Cents or Percent? The Effects of Promotion Framing on Price Expectations and Choice
2007, Journal of Marketing
Devon DelVecchio, H. Shanker Krishnan, Daniel C. Smith
Previous research has shown that the monetary value of a promotion (promotion depth) affects choice during the promotion period. However, as promotion depth increases, consumers might lower their expectations of future price, which in turn may threaten future choice when prices return to normal levels. This research examines how promotion frame (percentage-off versus cents-off) moderates the effect of promotion depth on post-promotion price expectations and choice. The findings indicate that compared with cents-off promotions, high-depth percentage-off promotions lead to higher post-promotion price expectations. Likewise, post-promotion choice is higher when high-depth promotions are framed in percentage-off than cents-off terms. The authors examine the process underlying the effect of promotion frame on price expectations and find that frame affects (1) consumers’ perceptions of the promoted price and (2) the weight they place on the promoted price.
DelVecchio, Devon, H. Shanker Krishnan, and Daniel C. Smith (2007), "Cents or Percent? The Effects of Promotion Framing on Price Expectations and Choice," Journal of Marketing, Vol. 71, No. 3, pp. 158-170.
Featured in NY Times article.