the effects of discount level and scarcity on the

The Effects of Discount Level and Scarcity on the Perceived Product Value in E-mail

Advertising

by

Kelsi Nicole Shuey, B.S.

A Thesis

In

HOSPITALITY AND RETAIL MANAGEMENT

Submitted to the Graduate Faculty

of Texas Tech University in

Partial Fulfillment of

the requirements of

the degree of

MASTER OF SCIENCE

Approved

Dr. Catherine Jai

Committee Chair

Dr. Julie Chang

Dr. Mark Sheridan

Dean of the Graduate School

December, 2014

Texas Tech University, Kelsi N. Shuey, December 2014

ii

TABLE OF CONTENTS

ABSTRACT ........................................................................................................... iii

LIST OF TABLES ................................................................................................. iv

LIST OF FIGURES .................................................................................................v

I. INTRODUCTION .............................................................................................1

II. REVIEW OF LITERATURE ............................................................................6

III. METHODS AND PROCEDURES..................................................................21

IV. ANALYSIS AND FINDINGS ........................................................................32

V. DISCUSSION AND IMPLICATIONS ...........................................................48

BIBLIOGRAPHY ...................................................................................................54

APPENDICES

A. TEXAS TECH UNIVERSITY REVIEW BOARD LETTER ..........................59

B. INSTRUCTORS’ PERMISSION FOR CLASS PARTICIPATION.................60

C. RECRUITMENT MESSAGE ...........................................................................61

D. EMAIL MANIPULATIONS ............................................................................62

E. INFORMATION SHEET ..................................................................................67

F. QUALTRICS SURVEY ....................................................................................68


iii

ABSTRACT

This study aims to fill the gap in knowledge by manipulating the discount level

and scarcity in email promotions, affecting four dimensions of perceived product value;

social, emotional, price, and quality, which in turn, influences purchase intention and

positive word of mouth. (N = 207)

This study is based off of the Stimulus- Organism- Response (S-O-R) theory

(Mehrabiann & Russell (1974). The (S-O-R) theory relates features of the email

promotions (S) to the perceived product values; emotional, social, quality, and price (O)

to the approach response behavior which tested by purchase intention and positive word

of mouth (R). The four perceived product values were adapted from Sweeney and Soutar

(2001). The study uses a 2X2 factorial design to manipulate the studying variables;

discount level (high vs. low) and scarcity level (yes or no). The visual stimuli (pictures of

email promotions) were developed by taking screen shots of actual e-mail promotions

from Nike. The discount and scarcity level all had a positive relationship with the

perceived values; emotion, social, quality, and price.

Emotion, social, and price all had a positive relationship with purchase intention

while the perceived quality value did not. Emotion and price values both had a positive

relationship with positive word of mouth, yet quality and social values did not. It is

important for retail marketers to combine both discount and scarcity messages in their

email promotions especially when targeting Generation Y.


iv

LIST OF TABLES

1. Email Promotions 8

2. Scarcity 11

3. Discount promotions 13

4. Product Value 16

5. Approach Response 18

6. Characteristics or Respondents (N = 207) 25

7. Respondents Characteristics of Online Shopping Behaviors 27

8. Internal Reliability of Scale Items 34

9. Correlations Matrix and Descriptive Statistic Variables 35

10. Manipulation Check 36

11. Average Discount Level 36

12. Average Scarcity Level 37

13. Discount level and perceived Emotional Value (H1a) 37

14. Discount level and Perceived Social Value (H1b) 38

15. Discount Level and Perceived Quality Value (H1c) 38

16. Discount level and Perceived Price Value (H1d) 39

17. Scarcity level and Perceived Emotional Value (H2a) 40

18. Scarcity level and Perceived Social Value (H2b) 40

19. Scarcity level and Perceived Quality Value (H2c) 41

20. Scarcity level and Perceived Price Value (H2d) 41

21. Perceived Product Values and Purchase Intent (H3) 43

22. Perceived Product Values and Positive Word of Mouth (H4) 45


v

LIST OF FIGURES

1. Proposed Research Model 20

2. Results of Hypothesis Testing: Email Promotions and Perceived Product Value 42

p < .05*, p < .01**, p < .001***

3. Results of Hypothesis Testing: Perceived Product Value and Approach Response 46

p < .05*, p < .01**, p < .001***


1

CHAPTER I

INTRODUCTION

E-mail promotions are one of the largest marketing tactics in the ecommerce

industry. Consumers receive numerous amounts of e-mails every day from retailers. Most

retailers use cross channel marketing tools to reach their consumer base. Cross channel

marketing is defined as multiple forms of marketing that draws consumers to make a

purchase from a specific brand. These types of marketing channels may include Facebook

advertising, mail out catalogs, e-mail promotions, and twitter. This study focuses only on

one form of cross-channel marketing, that is, e-mail advertising and the effects it has on

consumer purchase intention.

Retail marketers find e-mail promotions an important tactic in today’s world of

marketing. According to recent statistics 78.6% of the U.S. population in 2012 used the

internet (Internet World Stats, 2012). Of the 78.6% that use the internet, 92% of online

users use e-mail on a daily basis. Statistics show that there is a rather large population in

the United States that have the potential to be reached through e-mail advertising and

ultimately make a purchase online. In 2012, ecommerce sales generated $231 billion in

sales and are expected to rise 13% in the coming year. A forecasting trend shows that

online retail sales are expected to hit $370 billion by 2017 (Forrester, 2013). Furthermore,

market data helps retailers and marketers understand trends and analysis of what the future

holds for the ecommerce and marketing industry. This study aims to examine the different

approaches in e-mail advertising and tactics by analyzing three main constructs, namely,


2

consumer’s perception of an email promotion, the concept of scarcity, and discount

promotions and how these constructs influence one another.

Statement of Problem


and scarcity in email promotions, affecting four dimensions of perceived product value;

social, emotional, price, and quality, which in turn, influences purchase intention and

positive word of mouth.

Data Collection

The data were collected using a link to Qualtrics, an online survey website. The

survey was distributed through email and social media. The questionnaire included seven

sections. The first section includes an information sheet describing the survey and its

benefits to retail marketers. Section two refers to email and online shopping behaviors to

help the researcher and marketers understand how generation Y consumers shop online.

Section three consists of a pre-test; to test the four conditions quality, emotion, price, and

social value. The items tested were adopted from the research article written by Sweeney

and Soutar (2001). Section four consists of the experimental conditions that are used to

test the effects of scarcity and discount level. The researcher created the email promotions

through Power Point and Photoshop. Section five is made up of questions to examine the

manipulation check of the two-by-two experimental design. Section six tests the four

conditions; quality, emotion, price, and social value. The items tested were adopted from

the researcher’s article written by Sweeney and Soutar (2001). Section 7 is the “get to

know you” section. Allowing the researcher to collect demographic information to help

understand how generation Y are affected by email promotions.


3

Hypotheses

The following research hypotheses were developed to test the research objectives:

H1a: The discount level in email promotions will have a significant influence on

consumer’s perception on emotional value.

H1b: The discount level in email promotions will have a lower significance on consumer’s

perception of social value.

H1c: The discount level in email promotions will have a lower significance on consumer’s

perception on quality value.

H1d: The discount level in email promotions will have a significant influence on

consumer’s perception of price value.

H2a: The scarcity level in email promotions will have a significant influence on

consumer’s perception of emotional value.

H2b: The scarcity level in email promotions will have a significant influence on

consumer’s perception of social value.

H2c: The scarcity level in email promotions will have a significant influence on

consumer’s perception of quality value.

H2d: The scarcity level in email promotions will have a lower significant influence on


H3: The perceived product values; a) emotional, b) social, c) quality, and d) price will

have a significant influence on purchase intention.


4


have a significant influence on positive word–of–mouth.

Limitations

The primary limitation associated with this research study was the data were

collected using the convenience non probability sampling method. Because this method of

data collection was used the study might not be generalizable to the entire Generation Y

population. The sample size is small representation of Generation Y males and Females in

the state of Texas. Furthermore, race and ethnic diversity was also a limitation, as this was

not included in the researcher’s survey.


5

Definition of Key Terms

Email Promotions: Maric and Stojanovic (2008) defined e-mail marketing as “a form of

direct marketing, which uses electronic mail as a means of communicating commercial

messages to an audience” (p. 3).

Scarcity: “Producing a sense of thrill in certain consumers, causing them an urgent desire

to purchase a product” (Wu, Lu, Wu, & Fu, 2012, p. 263) For the purpose of this study we

used time to manipulate the scarcity level.

Discount Promotions: For the purpose of this study discount promotions are a percentage

off a product displayed in an email promotions*. (High discount = 50%; Low Discount =

25%)

Product Values: For the purpose of this study product values are defined as emotional,

social, quality and price values, which were adapted from Sweeney and Soutar (2001).

Word-of-Mouth: Communicating positive attributes about product information from one

consumer to another*.

Purchase Intention: A plan to purchase a particular good or service in the future

Note: Definition defined by the researcher is noted with by an asterisk (*)


6

CHAPTER II

REVIEW OF LITERATURE

Introduction

This chapter investigates prior research and introduces topics that explains why

email promotions are heavily used in advertising and how discount levels and scarcity

levels have an influence on the perceived product value. This chapter includes information

on email promotions, scarcity, discount promotions, product value, and the approach

response. This chapter also explains the S-O-R theoretical framework behind the study.

Email Promotion

Maric and Stojanovic (2008) defined e-mail marketing as “a form of direct

marketing, which uses electronic mail as a means of communicating commercial messages

to an audience” (p. 3).The authors further explain that e-mail marketing is sending e-mails

to current and potential customers to either gain repeat business or new business through

advertisements. Previous research has found that e-mail marketing plays a critical role in

maintaining and accumulating customer relationships (Patwardhan & Patwardhan, 2004).

Pavlov, Melville, and Plice (2008) present that e-mail marketing is among the top

performers in internet advertising campaigns due to producing twice the return on

investment. Research reported that there are many reasons why internet marketing and

specifically email promotions have increased in popularity over the last decade.

First, e-mail marketing has a significantly lower cost than direct mail

advertisement. Second, consumers have a faster response rate to an e-mail promotion in


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comparison to a mail-out promotion (Martin, Durme, Raulas, & Merisavo, 2003). Gartner

(2002) found that consumers react within 10 days to an e-mail promotion in comparison to

six weeks when marketing with direct mail promotion. Third, e-mail promotions

encourage consumers to interact with the company by including hyperlinks in promotion.

Marketers set up hyperlinks and are an invitation for consumers to visit the e-tailers

website and engage in their promotion (Martin et al., 2003).

There are multiple approaches when creating an e-mail promotion. Previous

research has investigated how pictures versus words have a crucial impact on how

advertisements are processed and retained (Lewis, Whitler, & Hoegg, 2013). Different

studies provide inconsistent results on which approach is more effective when it comes to

translating in store sales. This study aims to evaluate how pictures and words are

translated into the concept of scarcity and discount promotions, and these two constructs

will measure the consumers perceived product value. There are little experimental studies

that have researched “downstream” effects of promotion formats (Lewis et al., 2013).

Thus, consumer habits and frequencies have the potential to lead companies to

customizable promotions by tailoring them to fit the needs of the consumer (Rust &

Verhoef, 2005). Lewis (2013) presents that promotion content and layout receive less

attention in their study, yet these aspects of marketing have been proven to have a rather

large impact on consumer reaction. Therefore, the design of e-mail promotions has the

potential to translate positively to consumers. If a promotion is communicated correctly

marketing strategies can ultimately promote the idea of scarcity. Ultimately this study

aims to see if the content of the promotion affects the way a consumer reacts to a


8

promotional advertisement via e-mail. Table 1 presents a summary of recent research

focused on email promotions. The table includes the citation, the sample, and a summary

of findings.

Table 1. Email Promotions Article Sample Summary

Lewis, M., Whitler, K. A., &

Hoegg, J. (2013). Customer

Relationship Stage and the use of

picture-dominant versus text-

dominant advertising: A field

study. Journal of Retailing, 89(3),

263-280.

doi:10.1016/j.jretai.2013.01.003

The prospective customer

test was sent to 34,563 and

the experienced customer

test was sent to 17,984

users.

Emailing and email

response rates in picture

VS: text dominate

Martin, B. S., Van Durme, J.,

Raulas, M., & Merisavo, M.

(2003). Email advertising:

Exploratory insights from Finland.

Journal of Advertising Research,

43(3), 293-300.

Surveyed 2,200 people; 839

valid sample size;

perceptions of e-mail

advertising usefulness, level

of interest generated by e-

mail promotions, amount of

e-mail advertising received

by the respondent, website

visits, store visits, reason for

store visits inspired by e-

mail advertisements

1. E-mail content that

makes an e-mail useful;

Special sales offerings 2.

Amount of e-mails

Patwardhan, P., & Patwardhan, H.

(2005). An analysis of senior U.S.

advertising executives' perceptions

of internet communication

benefits. Journal of Website

Promotion, 1(3), 21-39.

doi:10.1300/J238v01n0303

Surveyed 145 senior

advertising agency

executives in the United

States. RQ1 in the

questionnaire evaluated to

their perceptions to how

beneficial the internet is.

Investigates advertising

professionals and their

attitude and opinions

about internet marketing.

They looked at

communication efficiency

and the recommendations

to clients on web usage.


9

Scarcity

Scarcity is defined as “producing a sense of thrill in certain consumers, causing

them an urgent desire to purchase a product” (Wu, Lu, Wu, & Fu, 2012, p. 263) the

scarcer a product is, the more consumers perceive it a desirable product (Verhallen &

Robben, 1994). Famous designers such as Louis Vuitton and Hermes have found a niche

in creating scarcity, this idea has driven the concept of scarcity in the retail industry (Wu

et al., 2012). The companies portray the concept by only manufacturing or producing a

limited quantity of products at a time, making luxury handbags seem like a limited edition

necessity. Scarcity is able to influence the perceived value of merchandise and

opportunities.

The theory of commodity explains the theoretical approach of scarcity, which

explains, "any commodity will be valued to the extent that is it unavailable" (Brock, 1968,

p. 263). One underlying cause of this effect is consumers’ desire for exclusive uncommon

goods. Therefore, scarcity is developed by low supply instead of high demand (Eisend,

2008). Previous research has found that consumers partake in "bandwagon reasoning"

allowing perception of demand to determine a products worth, leading to the belief that a

scarce product in high demand must be a quality product. If the concept of “bandwagon

reason” is found to be valid, consumers may feel the need to follow the pattern of other

consumers (Ku, Kuo, & Kuo, 2012). The concept of "bandwagon reasoning" has a direct

relationship on the effect of scarcity, perceived scarcity, and assumed expensiveness.

Due to the limited supply of products, the price may increase (Wu et al., 2012).

Lynn (1992) proposed the idea of the Scarcity-Expensiveness-Desirability (S-E-D) model,


10

which says that the general population believes that scarce products have a higher value,

and a higher value insinuates a greater quality. The connection between the assumed

expensiveness of a product and scarcity has an association with desirability. Furthermore,

knowing the above research, marketers view the effect of scarcity as a critical strategy in

the marketing industry. Marketing professionals may choose to communicate scarcity by

advertising an exclusive slogan “limited edition,” making the targeted product have a

sense of value (Ku et al., 2012). Other marketing strategists might market products by

advertising the slogan “limit one per customer,” “only while supplies last,” or “limited

time only” (Eisend, 2008).

Previous research shows that the effect of scarcity has a significant role in

advertising and consumers perceived value of the product. This is particularly important to

this study to see if emphasizing the desirability of a product will have a significant impact

on the consumer and their perceived value of the product. Therefore, the value of the

product can also be associated wi0th the price or discount level presented. Table 2

presents a summary of recent research focused on the impact of scarcity on purchase

intention. The table includes the citation, the sample, and a summary of findings.


11

Table 2. Scarcity Article Sample Summary

Eisend, M. (2008). Explaining

the impact of scarcity appeals

in advertising. Journal of

Advertising, 37(3), 33-40.

Tested by means of

Experiment with a between

two subjects design. Printed

scenarios were used to

manipulate scarcity. All

other variables were

measured by a questionnaire.

There were 110

undergraduate participants

attending marketing classes.

Value Perception was

measured with three, seven

point scale. Involvement was

measured with five, seven

point scales. Purchase

Intention

Ku, H., Kuo, C., &Kuo, T.

(2012). The Effect of scarcity

on the purchase intentions of

prevention and promotion

motivated consumers.

Psychology & Marketing,

29(8), 541-548.

doi:10.1002/mar.20541

The researcher collected 337

responses; the participants

took a survey on the

attitudes towards

wristwatches. Stimulus and

manipulations

Perceived Scarcity, Assumed

Expensiveness, Perceived

Quality,

Wu, W., Lu, H., Wu, Y., & Fu,

C. (2012).The effects of

product scarcity and

consumers' need for uniqueness

on purchase intention.

International Journal of

Consumer Studies, 36(3), 263-

274. doi:10.1111/j.1470-

6431.2011.01000.x

A random sampling survey

was distributed to 339

people in Taiwan, only 289

surveys were valid

Perceived Scarcity –

Assumed Expensiveness,

Perceived Scarcity –

Perceived Uniqueness,

Perceived Value – Purchase

Intention

Wu, C., & Hsing, S. S. (2006).

Less is more: How scarcity

influences consumers' value

perceptions and purchase

intents through mediating

variables. Journal of American

Academy of Business, 9(2),

125-32.

337 college students were

invited to participate in the

study. Were given a booklet

containing a questionnaire

Perceived Scarcity, Assumed

Expensiveness, Perceived

Quality,


12

Discount Promotions

Promotions connected to a price discount have been found to generate motivational

effect on the buyer rather than just a cost-effective value on the amount of money saved

(Schindler, 2013). An example of this would include grocery store coupons that promote

fifty cents off a product, which leads to the existence of “coupon queens”. This idea is also

prevalent among the airline industry as frequent flyer miles are a motivating factor for

consumers. As for retailers applying a price reduction, companies lean to a certain tactic.

Marketers have created several ways of implementing discounts, the first way is

presenting a reduced dollar amount ($ off), an example of this would be (i.e., $20 off your

next purchase). Another strategy would include a percentage (% off), for example

marketing products by (i.e., 20% off). A third strategy would be to use a combination of

both methods (Bitta, Monroe, & McGinnis, 1998).

Furthermore, retailers are ultimately in control of who receives coupons. For

example, retailers can distribute a coupon to a variety of potential consumer or distribute

them to an exclusive sub–category of frequent consumers. In order for retailers to

competitively compete in a cost efficient world, it is crucial for companies to stress the

value of each promotion (Chen, Monroe, & Lou, 1998). Research has found that

customers purchasing habits are built on the consumers’ perception of value. When

retailers offer a discount using price promotions, they are ultimately lowering the price of

the sale and customers are able to receive the reduced price (Chen et al., 1998). Retailers

are in fact lowering the perceived quality of the product if the price has been reduced too

low. This study aims to look at the combination of both the effects of scarcity and discount


13

promotions to see at what point consumers value the products they are engaging in and

purchasing.

This study also looks to see if the manipulation of the content has a direct

influence to the perceived product value. Table 3 presents a summary of recent research

focused on discount promotions. The table includes the citation, the sample, and a

summary of findings.

Table 3. Discount Promotions

Product Value

Price promotions are a popular tactic used by marketers as a form of sales

promotions within the retail environment (Darke & Chung, 2005). Within previous

decades, research shows that there has been a significant increase in the number of

coupons distributed by manufacturers. Between 1963 and 1986 the number of price

Article Sample Summary

Chen, S. F. S., Monroe, K. B.,

& Lou, Y. C. (1998). The

effects of framing price

promotion messages on

consumers' perceptions and

purchase intentions. Journal

of Retailing, 74(3), 353-372.

119 business undergraduate

students participated in a 2 x

2 x 2 between subjects

sampling. The stimuli that

was used in the experiment

was a booklet.

High Price Vs: Low Price.

Promotion types,

Presentation forms

Schindler, R. M. (1998).

Consequences of perceiving

oneself as responsible for

obtaining a discount:

Evidence for smart-shopper

feelings. Journal of

Consumer Psychology, 7(4),

371-392.

A questionnaire was

distributed to 202 women in a

group setting.

Price Satisfaction, Others

Told, Store Again, Brand

Again


14

reductions in department stores grew from 6% to 19%, between 1976 and 2000 research

shows that price reductions quadrupled more than 19%.

In a majority of cases price discounts have been the dominant tactic for marketers,

therefore consumers have become alert to retailers promotions and are often expecting

price cuts, which could lead to a reduction in product value (Hardesty & Bearden, 2003).

On the contrary, some scholars conclude that price discounts have led to a significant

increase in consumer perceptions of value such as brand and quality. Multichannel

shopping has expanded over the last ten years in which retailers are now feel they offer a

variety of different shopping experiences (Mathwick, Malhorta, & Ridgdon, 2000).

Retailers have been seen as redefining their businesses as a place that memories happen

rather than just selling goods and services, as an “experience stager” instead of just a

“service provider”. Woodruff explains that many businesses have created a standard for

providing customer satisfaction through goals and strategies, but only few have

consistently measured their customer satisfaction (Dutka, 1994). For the companies who

do measure their customer service management (CSM) satisfaction, many do not execute

the results associated with CSM.

In a study conducted by Sweeney and Soutar (2001) they measured consumer

perceived value. Throughout the course of the study they concluded four distinct value

dimensions, which include emotional, social, quality, and price value. If research proves

true that consumers are “value driven”, then leaders in the organization must understand

what their customer’s value, and where the focus should to achieve a competitive

advantage in the market place (Levy, 1999; Woodruff ,1997) The researcher states sales


15

promotions are often used by retail marketers to help improve the customers perception in

relation to the value of their products, thus leading to an increase in sales volume for

retailers (Teng, 2007).

Zeithaml has recommended that “perceived value could be regarded as a

consumer’s overall assessment of the utility of a product” (1988, pg.14). There are two

components, quality and price in which both have diverse effects on the perception of

value for money. In previous research, arguments have been made that consumers

perceive value as a low price but others believe that that consumers perceive value when

quality and price are recognized as being balanced (Sweeney & Soutar, 2001). Previous

researchers have argued that “the only thing that matters in the new world of quality is

delivering customer value”. Even though there has been little substantial research that

addresses the value construct in the retailing industry and the way consumers assess

products and services before buying (Sweeney & Soutar, 2001). Table 4 presents a

summary of recent research focused on product value. The table includes the citation, the

sample, and a summary of findings.


16

Table 4. Product Value Article Sample Summary

Mathwick, C., Malhotra, N., &

Rigdon, E. (2001). Experiential

value: Conceptualization,

measurement and application in

the catalog and Internet

shopping environment. Journal

of Retailing, 77(1), 39-56.

Data were collected from a

national sample of users of

catalog and Internet

customers through mail. 515

questionnaires were returned

and useable.

Efficiency, Economic Value,

Visual Appeal, Entertain,

Escapism, Enjoyment,

Excellence, and Economic

Value

Sweeney, J. C., & Soutar, G. N.

(2001). Consumer perceived

value: The development of a

multiple item scale. Journal of

Retailing, 77(2), 203-220.

The first phase included six

focus groups, each group

contained ten people. A total

of 273 third year/

postgraduate students

participated in the third

quantitative stage.

Emotional Value, Social

Value, Price value, Quality

Value

Teng, L. (2009). A comparison

of two types of price discounts

in shifting consumers' attitudes

and purchase

intentions. Journal of Business

Research, 62(1), 14-21.

A sample size of 206

respondent’s .Three phase

study was conducted through

interviews and self-

administered surveys to

Chinese consumers.

Two different types of price

discounts 1) a price discount

with and 2) a discount

without a minimum

purchase amount.

Woodruff, R. B. (1997).

Customer value: The next

source for competitive

advantage. Journal of the

Academy of Marketing

Science, 25(2), 139-153.

A developed framework of

literature.

A framework of literature

discussing ways that

businesses can improve their

customer satisfaction

measurement (CSM).

Approach Response

Research states that it is five times more expensive to recruit new customers than

to try and retain current customers (Hart, Heskett, & Sasser, 1990). Word of mouth

(WOM) focuses on the effects consumers’ gratification and dissatisfactions relating to past

purchases from retailers (Brown, Barry, Dacin, & Gunst, 2005). Not only does is have a

role in past purchases but also plays an imperative role in in shaping consumers attitudes

and behaviors. In recent studies of relationship marketing, WOM has been noted as “a

dominant force in the marketplace” (Brown et al. 2005). Consumer’s perceptions of a


17

product or brand can either be communicated to others positively or negatively, which can

have a direct influence with WOM and purchase intent. Previous researchers suggest that

consumers in which associate with a specific brand or product are more likely to provide,

promote, and support the brand or product to their friends and family (Ahearne et al.,

2005; Algescheimer et al., 2005, Bhattacharya & Sen, 2003) .Table 5 presents a summary

of recent research focused approach response. The table includes the citation, the sample,

and a summary of findings.


18

Table 5. Approach Response

Article Sample Summary

Brown, T. J., Barry, T. E., Dacin, P. A.,

& Gunst, R. F. (2005). Spreading the

word: Investigating antecedents of

consumers’ positive word-of-mouth

intentions and behaviors in a retailing

context. Journal of the Academy of

Marketing Science, 33(2), 123-138.

Collected data through

two mail out surveys

through random

sampling. The

researcher sent out a

post survey to the same

respondents three

months later. 397

surveys were received

for the first survey and

147 surveys for the

follow up survey.

Identification,

Automobile

satisfaction, Dealership

satisfaction,

Commitment, and

WOM.

Tuškej, U., Golob, U., & Podnar, K.

(2013). The role of consumer–brand

identification in building brand

relationships. Journal of Business

Research, 66(1), 53-59.

doi.org/10.1016/j.jbusres.2011.07.022

Web based

questionnaire, non-

probability snow ball

sampling in two stages.

596 respondents were

reached through

Facebook and email.

Value Congruity,

Consumer’

Identification, Brand

Commitment, WOM

Maxham III, J. G. (2001). Service

recovery's influence on consumer

satisfaction, positive word-of-

mouth, and purchase

Intentions. Journal of Business

Research, 54(1), 11-24.

doi.org/10.1016/S0148-

2963(00)00114-4

Pre-test and post-test

between subjects

experimental design

was developed. 32

undergraduate

respondents.

Focal Service,

Consumer Involvement,

satisfaction, Purchase

Intent, and WOM


19

Theoretical Model

According to Mehrabian and Russell (1974), consumers are impacted physically

and emotionally by the social and physical environment. Thus, understanding the

relationship between people and the different types of environments which include many

types of emotions is a difficult task requiring an established and trustworthy framework.

Therefore, Mehrabian and Russell (1974) developed a model to measure consumer’s

internal emotions and the association between the environmental stimulus and individual

response, which is known as the stimulus-organism-response (SOR) model. The SOR

model has been established for use in the field of environmental psychology, the SOR

model has applied in the study of consumer behavior. Recent Studies show that the SOR

model is useful in examining online consumer responses and behavior, and consumer

response to atmospheric cues in online and in-store environments (Eroglu, Machleit, &

Davis, 2001; Manganari et al., 2009; Mummalaneni, 2005; Sherman, Mathur, & Smith,

1997).

This study is based off of the Stimulus- Organism- Response (S-O-R) theory

(Mehrabiann & Russell (1974). The S-O-R theory relates features of the email promotions

(S) to the perceived product values; emotional, social, quality, and price (O) to the

approach response behavior which tested by purchase intention and positive word of

mouth (R). The four perceived product values were adapted from Sweeney and Soutar

(2001). The proposed research model is provided in figure 1.


20

Figure 1. Proposed Research Model

Summary

This chapter explains the effect of how email promotions can significantly

influence sales and the perceived product value that is directly associated with discount

promotions and the scarcity level. There are many product values that can influence

positive word-of-mouth and purchase intention. In this study the researcher looked

specifically at emotional, social, quality and price vales, which were adopted from

Sweeney & Soutar (2001). The stimulus-organism-response theory was defined and

explained. The idea for this study have been explained by the stimulus-organism-response

(SOR) theory as well as prior research discussed in this chapter.


21

CHAPTER III

METHODS AND PROCEDURES

Introduction

This chapter discusses the statement of problem and hypotheses; it describes the

recruitment and sample demographics of the participants, the instrumentation that was

used and the research design behind this study. A brief description of the data collection

and analysis are mentioned in this chapter, but will be discussed in greater detail in

chapter four.

Statement of Problem


and scarcity in email promotions, in which affects four dimensions of perceived product

value; emotional, social, quality and price, thus, leads to purchase intention and positive

word of mouth.

Research Hypotheses

H1a: The discount level in email promotions will have a significant influence on

consumer’s perception on emotional value.

H1b: The discount level in email promotions will have a lower significance on consumer’s

perception of social value.

H1c: The discount level in email promotions will have a lower significance on consumer’s

perception on quality value


22

H1d: The discount level in email promotions will have a significant influence on


H2a: The scarcity level in email promotions will have a significant influence on

consumer’s perception of emotional value.

H2b: The scarcity level in email promotions will have a significant influence on


H2c: The scarcity level in email promotions will have a significant influence on


H2d: The scarcity level in email promotions will have a lower significant influence on



have a significant influence on purchase intent


have a significant influence on positive word-of-mouth.


23

Method

Stimulus Development

The visual stimuli (pictures of email promotions) were developed by taking screen

shots of actual e-mail promotions from Nike. E-mails were adapted from Nike due to their

universal brand, relating to both males and females. Nike has also has created a brand that

is easily recognizable and worn by generation Y. The study uses a 2X2 factorial design to

manipulate the studying variables; discount level (high vs. low) and scarcity level (yes or

no). The researcher chose this option to avoid any distractions for the participants and to

maintain consistency throughout all eight manipulations. Consistencies of the eight

conditions were achieved using the programs Photoshop, Paint, and PowerPoint. Once the

e-mail was manipulated, the researcher than chose one picture targeting females and one

picture targeting males and replaced in the body of the e-mail.

Sample

The population of interest is male and females who receive e-mail promotions

from retailers within the Texas Tech University student body system and surrounding

community, ranging in ages eighteen to thirty years of age, targeting generation Y

specifically. The sample size for this study was two hundred and seven (155 females and

52 males) in order to obtain an adequate number of responses for data analysis. The

survey was distributed by e-mail and on social media sites. An announcement was made in

multiple undergraduate and graduate classes in the College of Human Sciences at Texas


24

Tech University. Due to the limitations of time restrictions on this study and the

population, the researcher used the convenience and non-probability approach.

The researcher sent an email to selected class instructors in The College of Human

Sciences to get permission about data collection in their classrooms. After getting

instructors’ permission to conduct data collection, the researcher sent a manuscript to each

instructor (see Appendix C) about the survey. The instructor asked potential participants to

complete the questionnaire if they were interested in participating in the research study.

Extra credit was provided in some classes for their survey participation which was given

at the instructor’s digression. For participants outside of those select classes, the surveys

lead them to enter their e-mail address for a chance to win a gift card to Starbucks. The

researcher purchased twenty gift cards valued at $10.00 a piece for participants to have a

chance to win.

The researcher began the data collection process after the IRB proposal was

approved on April 15, 2014. A copy of the approval letter is found in Appendix A.

The study was conducted over a four week time in order to collect enough data to

statistically analyze. The survey was sent out through e-mail and social media

announcements i.e. Facebook. An announcement was made in multiple undergraduate and

graduate classes in the College of Human Sciences at Texas Tech University. A copy of

the announcement is found in Appendix B. The researcher included a confidentiality

disclaimer in every announcement and at the beginning of the online survey. The

participants were notified that the research personnel will use the data collected strictly for

research analysis.


25

Demographic Characteristics

Table 6 summarizes the demographic characteristics of the two hundred and seven

respondents (N=207). Seventy five percent of the surveyed respondents were women

(155) and twenty five percent were male (52). Approximately 31% were aged 18 years to

20 years, 46% were aged 21 years to 24 years, and 23% were aged 25 years to 30 years.

The education level ranged from some college (76%), bachelor’s degree (11%),

associate’s degree (8%), and high school diploma/GED (3%). The majority of the

respondents (87%) income level was less than $20,000, 6% was between $20,000 and

$30,000, and 3% was above $60,000.

Table 6. Characteristics of Respondents (N=207)

Characteristics Percentage

Gender Male 25.10

Female 74.90

Age 18 – 20 31.40

21 – 24 45.90

25 – 30 22.80

Missing 17.90

Classification High School Diploma / GED 2.90

Some College 76.30

Associate Degree 7.70

Bachelor’s Degree 11.10

Postgraduate Degree 1.00

Missing 1.00

Income > $20,000 87.00

$20,000 - $30,000 6.30

$30,000 - $40,000 1.40

$40,000 - 50,000 1.00

$50,000 - $60,000 0.50

< $60,000 2.90

Missing 1.00


26

Table 7 summarizes the shopping frequencies of the two hundred and seven

respondents (N=207). Of the total respondents 40% of the respondents said they made a

purchase online less than once a month, 28% once a month, 22% said 2-3 times a month,

5% responded with never, 4% once a week, and 2% 2-3 times a week. The majority of

respondents (81%) receive email promotions from retailers. Thirty-two percent of the

respondents shop online or in store less than once a month after receiving an email

promotion, 20% once a month, 13% 2-3 times a week, 7% never, 3% daily and 2% 2-3

times a week. Ninety-one percent of the respondents prefer receiving discount promotions,

41% prefer new product information, 40% prefer promotional events, and 27% prefer

receiving latest trends. 31% of the respondents check their email daily on their computer,

30% multiple times per day, 23% check it weekly, 4% check it once a month, and 3%

never check it. 49% of the respondents never check their emails on their tablets, 12%

check it weekly, 11% check it multiple times per day, 9% check it daily, and 6% check it

twice a month. 68% of the respondents check their email on their smart phones multiple

times per day, 20% check it daily, 6% check it weekly, and 2% either check it twice a

month or never.


27

Table 7. Respondents Characteristics of Online Shopping and Email Shopping

Behaviors

Characteristics Percentage

Shopping Purchases made online Never 4.80

Less than Once a Month 39.60

Once a Month 27.50

2-3 Times a Month 22.20

Once a Week 3.90

2-3 Times a Week 1.90

Do you receive promotional emails

from retailers? Yes 81.20

No 18.80

How often do you shop on line or

in store after receiving an email? Never 7.20

Less than Once a Month 31.90

Once a Month 20.30

2-3 Times a Month 13.00

Once a Week 2.90

2-3 Times a Week 2.40

Daily 3.40

Email Promotions New Product Information 40.60

Discount Promotions 91.30

Promotional Events 40.10

Latest Trends 26.60

How often do you check your

email on your computer? Never 2.90

Once a Month 4.30

Twice a Month 7.20

Weekly 23.20

Daily 31.40

Multiple Times a Day 30.40


email on your IPad/Tablet? Never 49.30

Once a Month 4.80

Twice a Month 5.80

Weekly 11.60

Daily 9.20



28

Table 7. Continued


email on your smart phone?

Never

1.40

Once a Month 1.90

Twice a Month 1.40

Weekly 6.30

Daily 20.30


Instrumentation

The data were collected using a link to Qualtrics, an online survey website. The

survey was distributed through email and social media. The questionnaire included seven

sections. The first section includes an information sheet describing the survey and its

benefits to retail marketers. Section two refers to email and online shopping behaviors to

help the researcher and marketers understand how generation Y consumers shop online.

Section three consists of a pre-test; to test the four conditions emotion, social, quality, and

price values. The items tested were adopted from the research article written by Sweeney

& Soutar (2001). Section four consists of the experimental conditions that are used to test

the effects of scarcity and discount level. The researcher created the email promotions

through power point and photo shop. Section five is made up of questions to examine the

manipulation check of the two by two-experimental design. Section six tests the four

conditions quality, emotion, price, and social value. The items tested were adopted from

the researcher’s article written by Sweeney & Soutar (2001). Section 7 is the “get to know

you” section. Allowing the researcher to collect demographic information to help

understand how generation Y are affected by email promotions.


29

Research Design

Before this study could go any further, a research proposal had to be submitted to

the Texas Tech University Institutional Review Board. The proposal included five

sections including: rationale, subjects, procedures, risks and liability, and benefits.

Consent forms were not needed for the purpose of this study. After careful review of the

submitted research proposal, Texas Tech University Protection of Human Subjects

Committee approved the submitted proposal (Appendix A). Once the IRB was approved

the research procedures were approved to continue.

Before any research could be conducted, a proposal meeting had to take place to

ensure the success of the study. In the proposal meeting a PowerPoint had been prepared

to present the review of literature, theoretical framework, hypotheses, and the proposed

methodology. This information was presented to the thesis chair and committee member,

which followed critical feedback and discussion to prepare the procedures in this study.

The committee signed and approved the proposed research study. The researcher then

made changes that were necessary for the research procedures to continue.

Once the participants were linked to the survey URL

(https://ttuhumansciences.qualtrics.com/SE/?SID=SV_2cui9y7N5pIbtUF), an

information page was displayed before the survey was conducted (Appendix D) The

research information sheet explained the research topic and the protection of

confidentiality in participating in the research study. The participants were able to

complete the survey at their own pace and were allowed to exit the survey during any

https://ttuhumansciences.qualtrics.com/SE/?SID=SV_2cui9y7N5pIbtUF


30

point if they felt uncomfortable or wished to not participate. This study did not involve

any physical or psychological risks.

Within the online survey a number of different items were measured within the

series of questions. The first set of questions was developed to better understand the

respondents shopping frequencies based off of email promotions. The second section of

the online survey was developed as a pretest. The pretest measured the respondent’s

perceived product value of Nike products. The perceived product values that were

measured were emotional, social, quality and price value. The items were adapted from

several scales in the marketing scales handbook created by Bruner and Hensel (1992).

All the items were measured using a 7-point likert scale from 1 (strongly disagree) to 7

(strongly agree). Once the pretest was tested the respondents each viewed a manipulated

email promotion based off of their gender that they selected in section one of the survey.

The surveys settings were set to evenly distribute the eight conditions that were created

based off of the respondents gender. After the respondents viewed the email they were

then asked a series of questions to test the manipulation of the email. The respondents

were then asked a series of questions as a post test. The series of questions measured the

respondents perceived product value of Nike products after viewing the email

promotions. The perceived product values there were measured were emotional, social,

quality, and price value. The items were adapted from several scales in the marketing

scales handbook created by Bruner and Hensel (1972). The last section was made up of

demographic questions to help make a generalization of the population sampled.


31

Data Analysis

Once the survey was closed the data collected were analyzed using a statistical

software called SPSS. Tests and statistics used in the analysis and results were

descriptive tests that helped to identify the respondent’s demographic information and

shopping frequencies. An analysis of the internal reliability were ran to verify that the

items used were an accurate measure of the scales tested (i.e., emotional, social, quality,

price, discount level, scarcity level, purchase intention and positive word – of – mouth).

Linear regression was then performed which measured each item, (i.e., emotional, social,

quality, and price) to determine the relationship and significance that discount level and

scarcity level had on each perceived product value. Another linear regression was ran to

determine the relationship of the perceived product values and how they influence

purchase intention and positive word of mouth. The above tests and analysis were used

to answer the studies hypotheses, which are discussed in full detail in chapter four.

Summary

In this chapter the research hypotheses were discussed by the research method. The

research method included information about the sample, the survey tool in which was used

(Qualtrics), recruitment, and the final sample demographics. The data analysis process of

the final study was briefly discussed but will be discussed in further detail in the following

chapter.


32

CHAPTER IV

ANALYSIS AND FINDINGS

Introduction

The data were analyzed in IBM SPSS Statistics, a statistical software program.

Descriptive statistics, reliability, computing Cronbach’s alpha, ANOVA, and linear

regression all took part in this study’s analysis of data. The quantitative data analysis

software helped to organize and compute data in an accurate way. The items used and

tested for this study were based on that of a previous study (Sweeney & Soutar, 2001).

The measures of the research hypothesis include a pre-test, manipulation check, and post-

test.

Data Screening and Assumption Testing

Prior to model testing, data were tested for unvariate/multivariate outliers and

assumptions using SPSS. Out of 289 responses, six cases were deleted first due to the

incompleteness. There were no univariate outliers detected and no violations of

assumptions; however, 76 responses were deleted from the social media data collection

due to their ages skewing the data results. This resulted in a sample of 207 used for model

testing. Each of the eight conditions were evenly distributed through Qualtrics software.

Condition one was seen and distributed to thirteen males, respondents who were

exposed to this condition were presented with an email promotion that revealed high

discount level (50%) and high scarcity (3 Days Only). Condition two was seen and

distributed to thirteen males, respondents who were exposed to this condition were

presented with an email promotions that revealed high discount level (50%) and no


33

scarcity. Condition three was seen and distributed to fourteen males, respondents who

were exposed to this condition were presented with an email promotion that revealed low

discount level (25%) and high scarcity (3 Days Only). Condition four was seen and

distributed to twelve males, respondents who were exposed to this condition were

presented with an email promotions that revealed a low discount level (25%) and no

scarcity.

Condition five was seen and distributed to forty females, respondents who were

exposed to this condition were presented with an email promotion that revealed a high

discount level (50%) and high scarcity (3 Days Only). Condition six was seen and

distributed to thirty eight females, respondents who were exposed to this condition were

presented with an email promotion that revealed a low discount level (25%) and high

scarcity (3 Days Only). Condition seven was seen and distributed to thirty-nine females,

respondents who were exposed to this condition were presented with and email promotion

that revealed a low discount level (25%) and no scarcity. Condition eight was seen and

distributed to thirty-eight females, respondents who were exposed to this condition were

presented with an email promotion that revealed a high discount level (50%) and no

scarcity.

The preliminary step of the data analysis was to screen the data to find missing

values, outliers, and determine the internal reliability. Once the internal reliability was

confirmed, the scale items were averaged for further analyses. Cronbach’s alpha was

performed to determine the reliability of each scale used in this study. The critical alpha


34

level for each of the scales was above .94 indicating a high level of reliability. Table 8

presents the internal reliability of the scale items.

Table 8. Internal Reliability of Scale Items

Variable Code Items Cronbach's

alpha

Discount Level

Dis_1

Dis_2

Dis_3

The product offers good value for its money

The expected price for the product is

acceptable

The product appears to be a good bargain

0.92

Scarcity Level Scar_1

Scar_2

Scar_3

The availability of the product is limited

The product is a limited edition product

The product is scarce

0.87

Emotion

(Sweeney, J.

C., & Soutar,

G. N. 2001)

Emo_1

Emo_2

Emo_3

Emo_4

I feel Nike's products are products that I

would enjoy

I feel Nike's products make me want to use

them

I feel Nike's products are products that I

would feel comfortable using

I feel Nike's products give me pleasure

0.96

Social

(Sweeney, J.

C., & Soutar,

G. N. 2001)

Social_1

Social_2

Social_3

Social_4

I feel Nike's products help me feel acceptable

I feel Nike's products improve the way I am

perceived

I feel Nike's products make a good

impression on other people

I feel Nike's products give me social approval

0.99

Quality

(Sweeney, J.

C., & Soutar,

G. N. 2001)

Qual_1

Qual_2

Qual_3

Qual_4

I feel Nike's products have consistent quality

I feel Nike's products are well made

I feel Nike's products have an acceptable

standard of quality

I feel Nike's products give me pleasure

0.98

Price

(Sweeney, J.

C., & Soutar,

G. N. 2001)

Price_1

Price_2

Price_3

Price_4

I feel Nike's products are reasonably priced

I feel Nike's products offer value for the price

I feel Nike's products offer good products for

the price

I feel Nike's products perform consistently

0.96

Purchase

Intention

PI_1

PI_2

PI_3

It is very likely that I will purchase from

Nike

I will purchase Nike products the next time I

need athletic wear

I will go to Nike.com to check out other

products

0.94


35

PI_4

I will purchase products from Nike, in store

or online

Word of

Mouth

WOM_1

WOM_2

WOM_3

Spread positive word of mouth about Nike

products

Tell your family and friends about Nike's

products

Recommend Nike products to your friends

and family

0.97

Correlations between the six variables are presented in Table 9. The correlations

for each of the variables was positive and significant at the p < 0.01 level. Those variables

are quality, emotion, price, social, word of mouth, and purchase intention which is

presented in Table 9.

Table 9. Correlation matrix and descriptive statistics of variables

Variable Mean S.D. Quality Emotion Price Social WOM PI

Quality 5.52 1.23 -

Emotion 5.53 1.37 .716**

-

Price 5.31 1.35 .663**

.670**

-

Social 4.59 1.83 .380**

.542**

.478**

-

WOM 2.81 0.93 .490**

.571**

.559**

.430**

-

PI 5.18 1.58 .535

** .642

** .629

** .523

**

.729*

*

-

**. Correlation is significant at the 0.01 level (2-tailed).

Table 8. Continued


36

Manipulation Check

Table 10 represents the distribution level of all of the surveys that were viewed.

Table 10. Between-Subjects Factors

Label N

Promotion Low Discount 102

High Discount 102

Scarcity No Scarcity 99

High Scarcity 105

An Anova test was performed to look at the average discount level of the surveys

distributed. The average mean of the respondents who viewed the low discount level had a

mean of 5.18, while the respondents who viewed the high discount had a mean of 5.52.

There was not a significance between the two manipulations. The results are presented in

Table 11.

Table 11. Average Discount Level

N F Sig. Mean Std. Deviation

Low Discount (25%)

103

5.18 1.36

High Discount (50%)

104

5.52 1.34

Total 207 3.13 .08

An Anova test was performed to look at the average scarcity level of the surveys

distributed. The average mean of the respondents who viewed the no scarcity had a mean

of 3.67, while the respondents who viewed the high scarcity had a mean of 3.88. There

was not a significance between the two manipulations (p < .35). The results are presented

in Table 12.


37

Table 12. Average Scarcity Level

N F Sig. Mean Std. Deviation

No Scarcity

102

3.67 1.70

High Scarcity (3 Days Only)

105

3.88 1.53

Total 207 .89 .35

Hypothesis Testing

To test H1a – H1d, the researcher performed a one way linear regression on each of the

perceived product values testing their significance with the discount level. A summary of

results is presented in figure 2.

Hypothesis 1a: The discount level in email promotions will have a significant influence on

the consumer’s perceived emotional value.

Regarding H1a, the discount level of the email promotion were entered in the

regression model as an independent variable and the emotional value as the dependent

variable. The overall model was significant (R2 = .24, F = 33.40, p < .000) which is

represented in Table 13. Discount level has a direct influence on the consumer’s perceived

emotional value ( = .41, p < .000). Therefore, H1a was supported.

Table 13. Discount level and Perceived Emotional Value

df R2 B F t-value Sig

Dependent Variable:

Emotional Value

(H1a)

Independent

Variable:

Discount

Level

206 .24 2.6 33 .41 6.52 .000***

Note: p < .001***. R2

= Adjusted R2

Hypothesis 1b: The discount level in email promotions will have a significant influence on

the consumer’s perceived social value.


38

Regarding H1b, the discount level of the email promotion were entered in the

regression model as an independent variable and the social value as the dependent variable.

The overall model was significant (R2 = .17, F = 21.99, p <.000) which is represented in

Table 14. Discount level has a direct influence on the consumer’s perceived social value (

= .30, p < .000). Therefore H1b was supported.

Table 14. Discount level and Perceived Social Value


Dependent Variable:

Social Value

(H1b)

Independent

Variable:

Discount

Level

204 .17 .34 22 .30 3.87 .000***

Note: p < .001***. R2

= Adjusted R2

Hypothesis 1c: The discount level in email promotions will have a significant influence on

the consumers perceived quality value.

Regarding H1c the discount level of the email promotion were entered in the

regression model as an independent variable and the quality value as the dependent


represented in Table 15. Discount level has a direct influence on the consumer’s perceived

quality value ( = .42, p < .000). Therefore, H1c was supported.

Table 15. Discount Level and Perceived Quality Value


Dependent Variable:

Quality Value

(H1c)

Independent

Variable:

Discount Level

205 .25 .38 35 .42 6.72 .000***

Note: p < .001***. R2

= Adjusted R2

Hypothesis 1d: The discount level in email promotions will have a significant influence on

the consumers perceived price value.


39

Regarding H1d, the discount level of the email manipulation were entered in the

regression model as an independent variable and the price value as the dependent variable.

The overall model was significant (R2

= .29, F = 41.81, p < .000) which is represented in

Table 16. Discount level has a direct influence on the consumer’s perceived price value (

= .44, p < .000). Therefore, H1d was supported.

Table 16. Discount level and Perceived Price Value


Dependent Variable:

Price Value

(H1:d)

Independent

Variable:

Discount

Level

204 .29 .43 42 .44 7.12 .000***

Note: p < .001***. R2

= Adjusted R2

To test H2a – H2d, the researcher performed a one way linear regression on each of the

perceived product values testing their significance with the scarcity level. A summary of

results is presented in figure 2.

Hypothesis 2a: The scarcity level in email promotions will have a significant influence on


Regarding H2a, the scarcity level of the email manipulation were entered in the

regression model as an independent variable and the emotional value as the dependent

variable. The overall model was significant (R2

= .24, F = 33.40, p < .000) which is

represented in Table 17. The scarcity level has a direct influence on the consumers

perceived emotional value ( = .20, p < .002). Therefore, H2a was supported.


40

Table 17. Scarcity level and Perceived Emotional Value


Dependent Variable:

Emotional Value

(H2a)

Independent

Variable:

Scarcity Level

206 .24 .17 33 .20 3.17 .000*

Note: p < .001***. R2

= Adjusted R2

Hypothesis 2b: The scarcity level in email promotions will have a significant influence on


Regarding H2b, the scarcity level of the email manipulation were entered in the

regression model as an independent variable and the social value as the dependent variable.

The overall model was significant (R2

= .17, F = 21.99, p < .000) which is represented in

Table 18. The scarcity level has a direct influence on the consumer perceived social value

( = .28, p <.000). Therefore, H2b was fully supported.

Table 18. Scarcity Level and Perceived Social Value

df R2 B F

t-

value Sig

Dependent Variable :

Social Value

(H2:B)

Independent

Variable:

Scarcity Level

204 .17 .32 22 .28 4.28 .000***

Note p < .001***. R2

= Adjusted R2

Hypothesis 2c: The scarcity level in email promotions will have a significant influence on


Regarding H2c, the scarcity level of the email manipulation were entered into the

regression model as an independent variable and the quality value as the dependent


represented in Table 19. The scarcity level has a direct influence on the consumers

perceived quality value (= .20, p < .002). Therefore, H2c was supported.


41

Table 19. Scarcity Level and Perceived Quality Value


Dependent Variable :

Quality Value

(H2c)

Independent

Variable:

Scarcity Level

205 .25 .15 35 .20 6.72 .000***

Note: p < .001***. R2

= Adjusted R2

Hypothesis 2d: The scarcity level in email promotions will have a lower significant

influence on consumer’s perception of price value.

Regarding H2d, the scarcity level of the email manipulation was entered into the

regression model as an independent variable and the price value as the dependent variable

as the dependent variable. The overall model was significant (R2 = .30, F = 41.81, p < .000)

which is represented in Table 20. The scarcity level has a direct influence on the consumers

perceived price value ( = .23, p < .000). Therefore, H2d was supported.

Table 20. Scarcity Level and Perceived Price Value


Dependent Variable:

Price Value

(H2d)

Independent

Variable:

Scarcity Level

204 .30 .20 42 .23 3.82 .000***

Note: p < .001***. R2

= Adjusted R2


42

Discount Level

Scarcity

Emotion

Social

Quality

Price

Email Promotion Perceived Product Value

= .41***

= .30***

=.42***

= .44***

= .20**

= .22***

= .20**

= .23***

Figure 2. Results of Hypothesis Testing: Email Promotions and Perceived Product Value

Note: p < .05*, p < .01**, p < .001***


43

To test H3, the researcher performed a one way linear regression on the perceived product

values testing their significance with purchase intention.

Hypothesis 3: The perceived product values; a) emotion, b) social, c) quality, and d) price

will have a significant influence on purchase intention.

Regarding H3, the emotional, social, quality, and price values were entered into

the regression model as the independent variables purchase intent as the dependent

variable. The overall model was significant (R2 = 0.50, F = 51.90, p < .000***).

H3a, emotional value has a positive relationship with purchase intention

(p < .000). Thus H3a was supported.

H3b, social value has a positive relationship with purchase intention (B = .17,

, p < .001). Thus, H3b was supported.

H3c, quality value does not have a significant relationship with purchase intention

(B = .05, = .04, p < .57). Thus, H3c was not supported.

H3d, price value has a positive relationship with purchase intention (B = 35,

=.30, p < .000). Thus, H3d was supported.

The following result for H3a – H3d are represented in Table 21.

Table 21. Perceived Product Values and Purchase Intent

df R2 F B

t-

value Sig

Dependent

Variable:

Purchase

Intent

(H3)

Independent

Variables:

Emotion

Social

Quality

Price

203 .50 51.91

.30

.17

.05

.35

.30

.20

.04

.30

3.71

3.31

.57

4.16

.000***

.001***

.57₰

.000***

Note: p < .05*, p < .01**, p < .001***


44

To test H4, the researcher performed a one way linear regression on the perceived product

values testing their significance with positive word-of-mouth. A summary of results is

presented in Figure 3.

Hypothesis 4: The perceived product values; a) emotion, b) social, c) quality, and d) price

will have a significant influence on positive word-of-mouth.

Regarding H4, the emotional, social, quality, and price values were entered into

the regression model as the independent variables and positive word of mouth as the

dependent variable. The overall model was significant (R2 = .40, F = 32.43, p < .000***).

H4a, emotional value has a positive relationship with positive word-of-mouth (B

= .19, b = .27, p <.003). Thus, H4a was supported.

H4b, social value does not have a significant relationship with positive word-of-

mouth (B = .10 b = .13, p < .06). Thus, H4b was not supported.

H4c, quality value does not have a significant relationship with positive word-of-

mouth (B = .10, b = .07, p < .43). Thus, H4c was not supported.

H4d, price value has a positive relationship with positive word-of-mouth (B = .19,

b =.27, p < .000). Thus H4d was supported.

The following results for H4a – H4d are represented in Table 22.


45

Table 22. Perceived Product Values and Positive Word of Mouth

df R2 F B

t-

value Sig

Dependent

Variable:

Positive

Word of

Mouth

(H4)

Independent

Variables:

Emotion

Social

Quality

Price

203 .38 32.43

.19

.10

.10

.19

.27

.13

.07

.27

3.00

1.90

.80

3.34

.003**

.06₰

.43₰

.000***

Note: p < .05*, p < .01**, p < .001***


46

Emotion

Social

Quality

Price

Perceived Product Value Approach Response

Purchase Intention

Positive Word of Mouth

=.30***

= .27**

= .20***

= .30***

= .04

=.07

= .13

= .27***

Figure 3. Results of Hypothesis Testing: Perceived Product Value and Approach Response

Note: p < .05*, p < .01**, p < .001***


47

Summary

This chapter included conclusions and assumptions that were made by the

researcher prior to the study, a discussion of findings compared to previous literature,

implications that affect marketers, and further research suggestions. The recommendations

for further research will allow marketers to focus on what this study found, so they can

analyze exactly what influences Generation Y to make purchases or spread positive word

of mouth through perceived values.


48

CHAPTER V

DISCUSSION AND IMPLICATIONS

Introduction

The S-O-R theory was the basis of this study. The research examined the

relationships between the discount level of the email promotion to each of the perceived

product values; emotion, social, quality, and price. The scarcity level was also tested to

see the relationships between scarcity and the four perceived product values. Once those

relationships were determined, the researcher evaluated the relationships between the

perceived product values and their significance with purchase intention and positive word-

of-mouth. This chapter will include the study’s conclusions, discussion, implications for

marketers and retailers, and recommendations for future research.

Conclusions and Discussions

Prior to completing this study the researcher had the following assumptions:

1) Consumers exposed to a higher discount level would have a higher perceived

emotional and price value.

2) Consumers exposed to a higher discount level would have a higher perception of

social and quality values.

3) Consumers exposed to a higher scarcity level would have a higher perception of

emotional, social and quality values.

4) Consumers exposed to a higher scarcity level would have a higher perception of price

value.


49

5) A higher perception of emotional, social, quality, and price will have a positive

relationship with purchase intention and positive word-of-mouth.

The objective of this study were to determine the relationships between the

discount and scarcity levels and whether they would have a positive of negative effect on

the perceived product values; emotion, social, quality and price, then to determine if the

perceived product values have an effect on purchase intention and positive word-of-

mouth.

The discount level in email promotions had a direct influence on consumer

perceived emotional value. Therefore, the higher the discount level the more retailers are

connecting with their consumers emotionally. When retailers connect with their

consumers on an emotional level, consumers are more likely to enjoy using their products.

The discount level in email promotions had a direct influence on consumer’s

perceived social value. Therefore, the higher the discount level the more retailers are

connecting with their consumers in a social aspect. When retailers connect with their

consumers socially, consumers are more likely to feel socially acceptable around their

friends and family.

The discount level in email promotions had a direct influence on consumers

perceived quality value. Therefore, the higher the discount level the more retailers are

promoting their quality. When retailers connect with their consumer and convey their

quality, consumers are more likely to believe that their product will perform consistently.


50

The discount level in email promotions had a direct influence on consumer’s

perceived price value. Therefore, the higher the discount level the more retailers are

conveying to their consumers about their prices. When retailer connect with their

consumers on this level, consumers are more likely to believe they are getting a good deal

on their purchases.

The scarcity level in email promotions had a direct influence on consumer’s

perceived emotional value. Therefore, the higher the scarcity level the more retailers are

connecting with their consumers emotionally. When retailers connect with their

consumers on an emotional level, consumers are more likely to enjoy using their products.


perceived social value. Therefore, the higher the scarcity level the more retailers are

connecting with their consumers socially. When retailers connect with their consumers

socially, consumers are more likely to feel socially acceptable around their friends and

family.


perceived quality value. Therefore, the higher the scarcity level the more retailers are

promoting their quality. When retailers connect with their consumer and convey their

quality, consumers are more likely to believe that their product will perform consistently.


perceived price value. Therefore, the higher the scarcity level the more retailers are

conveying to their consumers about their prices. When retailer connect with their


51

consumers on this level, consumers are more likely to believe they are getting a good deal

on their purchases.

The perceived emotional value had a direct influence on consumer intention to

purchase. Therefore, the more the retailer can connect with the consumer on an emotional

level, the likelihood of consumer’s intention to purchase is greater.

The perceived social value had a direct influence on consumer’s intention to

purchase. Therefore, the higher the perceived social value is the more likely consumers are

willing to purchase the product.

The perceived quality value did not have a direct influence on consumer’s

intention to purchase. Therefore, the higher the perceived quality value the less likely they

are willing to purchase the products.

The perceived price value had a direct influence on consumer’s intention to

purchase. Therefore, the higher the perceived price value is the more likely consumers are

willing to purchase the product.

The perceived emotional value you had a direct influence on consumers likelihood

of spreading positive word-of-mouth. Therefore, the higher perceived emotional value the

more likely consumers will spread positive word-of-mouth to their friends and family.

The perceived social value did not have a direct influence on consumer’s

likelihood of spreading positive word-of-mouth. Therefore, the higher perceived social

value the less likely consumers are to spreading positive word-of-mouth.


52

The perceived quality value did not have a direct influence on consumer’s

likelihood of spreading positive word-of-mouth. Therefore, the higher perceived quality

value is the less likely consumer are to spreading positive word-of-mouth.

The perceived price value had a direct influence on the consumer’s likelihood of

spreading positive word-of-mouth. Therefore, the higher the perceived price value is the

more likely consumer are to spreading positive word-of-mouth.

The following research presents interesting findings for retail marketers. When

developing email promotions, this research shows that it is necessary to include both a

substantial discount level as well as a manipulation in time dealing with scarcity in order

to effect purchase intention and positive word of mouth. By only promoting one or the

other this research shows that they will not attract their full audience.

Future Research

This study presents many opportunities for further study. The sample was not as

diverse as it should have been due to the non-probability random sampling used. A more

diverse sample of age, race and ethnicity, and residence could be added for more accurate

results. A larger more diverse sample would be a benefit to this study for marketing

researchers. There are many perceived product values that influence purchase intention

and positive word of mouth. Further research could be done to investigate those factors

and conduct further analysis. The researcher also believes that for future research using a

non-familiar brand would eliminate any perceived image of the brand and products. It is

interesting to note, that in order for retail marketers to keep up with Generation Y


53

consumers, their email promotions must be mobile compatible. As the study found 68% of

the respondents check their emails on their phones multiple times per day. While the

findings in this study presented interesting findings, it would be just as interesting to do a

similar study on baby boomers, due to their large disposable income as well as their

population. According to this research only 30% check their computers multiple times per

day unlike their mobile devices.

Summary

This chapter included assumptions that were made by the researcher prior to the

study conclusions and major findings that were found and presented through the statistical

analysis, implications that affect retail marketers, and further research suggestions. The

recommendations for future research will allow retail marketers to take what this research

study found and to elaborate, focus, and analyze what really triggers consumers to

purchase products or services and to spread positive word-of-mouth.


54

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59

APPENDIX A

TEXAS TECH UNIVERSITY REVIEW BOARD LETTER


60

APPENDIX B

INSTRUCTORS’ PERMISSION FOR CLASS PARTICIPATION

Hello,

I am Kelsi Shuey, a master’s student in the Hospitality and Retail Management Program. I

am conducting a study on e-mail promotions and there effects on perceived product value

and purchase intent under the supervision of Dr. Catherine Jai in the Retailing

Department. I would like to ask your students to participate in my research study by

responding to my online survey. The participation of your classes would be greatly

appreciated. Please let me know if you have any questions or concerns.

Thank you for your time and consideration.

Sincerely,

Kelsi. N. Shuey


61

APPENDIX C

RECRUITMENT MESSAGE

Hello,

My name is Kelsi Shuey, I am a master’s student in the Hospitality and Retail

Management Program. I am conducting a study on e-mail promotions and there effects on

perceived product value and purchase intent under the supervision of Dr. Catherine Jai in

the Retailing Department. I am asking for your participation in my online survey.

Participation is completely voluntary and you can withdraw at any time, even in the

middle of the survey. The survey takes less than 5 minutes and your answers will be

confidential and completely anonymous. Please let me know if you have any questions.

Thank you in advance for your participation.

Sincerely,

Kelsi. N. Shuey


62

APPENDIX D

EMAIL MANIPULATIONS

High Discount – High Scarcity (Female)

Low Discount – No Scarcity (Female)


63

High Discount – No Scarcity (Female)

Low Discount – High Scarcity (Female)


64

High Discount – High Scarcity (Male)

Low Discount – No Scarcity (Male)


65


66

Low Discount – High Scarcity (Male)

High Discount – No Scarcity (Male)


67

APPENDIX E

INFORMATION SHEET

Dear Participant,

We are conducting a study to obtain information on consumers’ perceived value when

viewing email promotions.

We are interested in participants who are at least 18 years old and have received an email

promotion within the past year. The questionnaire will take approximately 10 -15 minutes

to complete. Participation is voluntary and anonymous. All responses will be kept

anonymous. No personal data will be asked and the information obtained will be kept

confidential for the research purpose. Participants must be at least 18 years of age to

participate in the questionnaire.

This study has been approved by the Texas Tech University Human Research Protection

Program.

If you have any questions or if you would like to know the results of the study, please

contact Dr. Catherine Jai or Kelsi Shuey at 806-742-3068 Ext. 296 or email at

[email protected]

For questions about your rights as a subject, contact the Texas Tech University

Institutional Review Board for the Protection of Human Subjects, Office of Research

Services, Texas Tech University, Lubbock, Texas 79409 (806-742-2064). Thank you very

much for your participation.


68

APPENDIX F

QUALTRICS SURVEY


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70


71


72


73


74


75


76

the effects of discount level and scarcity on the

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