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Promotion Signal: Proxy for a Price Cut?

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  • Inman, J Jeffrey
  • McAlister, Leigh
  • Hoyer, Wayne D
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    Abstract

    Evidence suggests that some consumers react to promotion signals without considering relative price information. We adopt Petty and Cacioppo's Elaboration Likelihood Model (ELM) to explain this behavior in terms of the ELM's peripheral route to pursuasion in which the promotion signal is taken as a cue for a price cut. Experimental results show that low need for cognition individuals react to the simple presence of a promotion signal whether or not the price of the promoted brand is reduced, but that high need for cognition individuals react to a promotion signal only when it is accompanied by a substantive price reduction. Copyright 1990 by the University of Chicago.

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Consumer Research.

    Volume (Year): 17 (1990)
    Issue (Month): 1 (June)
    Pages: 74-81

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    Handle: RePEc:ucp:jconrs:v:17:y:1990:i:1:p:74-81

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    Web page: http://www.journals.uchicago.edu/JCR/

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    Cited by:
    1. Lindsey-Mullikin, Joan & Petty, Ross D., 2011. "Marketing tactics discouraging price search: Deception and competition," Journal of Business Research, Elsevier, vol. 64(1), pages 67-73, January.
    2. Breugelmans, Els & Campo, Katia, 2008. "Can in-store displays improve category sales and brand market share in online stores? A study on the overall effectiveness and differences between display types in an online FMCG context," Research Memorandum 035, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    3. Dang Jha Priya, . "A Review of Theoretical Perspectives Applied to Sales Promotion and a New Perspective based on Mental Accounting Theory," IIMA Working Papers WP2004-03-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    4. Kamel Jedidi & Venkatram Ramaswamy & Wayne Desarbo, 1993. "A maximum likelihood method for latent class regression involving a censored dependent variable," Psychometrika, Springer, vol. 58(3), pages 375-394, September.
    5. Ralph-C Bayer & Changxia Ke, 2010. "Discounts and Consumer Search Behavior: The Role of Framing," School of Economics Working Papers 2010-21, University of Adelaide, School of Economics.
    6. Valenzuela, Ana & Raghubir, Priya & Mitakakis, Chrissy, 2013. "Shelf space schemas: Myth or reality?," Journal of Business Research, Elsevier, vol. 66(7), pages 881-888.
    7. Sahay, Arvind, . "Market-Driving Behaviors: A Framework for Developing Theory and Practice," IIMA Working Papers WP2013-05-07, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. Shor, Mikhael & Oliver, Richard L., 2006. "Price discrimination through online couponing: Impact on likelihood of purchase and profitability," Journal of Economic Psychology, Elsevier, vol. 27(3), pages 423-440, June.
    9. Hruschka, Harald, 2002. "Market share analysis using semi-parametric attraction models," European Journal of Operational Research, Elsevier, vol. 138(1), pages 212-225, April.
    10. Raghubir, Priya, 2006. "An information processing review of the subjective value of money and prices," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1053-1062, October.
    11. Valette-Florence, Pierre & Guizani, Haythem & Merunka, Dwight, 2011. "The impact of brand personality and sales promotions on brand equity," Journal of Business Research, Elsevier, vol. 64(1), pages 24-28, January.
    12. Chatterjee, Subimal & Kang, Yong Soon & Mishra, Debi Prasad, 2005. "Market signals and relative preference: the moderating effects of conflicting information, decision focus, and need for cognition," Journal of Business Research, Elsevier, vol. 58(10), pages 1362-1370, October.
    13. Hyeong Kim & Thomas Kramer, 2006. "The moderating effects of need for cognition and cognitive effort on responses to multi-dimensional prices," Marketing Letters, Springer, vol. 17(3), pages 193-203, July.
    14. Volle, Pierre, 2001. "The short-term effect of store-level promotions on store choice, and the moderating role of individual variables," Journal of Business Research, Elsevier, vol. 53(2), pages 63-73, August.
    15. Eric Anderson & Duncan Simester, 2003. "Effects of $9 Price Endings on Retail Sales: Evidence from Field Experiments," Quantitative Marketing and Economics, Springer, vol. 1(1), pages 93-110, March.
    16. Béatrice Parguel & Florence Benoît-Moreau, 2013. "Counterproductive Environmental Performance Displays: Lessons from the Automotive Sector," Post-Print halshs-00948940, HAL.
    17. Pierre Volle, 2001. "The Short-Term Effect of Store-Level Promotions on Store Choice and the Moderating Role of Individual Variables," Post-Print halshs-00164831, HAL.
    18. Charlotte Gaston-Breton & Lola C. Duque, 2011. "Promotional benefits of 99-ending prices: the moderating role of intuitive and analytical decision style," Business Economics Working Papers wb113809, Universidad Carlos III, Departamento de Economía de la Empresa.
    19. Willem Boom, 2011. "Price Intransparency, Consumer Decision Making and European Consumer Law," Journal of Consumer Policy, Springer, vol. 34(3), pages 359-376, September.
    20. Gupta, Pranjal & Harris, Judy, 2010. "How e-WOM recommendations influence product consideration and quality of choice: A motivation to process information perspective," Journal of Business Research, Elsevier, vol. 63(9-10), pages 1041-1049, September.

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