Consumer perceptions of monetary and non-monetary introductory promotions for new products

Ben LOWE*, Bradley R. BARNES

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review

34 Citations (Scopus)

Abstract

Little research has examined how consumers respond to sales promotions in new product categories. This article fills this gap by integrating research on reference prices with literature on sales promotions for new product categories. Existing research suggests that consumers respond more favourably to non-monetary promotions (e.g. extra free promotions) than monetary promotions (e.g. price discounts) because non-monetary promotions are framed as segregated gains rather than reduced losses. However, both kinds of promotions are widely used in practice, suggesting the importance of other contributory factors. With a consumer experiment on a national panel of consumers, this research demonstrates that extra free product promotions are most preferred for existing products, and introductory low-price promotions are preferred for innovative products. The moderating effect of a product's innovativeness is explained via a new relationship in the marketing literature, whereby perceived risk mediates the relationship between perceived innovativeness and a consumer's tendency to stockpile.

Original languageEnglish
Pages (from-to)629-651
Number of pages23
JournalJournal of Marketing Management
Volume28
Issue number5-6
DOIs
Publication statusPublished - May 2012
Externally publishedYes

Keywords

  • BOGOF
  • introductory low price
  • perceived innovativeness
  • transaction value

Fingerprint

Dive into the research topics of 'Consumer perceptions of monetary and non-monetary introductory promotions for new products'. Together they form a unique fingerprint.

Cite this