Impact of different price discount frames and levels on customer perception and behavioural intention

Abstract

Purpose – this paper aims to examine the effect of framing price promotion on consumers’ purchase intentions. The main purpose of this paper is to analyse the impact of percentage and monetary price discount frames, discount levels of 20%, 40%, 60% and 80% on customer behavioural intention and perception within a high-end hospitality industry context. Research methodology – this study considers 8 manipulated sample scenarios that have been developed. In summary, the experiment consisted of 2×4 designs of the high-end hospitality industry. Two independent variables were included in the experiment: two discount formats (€-off, %-off) and four discount levels to instigate the impact it has on the behavioural intentions and perceptions. Findings – research has proved that in the high-end hospitality industry, different price discount frames and levels have a significant impact on customer behavioural intentions and perceptions. Research limitations – the results of this study show that the threshold for the discount rate may depend on the type of hotel. Therefore, in the future, the impact of a discount on several hotels of different levels should be assessed in one study. 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 high-end service marketers that seek to use price discount promotions to encourage sales and increase revenue.