Effect of price discount frames and levels on consumers' perceptions in low-end service industries

Khaldoon Nusair, Hae Jin Yoon, Sandra Naipaul, H. G. Parsa

Research output: Contribution to journalArticle

50 Citations (Scopus)

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 implications: The 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.

Original languageEnglish
Pages (from-to)814-835
Number of pages22
JournalInternational Journal of Contemporary Hospitality Management
Volume22
Issue number6
DOIs
Publication statusPublished - 2010

Keywords

  • Discounts
  • Hospitality services
  • Prices

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management

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