IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v64y2022ics0969698921003635.html
   My bibliography  Save this article

Hidden price promotions: Could retailer price promotions backfire?

Author

Listed:
  • Li, Wenjing
  • Hardesty, David M.
  • Craig, Adam W.
  • Song, Lei

Abstract

Hidden-price promotions, a type of uncertain price promotion in which the final price is not revealed when consumers first encounter the product, have been recently adopted by retailers. However, current research suggests that hidden-price promotions have the potential to backfire and result in reduced consumer purchase intention. Across seven studies, we reveal that hidden-price promotions can be effective but risk increasing discount expectations, as consumers expect a large discount. Only when the discount level meets or exceeds inflated expectations does the excitement built by the promotion positively impact purchase intention. For cognitive purchases, even without providing a high discount, hidden-price promotions are as effective as traditional ones. This research provides guidelines for retailers that want to employ hidden-price promotions.

Suggested Citation

  • Li, Wenjing & Hardesty, David M. & Craig, Adam W. & Song, Lei, 2022. "Hidden price promotions: Could retailer price promotions backfire?," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:joreco:v:64:y:2022:i:c:s0969698921003635
    DOI: 10.1016/j.jretconser.2021.102797
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698921003635
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2021.102797?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kyra L Wiggin & Martin Reimann & Shailendra P Jain & Darren W Dahl & Margaret C Campbell & Paul M Herr, 2019. "Curiosity Tempts Indulgence," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 45(6), pages 1194-1212.
    2. Choi, Sungchul & Park, Sang-June & Qiu, Chun (Martin) & Stanyer, Mike, 2013. "The discount is unfair: Egocentric fairness in risky discounts," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 32-43.
    3. Gilles Laurent & Pierre Chandon & Brian Wansink, 2000. "A Benefit Congruency Framework of Sales Promotion Effectiveness," Post-Print hal-00458440, HAL.
    4. Grewal, Dhruv & Roggeveen, Anne L. & Tsiros, Michael, 2008. "The Effect of Compensation on Repurchase Intentions in Service Recovery," Journal of Retailing, Elsevier, vol. 84(4), pages 424-434.
    5. Gupta, Aditya & Eilert, Meike & Gentry, James W., 2020. "Can I surprise myself? A conceptual framework of surprise self-gifting among consumers," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    6. Gelbrich, Katja, 2011. "I Have Paid Less Than You! The Emotional and Behavioral Consequences of Advantaged Price Inequality," Journal of Retailing, Elsevier, vol. 87(2), pages 207-224.
    7. Hill, Krista M. & Fombelle, Paul W. & Sirianni, Nancy J., 2016. "Shopping under the influence of curiosity: How retailers use mystery to drive purchase motivation," Journal of Business Research, Elsevier, vol. 69(3), pages 1028-1034.
    8. Grewal, Dhruv & Roggeveen, Anne L. & Lindsey-Mullikin, Joan, 2014. "The Contingent Effects of Semantic Price Cues," Journal of Retailing, Elsevier, vol. 90(2), pages 198-205.
    9. LAURENT, Gilles & CHANDON, Pierre & WANSINK, Brian, 2000. "A benefit congruency framework of sales promotion effectiveness," HEC Research Papers Series 698, HEC Paris.
    10. Ashok K. Lalwani & Sharon Shavitt, 2013. "You Get What You Pay For? Self-Construal Influences Price-Quality Judgments," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 40(2), pages 255-267.
    11. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aleksandra Kovacheva & Hristina Nikolova, 2024. "Uncertainty marketing tactics: An overview and a unifying framework," Journal of the Academy of Marketing Science, Springer, vol. 52(1), pages 1-22, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tang, Jiansheng & Zhou, Jiamin & Zheng, Chundong & Jiao, Sijing, 2022. "More expectations, more disappointments: Ego depletion in uncertain promotion," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    2. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    3. Cambra-Fierro, Jesus & Melero, Iguacel & Sese, F. Javier, 2015. "Managing Complaints to Improve Customer Profitability," Journal of Retailing, Elsevier, vol. 91(1), pages 109-124.
    4. Eisenbeiss, Maik & Wilken, Robert & Skiera, Bernd & Cornelissen, Markus, 2015. "What makes deal-of-the-day promotions really effective? The interplay of discount and time constraint with product type," International Journal of Research in Marketing, Elsevier, vol. 32(4), pages 387-397.
    5. Qadan, Mahmoud & Aharon, David Y. & Cohen, Gil, 2020. "Everybody likes shopping, including the US capital market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 551(C).
    6. Garrido-Morgado, Álvaro & González-Benito, Óscar & Martos-Partal, Mercedes & Campo, Katia, 2021. "Which Products are More Responsive to In-Store Displays: Utilitarian or Hedonic?," Journal of Retailing, Elsevier, vol. 97(3), pages 477-491.
    7. Ji Wu & Haichuan Zhao & Haipeng (Allan) Chen, 2021. "Coupons or Free Shipping? Effects of Price Promotion Strategies on Online Review Ratings," Information Systems Research, INFORMS, vol. 32(2), pages 633-652, June.
    8. Wei, Zhiyong & Dou, Wenyu & Jiang, Qingyun & Gu, Chenyan, 2021. "Influence of incentive frames on offline-to-online interaction of outdoor advertising," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    9. Attari, Amin & Chatterjee, Promothesh & Singh, Surendra N., 2022. "Taking a chance for a discount: An investigation into consumers’ choice of probabilistic vs. sure price promotions," Journal of Business Research, Elsevier, vol. 143(C), pages 366-374.
    10. Karl Akbari & Udo Wagner, 2021. "Playing When Paying and What Happens Next: Customer Satisfaction and Word-of-Mouth Intention in Gambled Price Promotions," Schmalenbach Journal of Business Research, Springer, vol. 73(2), pages 243-271, June.
    11. Suwelack, Thomas & Hogreve, Jens & Hoyer, Wayne D., 2011. "Understanding Money-Back Guarantees: Cognitive, Affective, and Behavioral Outcomes," Journal of Retailing, Elsevier, vol. 87(4), pages 462-478.
    12. Aîda Mimouni & Ouidade Sabri-Zaaraoui & Béatrice Parguel, 2010. "Competitive Advertising Within Store Flyers: A Win-Win Strategy?," Post-Print halshs-00634439, HAL.
    13. Guillaume Le Borgne & Lucie Sirieix & Sandrine Costa, 2014. "Food waste and promotions," Working Papers hal-01140919, HAL.
      • Le Borgne, G. & Sirieix, L. & Costa, S., 2014. "Food waste and promotions," Working Papers MoISA 201405, UMR MoISA : Montpellier Interdisciplinary center on Sustainable Agri-food systems (social and nutritional sciences): CIHEAM-IAMM, CIRAD, INRAE, L'Institut Agro, Montpellier SupAgro, IRD - Montpellier, France.
    14. Wagner, Tillmann & Rudolph, Thomas, 2010. "Towards a hierarchical theory of shopping motivation," Journal of Retailing and Consumer Services, Elsevier, vol. 17(5), pages 415-429.
    15. Teck-Chai Lau & Tat-Huei Cham & David Ching-Yat Ng, 2018. "How Susceptible are Consumers in Impulse Purchasing Ready-to-Drink Products? Evidence from Malaysia," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 8(6), pages 429-444, June.
    16. Kim, Joon Ho & Kang, Kyung Ho, 2018. "The effect of promotion on gaming revenue: A study of the US casino industry," Tourism Management, Elsevier, vol. 65(C), pages 317-326.
    17. Aydinli, Aylin & Lamey, Lien & Millet, Kobe & ter Braak, Anne & Vuegen, Maya, 2021. "How Do Customers Alter Their Basket Composition When They Perceive the Retail Store to Be Crowded? An Empirical Study," Journal of Retailing, Elsevier, vol. 97(2), pages 207-216.
    18. Gaston-Breton, Charlotte & Duque, Lola C., 2011. "Promotional benefits of 99-ending prices: the moderating role of intuitive and analytical decision style," DEE - Working Papers. Business Economics. WB wb113809, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    19. Christine Gonzalez & Élodie Huré & Karine Picot-Coupey, 2013. "Mobile application value for consumers," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201340, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    20. MULLICK Naushadul Haque, 2013. "Enhancing The Image & Brand Equity Of A Shopping Mall," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 8(3), pages 72-81, Decembre.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:64:y:2022:i:c:s0969698921003635. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.