Title

Effect of Price Discount Frames and Levels on Consumers' Perceptions in Low‐End Service Industries

Keywords

prices, discounts, hospitality services

Abstract

Purpose– The purpose of this study is to investigate the effects of price discount frames and price discount levels on consumer perceptions about the quality of the service product, the value of the discount, their purchase intentions and their willingness to spread the word of mouth about the discount savings across different types of services.

Design/methodology/approach The study uses an experiment design method using three interesting variables: discount format, discount level and service industry type. The experiment included four different types of low‐end price service levels: restaurants, hotels, mailing services, and retail services.

Findings– The findings indicate that price discount frames and discount levels do affect consumers' perceptions on the value of the discount, the quality of the service, their intention to purchase and their willingness to engage in WOM advertising.

Practical implicationsThe practical implication for service firms that want to use price discount promotions to encourage sales and increase revenue is that they should carefully consider the price range and the value or quality of image they intend to signal when using these different price discount frames and the service they are selling to determine the discount level to use.

Originality/value– This paper is valuable to low‐end service marketers that seek to use price discount promotions to encourage sales and increase revenue.

Publication Date

6-1-2010

Original Citation

Nusair, K., Yoon, H., Naipaul, S., Parsa, HG. (2010). Effects of price discount frames and price discount levels on consumers’ perceptions. International Journal of Contemporary Hospitality Management. 22(10).

Number of Pages

814-835

Document Type

Paper

Language

English

Source Title

International Journal of Contemporary Hospitality Management

Volume

22

Issue

6

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

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http://dx.doi.org/10.1108/09596111011063106

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