Research has shown that brands with higher deal frequency obtain a smaller market share gain on deal and have a lower expected price. However, the level of dealing must be perceived by consumers before it can affect consumer response to promotions. Hence, perception of deal frequency may affect consumer price perceptions and deal response much more strongly than the actual deal frequency. The author determines how consumer perceptions of deal frequency for a brand may be influenced by the dealing pattern of that brand and of other brands. She shows that the price consumers are willing to pay for a brand is correlated more highly with perceived deal frequency than with actual deal frequency. She also shows that the price consumers are willing to pay is correlated with the actual deal frequency of the brand for certain dealing patterns, but not for others.
Get full access to this article
View all access options for this article.
References
1.
BlattbergRobert C., EppenGary D., and LiebermanJoshua (1981), “A Theoretical and Empirical Investigation of Price Deals for Consumer Durables,”Journal of Marketing, 45(Winter), 116–29.
2.
BlochPeter H., and RichinsMarsha L. (1983), “A Theoretical Model for the Study of Product Importance Perceptions,”Journal of Marketing, 47(Summer), 69–81.
3.
BurkeRaymond R., and HarlamBari, KahnBarbara, and LodishLeonard M. (1990), “Purchase Time Compression Study: A Comparison of Laboratory Purchasing With Actual Purchase Behavior,” working paper, University of Pennsylvania.
4.
BurkeRaymond R., and SrullThomas K. (1988), “Competitive Interference and Consumer Memory for Advertising,”Journal of Consumer Research, 15(June), 55–68.
5.
BüyükkurtB. Kemal (1986), “Integration of Serially Sampled Price Information: Modelling and Some Findings,”Journal of Consumer Research, 13(December), 357–73.
6.
CacioppoJohn T., and PettyRichard E. (1979), “Effects of Message Repetition and Position on Cognitive Response, Recall and Persuasion,”Journal of Personality and Social Psychology, 37(January), 97–109.
7.
CelsiRichard L., and OlsonJerry C. (1988), “The Role of Involvement in Attention and Comprehension Processes,”Journal of Consumer Research, 15(September), 210–24.
8.
CohenJoel B. (1983), “Involvement and You: 1000 Great Ideas,” in Advances in Consumer Research, Vol. 10, BagozziRichard P., and TyboutAlice M., eds. Ann Arbor, MI: Association for Consumer Research, 325–8.
9.
ConoverJerry N. (1986), “The Accuracy of Price Knowledge: Issues in Research Methodology,” in Advances in Consumer Research, Vol. 13, LutzRichard, ed. Ann Arbor, MI: Association for Consumer Research, 589–93.
10.
BittaDelia, and AlbertJ., and MonroeKent B. (1974), “The Influence of Adaptation Level on Selective Price Perceptions,”Proceedings of the Association for Consumer Research, Scott Ward and Peter Wright, eds., 359–69.
11.
DicksonPeter R., and SawyerAlan G. (1990), “The Price Knowledge and Search of Supermarket Shoppers,”Journal of Marketing, 54(July), 42–53.
12.
EssensPeter J., and PovelDirk-Jan (1985), “Metrical and Nonmedical Representation of Temporal Patterns,”Perception and Psychophysics, 37, 1–7.
13.
FestingerLeon, and MacobyNathan (1964), “On Resistance to Persuasive Communications,”Journal of Abnormal and Social Psychology, 63(4), 359–66.
14.
GurumurthyK., and LittleJohn D. C. (1987), “A Pricing Model Based on Perception Theories and Its Testing on Scanner Panel Data,” working paper, Massachusetts Institute of Technology.
15.
HaalandGordon A., and VankatesanM. (1968), “Resistance to Persuasive Communications: An Examination of the Distraction Hypotheses,”Journal of Personality and Social Psychology, 9(2), 167–70.
16.
HelsonHarry. (1964), Adaptation-Level Theory.New York: Harper & Row Publishers, Inc.
17.
KahnemanDaniel, and TverskyAmos (1979), “Prospect Theory: An Analysis of Decision Under Risk,”Econometrica, 47(March), 263–91.
18.
KalwaniManohar U., YimChi Kin, RinneHeikki J., and SugitaYoshi (1990), “A Price Expectation Model of Customer Brand Choice,”Journal of Marketing Research, 27(August), 251–62.
19.
KimDong Hoon (1989), “The Role of Brand Equity in Modelling the Impact of Advertising and Promotion on Sales,” unpublished doctoral dissertation, Columbia University.
20.
KintschWalter (1970), “Model for Free Recall and Recognition,”in Models of Human Memory, NormanD., ed. New York: Academic Press, Inc., 331–73.
21.
KrishnaAradhna, CurrimImran C., and ShoemakerRobert W. (1991), “Consumer Perceptions of Promotional Activity,”Journal of Marketing, 55(April), 4–16.
22.
McGuireWilliam J. (1966), “Attitudes and Opinions,”Annual Review of Psychology, 17, 475–514.
23.
MonroeKent B. (1973), “Buyers’ Subjective Perceptions of Price,”Journal of Marketing Research, 10(February), 70–80.
24.
OlsonJerry C., and JacobyJacob (1971), “Consumer Response to Price: An Attitudinal Information Processing Perspective,” in Moving Ahead With Attitude Research, WindYoram, and GreenbergBarnett A., eds. Chicago: American Marketing Association, 73–86.
25.
SchmitzRobert A. (1987), “The Long-Term Relationship Between Retail Trade Promotion and Brand Sales Share,”Nielsen Researcher, 1(Summer), 8–13.
26.
SimonH. A., and KotovskyK. (1963), “Human Acquisition of Concepts for Sequential Patterns,”Psychological Review, 70, 534–46.
27.
SimonsonItamar, and WinerRussell S. (1990), “Scanner Data and Controlled Experiments: Using Complementary Research Methods for Assessing Convergent Validity,” working paper, University of California at Berkeley.
28.
TverskyAmos, and KahnemanDaniel (1974), “Judgment Under Uncertainty: Heuristics and Biases,”Science, 185, 1124–31.
29.
WinerRussell S. (1986), “A Reference Price Model of Brand Choice for Frequently Purchased Products,”Journal of Consumer Research, 13(September), 250–6.
30.
ZeithamlValarie A. (1982), “Consumer Response to In-Store Price Information Environments,”Journal of Consumer Research, 8(March), 356–69.
