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The Price of "Free"-dom: Consumer Sensitivity to Promotions with Negative Contextual Influences

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  • Sucharita Chandran
  • Vicki G. Morwitz

Abstract

Past research has shown that monetary promotions (e.g., discounts) are more likely to be processed relative to and integrated with the original product price than are free promotions. We posit that because of this difference, free promotions are more focal and salient than monetary promotions. In a set of three experiments, we demonstrate that this salience results in free promotions being less susceptible than equivalent monetary discounts to negative contextual information on quality that can potentially lower purchase intentions. We show that this effect can be reversed when respondents focus on other pieces of information that diminish the salience of the free promotion. (c) 2006 by JOURNAL OF CONSUMER RESEARCH, Inc..

Suggested Citation

  • Sucharita Chandran & Vicki G. Morwitz, 2006. "The Price of "Free"-dom: Consumer Sensitivity to Promotions with Negative Contextual Influences," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 33(3), pages 384-392, October.
    • Handle: RePEc:oup:jconrs:v:33:y:2006:i:3:p:384-392
    DOI: 10.1086/508439
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    Cited by:

    1. Wen Zhang & Yi He, 2020. "Optimal advance selling discount strategy with future‐oriented consumers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 308-320, April.
    2. Minnema, Alec & Bijmolt, Tammo H.A. & Non, Mariёlle C., 2017. "The impact of instant reward programs and bonus premiums on consumer purchase behavior," International Journal of Research in Marketing, Elsevier, vol. 34(1), pages 194-211.
    3. Schöber, Timo & Stadtmann, Georg, 2020. "Fortnite: The business model pattern behind the scene," Discussion Papers 415, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    4. Santana, Shelle & Thomas, Manoj & Morwitz, Vicki G., 2020. "The Role of Numbers in the Customer Journey," Journal of Retailing, Elsevier, vol. 96(1), pages 138-154.
    5. Sheehan, Daniel & Hardesty, David M. & Ziegler, Alexander H. & Chen, Haipeng (Allan), 2019. "Consumer reactions to price discounts across online shopping experiences," Journal of Retailing and Consumer Services, Elsevier, vol. 51(C), pages 129-138.
    6. Ahmetoglu, Gorkan & Furnham, Adrian & Fagan, Patrick, 2014. "Pricing practices: A critical review of their effects on consumer perceptions and behaviour," Journal of Retailing and Consumer Services, Elsevier, vol. 21(5), pages 696-707.
    7. Park, Chang Hee & Park, Young-Hoon & Schweidel, David A., 2018. "The effects of mobile promotions on customer purchase dynamics," International Journal of Research in Marketing, Elsevier, vol. 35(3), pages 453-470.
    8. Koo, Jieun & Suk, Kwanho, 2020. "Is $0 Better than Free? Consumer Response to “$0” versus “Free” Framing of a Free Promotion," Journal of Retailing, Elsevier, vol. 96(3), pages 383-396.
    9. Mao, Wen, 2016. "Sometimes “Fee” Is Better Than “Free”: Token Promotional Pricing and Consumer Reactions to Price Promotion Offering Product Upgrades," Journal of Retailing, Elsevier, vol. 92(2), pages 173-184.
    10. Byun, Jaemun & Jang, SooCheong (Shawn), 2015. "Effective promotions for membership subscriptions and renewals to tourist attractions: Discount vs. bonus," Tourism Management, Elsevier, vol. 50(C), pages 194-203.
    11. Andreas Aigner & Robert Wilken & Sylvie Geisendorf, 2019. "The Effectiveness of Promotional Cues for Organic Products in the German Retail Market," Sustainability, MDPI, vol. 11(24), pages 1-15, December.
    12. Nina Mazar & Kristina Shampanier & Dan Ariely, 2017. "When Retailing and Las Vegas Meet: Probabilistic Free Price Promotions," Management Science, INFORMS, vol. 63(1), pages 250-266, January.
    13. Di Mascio, Rita & Fatima, Johra, 2018. "The role of identification in frontline employee decision-making," Journal of Retailing and Consumer Services, Elsevier, vol. 43(C), pages 131-138.
    14. Liu, Hsin-Hsien & Chou, Hsuan-Yi, 2018. "Promotional formats and inaction inertia," Journal of Economic Psychology, Elsevier, vol. 66(C), pages 22-32.
    15. Elspeth Kirkman, 2019. "Free riding or discounted riding? How the framing of a bike share offer impacts offer-redemption," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 2(2).
    16. Mukherjee, Amaradri & Jha, Subhash & Smith, Ronn J., 2017. "Regular Price $299; Pre-order Price $199: Price Promotion for a Pre-ordered Product and the Moderating Role of Temporal Orientation," Journal of Retailing, Elsevier, vol. 93(2), pages 201-211.
    17. Liu, Hsin-Hsien & Chou, Hsuan-Yi, 2015. "The effects of promotional frames of sales packages on perceived price increases and repurchase intentions," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 23-33.
    18. Yu, Annie Pei-I & Chuang, Shih-Chieh & Cheng, Yin-Hui & Wu, Yi-Chin, 2020. "The influence of sharing versus self-use on the preference for different types of promotional offers," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    19. Hossain, Mehdi T. & Saini, Ritesh, 2015. "Free indulgences: Enhanced zero-price effect for hedonic options," International Journal of Research in Marketing, Elsevier, vol. 32(4), pages 457-460.
    20. Johannes Voester & Bjoern Ivens & Alexander Leischnig, 2017. "Partitioned pricing: review of the literature and directions for further research," Review of Managerial Science, Springer, vol. 11(4), pages 879-931, October.
    21. Sooyeon Lee-Wingate & Kim Corfman, 2010. "A Little Something for Me and Maybe for You, Too: Promotions that Relieve Guilt," Marketing Letters, Springer, vol. 21(4), pages 385-395, December.
    22. Park, Yookyung & Yi, Youjae, 2022. "Is a gift on sale “heart-discounted†? Givers’ misprediction on the value of discounted gifts and the influence of service robots," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).

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