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The effectiveness and consequences of price promotions - Is there a difference between store brands and high end brands?

Waanders, Koen (2013) The effectiveness and consequences of price promotions - Is there a difference between store brands and high end brands?

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Abstract:Price promotions can negatively influence aspects of a brand that is promoted, such as the perceived brand quality and brand image. Especially, promotions deeper than 20 percent influenced the postpromotion brand preference negatively and were perceived as untrustworthy. High end brands and store brands differ as it comes to the perceived quality, brand awareness, brand image, and price. Therefore, it was hypothesized that the effectiveness and consequences of deep price promotions (more than 20 percent) would affect a store brand more negatively than a high end brand. In study 1, an online questionnaire, a 2 (store brand vs. high end brand) x 3 (type of promotion: 50 percent vs. 10 percent vs. no percentage mentioned) between subjects design was used to test whether or not price promotion’s effectiveness and consequences differed between a store brand and high end brand. In study 2, a taste test, a 2 (store brand vs. high end brand) x 2 (type of promotion: 50 percent vs. no price promotion) between subjects design was used to test whether the deep price promotion influenced the taste experience of a store brand differently compared to a high end brand. Results showed that the deep discount influenced the taste experience of the store brand negatively, whereas the taste experience for the high end brand was influenced positively. Next to that, the high end brand’s quality and product evaluation was perceived better compared to the store brand, but the promotion depth (more or less than 20 percent) did not influence the result. Based on these results, store brands must be very careful using (deep) price promotions, because the possible positive effect in the short-term can be offset by the negative effects in the long run. The deal (trustworthiness, favorability and perceived fairness) for the store brand and high end brand was not perceived differently. Only the deep price promotion without mentioning the percentage discount was perceived with less skepticism for a high end brand compared to a store brand. There were also no differences in consumer behavior (willingness to spread positive word of mouth and purchase intent).
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:05 communication studies
Programme:Communication Studies MSc (60713)
Link to this item:http://purl.utwente.nl/essays/63489
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