Keller consumers respond to promotions due to
Keller defined the benefits of sales promotions as the additional value linked to the sales promotions using experience that may be comprised of promotion exposure (e.
g., recognizing a promotion) and practice (e.g., attend a sweepstake or purchase a promoted product)1. According to Keller, consumers respond to promotions due to the positive using experience or, consistent with Holbrook’s definition, due to their customer value2. While Diamond, Johnson and Campbell explained the extra value of sales promotions by relating the reference price to sales promotions. According to their studies, some promotions increase the value of the product (such as free gifts, sweepstakes, bonus packs, samples), whereas others (such as price cuts) purely decrease the real payment. Hence, the reference price perceived by consumers will result in different attitudes towards sales promotions such as money savings or gain3.
Liao also claimed that price promotions rewards can be perceived as monetary savings or loss reduction. Whereas non-price promotions without association with money (e.g., free gifts), its benefits are hardly converted into reference price.
Therefore, this kind of promotions is framed as gain. Benefits of promotions seen as gains are separated from the reference price, while promotions constructed as reduced loss are considered as simply decreasing the purchase price4. Additionally, if hedonic promotions are not related to reference prices, they may not be seen as eroding the perception of the quality or brand equity of the companies5. According to Simonson, Carmon, and O’Curry, a new product attribute or promotion type could make customers leave for competitors if they perceived little value attached to the sales promotion experience in comparison to other choices. The most common explanation for this was the implication of additional value and the quality of the product itself. “Customers may misunderstood that they are going to pay for the unnecessary thing, and hence assume that they receive no value”6. This phenomenon could be explained by the attitude of people.
When it comes to evaluation of sales promotions benefits, customers assess three hedonic benefits (self-expression, amusement, and exploration) and three utilitarian benefits (savings, enhanced product quality, and improved shopping experience). It is sometimes very hard for consumers to rationally evaluate options with redundant features. At this point, non-price promotions not only noticeably differ from price promotions, but also have a greater scope of acceptability than price promotions7.
According to the study of Lowe and Barnes in 2012, non-price promotions appeared more appealing to customers when it came to introduction of new products as people perceived that they offer more gains and reduce the loss for trying a new product. Nevertheless, for the next generation products involve a high degree of innovation, preference for price promotions is higher than non-price ones due to the reduction of financial risk, thus moderate the effect of non-price promotions8. Moreover, Yi and Yoo discovered that non-price promotions hardly have detrimental impact on the brand attitude9.