Promotion Paradox on Willingness-to-Pay

• Main Authors: Meng-Hsuan Lin, 林孟璇
• Other Authors: none
• Format: Others
• Language: en_US
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/48040924272392207533

碩士 === 國立中正大學 === 行銷管理研究所 === 98 === Most of researches suggest that sales promotion have positive effect, and many companies spend a lot of budget in sales promotion to enhance sales revenue. Previous studies have showed that sales promotion could increase value of the product, therefore, it generally assumed that the perception of value in product with premium should higher than single product. But we assumed that consumers who perceived a promotion having little or no value, the result could turn out to be negative. We propose that most of consumer are risk averse value maximizer, when the premium we offered is unattractive, it could bring out a negative effect. This circumstance we called “promotion paradox.” This prediction was supported in two studies using an unattractive premium as a factor. The result suggest that when consumers who percept the premium is having little or no value, their willingness-to-pay will lower than single product. In study 1, we demonstrated that the willingness-to-pay of single product is higher than product with an unsuitable premium. In study 2, we demonstrated that the willingness-to-pay of single product is higher than product with a suitable but country of origin is unfavorable premium. We discuss the theoretical and practical implication of the findings for the promotion manipulation.