the respondents. This allowed for a believable cover

story in order to reduce the possibility of demand artifacts due to hypothesis

guessing by subjects.

Subjects

A sample of 204 students participated in the experiment. Students were

recruited from two universities, one a large Midwestern university and the

other a small university in the Northeast. The students who participated were

either in their junior or senior year at college. Subjects were assigned

randomly to each of the six treatment conditions.

It was expected that a large proportion of the students in the sample might be

considering the purchase of an automobile within a relatively short time.

This should have helped in stimulating a sufficient level of involvement in

the research in order to assure a fairly high level of processing the

information as might occur in the early stages of information search in the

automobile purchase process. Since an automobile purchase was a decision

that students might face in the near future, it lent credibility to the cover

story.

Experimental procedure

Subjects were processed in small groups of four to 12 subjects each, although

a small number of students were processed individually. Each of the

conditions was represented in each group session. Subjects were told that the

purpose of the study was to ascertain their attitudes toward a specific

automobile that was for sale.

Three promotional frames

High level of processing


After subjects were oriented to the task, they were told to look over a

brochure for an automobile, which was provided. After subjects had looked

at the brochure, they were asked to respond to several measures relating to

the automobile presented in the brochure. Next, they were asked to look over

the stimuli which were presented as the sticker price information for a

specific automobile with a `̀ Graduate Package'' that they were told was for

sale. After that subjects reviewed the price and option information they were

asked to respond to a series of measures relating to their evaluations of the

specific automobile presented in the sticker price information.

Dependent variable measurement

After subjects have been exposed to the automobile with the `̀ Graduate

Package'' they were asked to complete a series of evaluative ratings relating

to the stimuli. Seven-point bipolar scales were developed to measure price

acceptability, perceived quality, perceptions of value, and purchase

intentions. The internal reliability of each set of scales was assessed using

correlations or Cronbach's alpha, as presented below:

(1) Price acceptability (two items, r = 0.42):

. inexpensive/expensive;

. acceptable price/unacceptable price.

(2) Quality (four items, alpha = 0.72):

. bad/good;

. undesirable features/desirable features;

. poor performance/excellent performance;

. not very durable/very durable.

(3) Value (three items, alpha = 0.78):

. very bad deal/very good deal;

. bad buy for the money/good buy for the money;

. bad value for the money/good value for the money.

(4) Purchase intentions (two items, r = 0.72):

. would not consider buying/would consider buying;

. definitely will not buy/definitely will buy.

ResultsANCOVA procedures were used to test the hypotheses. The means are

provided in Table I. The analysis of covariance results from evaluating H1

and H2 are summarized in Table II. Gender was treated as a covariate in our

analysis. The interaction term was not significant in all four ANCOVAs.

H1: We expected that unbundled options would be viewed more favorably

than partially bundled deals. We found support that the unbundled

format was viewed more favorable than the bundled format for

consumers' perceptions of quality (p < 0.05) and their purchase

intentions (p < 0.10). However, bundling vs. unbundling did not

significantly affect price acceptability or value perceptions.

H2: The effects of the price-promotional frames indicated that they

significantly affected price acceptability (p < 0.05), quality (p < 0.10),

`̀ Graduate package''

Analysis of covariance


value (p < 0.10) and purchase intentions (p < 0.05). The results

supported our hypotheses that rebates would be perceived least

favorably and free options most favorably. The only variable where the

plot of means was not in the right direction was for perceived quality.

The perceived quality of the rebate was viewed no differently than the

conventional discount condition.

Conceptual model linkages. We also examined the effects of price and

quality perceptions on value perceptions using regression analysis. The

results suggest that the model is significant (F(2,201)=124.72, p < 0.001,

adjusted R2 = 0.55). As predicted, both price acceptability and quality had

significant effects on perceptions of value (price acceptability: std. � = 0.31,

t = 6.43, p < 0.001, quality: std. � = 0.61, t = 12.51, p < 0.001). Regression

results were also used to examine the effects of price acceptability, quality

and value on consumers' purchase intentions (F(3,200) = 53.10, p < 0.001,

adjusted R2 = 0.44).

Mediation test. Procedures suggested by Baron and Kenny (1986) and

Hastak and Olson (1989) were followed to assess whether perceived value

mediates the effects of promotional frames and promotional bundles on

purchase intentions. Baron and Kenny (1986) recommended that three

conditions need to be satisfied between the independent variables

(promotional variables), mediator (perceived value) and the dependent

variable (purchase intentions) to establish mediation.

First, the independent variables (bundling and frame) need to affect the

mediator (perceived value). The previous results provide evidence that

Dependent variable Rebate Discount

Free

options

Total

means

Partially-unbundled Price acceptability 4.53 4.98 5.08 4.87

Quality 4.86 4.89 5.18 4.98

Value 4.73 5.04 5.09 4.95

Purchase intentions 3.75 4.09 4.12 3.99

Unbundled Price acceptability 4.37 4.84 5.13 4.78

Quality 5.28 5.01 5.36 5.22

Value 4.96 5.11 5.27 5.11

Purchase intentions 4.18 3.96 4.84 4.32

Total means Price acceptability 4.45 4.91 5.11

Quality 5.08 4.95 5.27

Value 4.84 5.07 5.18

Purchase intentions 3.96 4.02 4.48

Note: N = 34 in each cell

Table I. Means for the various conditions

Df Price Quality Value

Purchase

intentions

Covariate-sex 1 8.81*** 1.09 0.39 0.33

Bundling 1 0.44 4.36** 1.67 3.40*

Frame 2 4.21** 2.76* 2.91* 3.38**

B � F 2 0.09 0.53 0.17 1.94

Error 197

Notes: * p < 0.10; ** p < 0.05; *** p < 0.01;

Table II. ANCOVA results

Regression analysis


framing affected perceptions of value (see Table II). The results did not

support the effect of bundling on value perceptions. Thus, we can only assess

whether the effect of the promotional frame on purchase intention was

mediated by value perceptions. Second, the independent variables

(promotion and bundling) need to affect the dependent variable (purchase

intentions). As shown in Table II, these two factors do affect purchase

intentions. Third, the mediator (value) needs to affect the dependent variable

(purchase intention), while the effects of the independent variables

(promotional frames and bundling) are reduced. The analysis of covariance

results indicate that when value is treated as a covariate, the effect of the

framing is not significant (F(2,196) = 1.99, p = 0.14). Furthermore, it must be

noted that the effect of value (covariate in the ANCOVA results) is

significant (F(1,196) = 94.08, p < 0.001). Thus, the results of our mediation

analysis provide support that the effect of promotional frame on purchase

intention was completely mediated by value perceptions.

Implications and future research avenuesThe results of this investigation provide evidence that the framing of

discounts impacts consumer perceptions, and also influence subsequent

purchase intentions. Our results suggest that consumers who were exposed to

promotions that included something for free viewed them more favorably

than promotions that involved rebates, which further resulted in more

favorable purchase intentions. These results suggest that marketing mangers

need to carefully plan their promotional budgets and the allocation of the

budget over different forms of promotions. Providing promotions that

emphasize free giveaways are likely to be more effective than a standard

discount (e.g. 20 per cent off) or a rebate.

One factor that might drive our results is that the perceived amount of effort

involved in redemption of rebates as compared to free additions or

giveaways. Often, rebates are associated with greater expenditures of time

and energy for redemption than free features. Retailers and marketers need to

be aware of the extent to which perceptions of the time and effort are

involved in redeeming different types of discounts. The redemption effort is

likely to have a negative influence on perceptions of the value. The goal of

this future research would be to better understand the impact of perceived

effort associated with different discount formats on perceptions of quality,

price acceptability, value and purchase intentions. Furthermore, future

research should also investigate the phenomenon across a broader range of

product categories and discount amounts, where consumers might perceive

differences in the costs/benefits tradeoff.

Future research is also needed to better understand the impact of bundling of

discounts on perceptions of quality, price acceptability, value and purchase

intentions. The results of this investigation provide evidence that bundling of

discount information affects perceptions of quality and value. It provides

directional support for the claim that gains that are segregated are perceived

more favorably than gains that are aggregated, in line with the predictions of

Thaler (1985). These results have important implications for marketing

managers and retailers. They emphasize that separating a promotional

discount into a number of discounts was more affective in influencing

purchase intentions than one large discount. It also lends credibility towards

the practice followed by auto-dealers of offering discounts on various car-

items.

Redemption of rebates

Impact of bundling


Further investigation is necessary to determine the impact of segregation of

discount information across a broader range of discount magnitude. The

overall percentage discount of 8 per cent in this study may have fallen short

of the minimum level necessary for consumers to perceive a promotional

discount or process a price promotion (see Grewal et al., 1996).

The value function implies that the way a particular outcome is presented in

terms of gains will influence perceptions. That is, a promotional discountthat is presented as a gain will be perceived more favorably than one that is

not. For example, a hamburger, French fries and soda can be presented at a

total discounted meal price, or it can be presented with separate discounts for

each individual component along with the total discount. The former

presents the promotional price in a completely bundled format, without

explicit mention of the amount of overall savings. The latter uses an

unbundled format, with an explicit mention of both the savings for each

individual component and the total discount. Because there are many ways topresent promotional discount information, the level of bundling used to

present promotional prices in this study fall somewhere on a continuum

between the two extremes of fully bundled and completely unbundled. Very

little research has been conducted to determine the extent to which the level

of bundling impacts perceptions.

Studies of the effect of reference price as a comparison cue have typically

varied the absolute magnitude of the sales reduction presented to subjects.

Berkowitz and Walton (1980) held the reference price constant and varied

the absolute magnitude of the discount resulting in different selling prices.As expected, the size of the discount had a positive affect on value

perceptions. Similar results were also found by Urbany et al. (1988). It

would be useful to examine whether the effects of alternative frames vary as

a function of the magnitude of the discount.

Recent research has also found that the presentation of the discount size

(absolute dollar amount vs. relative percentage) has a differential effect on

consumers' perceptions of value (see Darke and Freedman, 1993; Darke et

al., 1995). Thus, examining whether the effectiveness of promotional-frames

would vary by the presentation of the discount would also be important.

Overall, the results of this investigation indicate that further study of these

phenomena is warranted. Another direction for future research is to studythese phenomena for a variety of product categories and price levels.

Automobiles were selected as a target product in part because it was likely

that subjects would respond to the absolute magnitude of the reductions.

Future studies should use several target products representing a range of

prices and price reductions in order to better understand this phenomenon.

Research needs to examine whether these frames are evaluated differently as

a function of ethnic differences (e.g. Green, 1995). Some cultures are likely

to be less time-sensitive and may view rebates as being as attractive as

regular discounts. Clearly, there is need for further research to examine therole price-promotions (and varying frames) play in influencing consumer

behavior. Understanding perceptual responses to price information are

worthy of further research as they have important theoretical and managerial

implications.

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examination of a bundle's transaction value'', Journal of Marketing Research, Vol. 30,

August, pp. 350-8.

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Executive summary and implications for managers andexecutives

Words have power ± do not abuse itIt is free! What a great word! We rush out to get that `̀ free'' offer because we

think we are getting a bargain. Of course, if we stop and think for a moment,

we realise that as Henry Ford put it: `̀ There's no such thing as a free

lunch''. But, whatever our rational mind tells us, we are still attracted by the

offer of something free.

`̀ Free'' is one of those words ± like `̀ new'' or `̀ exclusive'' ± that hits the

human psyche at a very base level. And marketers need to understand when

and how to use these words for maximum advantage. If you litter your

communications with these responsive words, the consumer soon becomes

suspicious. But when you use them sensibly and sparingly the result is

usually advantageous.

Few ± if any ± consumers really consider actual valueConsumers operate on the basis of perceptions. We'll all deny this when

asked, of course. It is only that silly woman next door, or the sucker in the

pub who fall for these so-called free offers. Not so. We make a judgment

about the value of an offer on the basis of our initial reaction. We've all said

it: `̀ That's a good offer''.

So Munger and Grewal are right to say that `̀ . . . marketers must consider

both strategic actions that result in actual improvements as well as tactical

acts that improve perceptions of value by presenting their products and

promotions in the most favourable light''.

It is one thing to know that consumers view promotions involving a free offer

more favourably than most other promotions, but we should also appreciate

that there has to be real value in the offer. The use of the magic word ±

`̀ free'' ± should not be a con. We need to balance the creation of value for

our customers with the way in which we communicate that value.

The right words make a promotion strongerWhen we decide to use a promotion to push sales or attract customers ±

ideally within the context of our overall brand strategy ± we should consider

the tactic as well as the strategy. Some managers seem to have a thing about

not giving things away free despite the evidence that the promotion will work

better if that is the basis of the offer.

So, having decided to undertake a sales promotion we should structure that

promotion to make it more attractive and communicate the promotion so as

to really whet the consumer's appetite. These tactical considerations are, in

their way, as important as the strategic decision to use a sales promotion.

Too often everyone stops thinking once the sales promotion decision is made.

Some junior sprog is given the task of putting together the promotion and the

big managers wander off to their next away day or the golf course. We need

to pay attention to the offers we put out. We should think about the way in

which the words we use motivate or demotivate customers and we should

want the best possible outcome from the promotion.

Think about what you are asking the customer to doIf the customer gets the deal straight up they are more likely to take

advantage. If that customer has to wait or has to go out of the way to secure


This summary has beenprovided to allow managersand executives a rapidappreciation of the contentof this article. Those with aparticular interest in thetopic covered may then readthe article in toto to takeadvantage of the morecomprehensive descriptionof the research undertakenand its results to get the fullbenefit of the materialpresent

the deal, that customer is less likely to take advantage. We must consider ±

alongside the actual value of the offer we are making ± the cost in time and

effort to the consumer.

Munger and Grewal stress this point when they say: `̀ Retailers and

marketers need to be aware of the extent to which perceptions of the time and

effort involved are involved in redeeming different types of discount''. The

more effort needed from the customer, the less likely the offer will be taken

up. It is not just actual time and effort, either, but the consumer's perception

of the time and effort. If the consumer thinks it is a schlep to go up to

customer services on the sixth floor, then they will need a better deal to make

them take that extra trip.

Structuring our promotions is something of an art. We should consider the

size of the offer (to us and in the mind of the consumer), the way in which we

word the offer and the actions that the consumer has to take to redeem the

offer. The best offer will involve a high degree of perceived value and little

effort for the consumer. And, we hope a significant difference between

perceived and actual value in our favour.

The caveat ± once you have given a free gift you cannot stop givingThe problem with free offers is that the consumer comes to expect them. Look

at some of the fast food chains. These firms keep on offering free product

because they are trapped into the need to do so. When we make strategic

decisions about sales promotions we need to recognise that the fact of the

promotion will affect the consumers' overall perception of our offer.

When we go into the burger bar, we take the meal deal. Why? Because we

are not going to pay for the drink as it is always rolled into the meal deal for

free. My son assumes he will get a free lolly at our local restaurant because

he has always been given one. It is part of the deal, part of the consumer's

expectations. The free offer ceases to be a promotion and becomes a core

part of your product or service offer.

So, when we step down the road of making free offers we must be prepared to

accept the fact that some consumers will come to expect the deal. Otherwise,

we should be wary about making such offers too frequently. In truth, the

sales promotion always affects brand perceptions and the stronger the

promotional offer the more it will influence the brand. If you don't want to be

known as a service that always offers a deal, don't do too many promotional

offers and when you do, target them carefully.

(A preÂcis of the article `̀ The effects of alternative price promotional methods

on consumers' product evaluations and purchase intentions''. Supplied byMarketing Consultants for MCB University Press.)
