Open Collections

Yi, Shangwen

University of British Columbia

Many businesses routinely offer consumers price promotions, with or without restrictions, presented in various formats. Despite their prevalence in marketing, the psychological and behavioral mechanisms driving consumer responses to these promotions remain poorly understood. This thesis explores these mechanisms through two related essays, each addressing critical questions about price promotion effectiveness. Essay 1 examines the effectiveness of two comparable types of restricted price promotions: threshold promotions (conditional on spending more than a threshold amount; e.g., “Get $5 off on orders of $10 or more”) and capped promotions (limited to a maximum dollar value; e.g., “Get 50% off, up to $5 per order”). Results show that threshold promotions lead to higher purchase intentions, conversion rates, and overall sales than comparable capped promotions—even though capped promotions are equivalent or better in economic savings—when the trigger value (the spending amount at which the promotion activates or caps) is low. This effect occurs because consumers raise their promotion expectations for capped promotions and lower their spending expectations for threshold promotions, leading them to perceive the threshold promotion as fairer. However, this effect reverses when the trigger value is high, where consumers perceive capped promotions as fairer and prefer them to threshold promotions. Essay 2 investigates two types of percentage framings for price promotions. One is all-inclusive percentage framing (AIPF), and the other one is implicitly partitioned percentage framing (IPPF). We provide evidence supporting that IPPF may lead to higher purchase intention and deal evaluation than AIPF, but only when the promoted products are of high self-relevance to consumers. It is because IPPF leads to process-oriented mental simulation, and thus creates a “process amplifier effect” for deal evaluation.

Text

2025-03-27

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/90534

Business Administration - Marketing

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/