Will you care when you pay more? The negative side of targeted promotions

Dung-Chun Tsai, Hsiao Ching Lee

Research output: Contribution to journalArticle

23 Citations (Scopus)

Abstract

Purpose - The purpose of the paper is to examine perceptions of unfairness and accompanying cognitive and emotional outcomes exhibited by present versus prospective customers when faced with targeted promotions. The targeted promotions were designed to be alternatively advantageous or disadvantageous to the targeted group. Design/methodology/approach - An experiment was conducted with a two (customers categories: present/prospective customer) × two (inequality conditions: advantaged/disadvantaged condition) between-subject design. A total of 104 valid questionnaires were completed with a minimum of 24 participants per cell. Findings - Present customers perceive higher unfairness than prospective customers when faced with disadvantaged conditions. However, perceived unfairness was not significantly different when faced with advantaged conditions. Further, perceived unfairness cognitively and affectively influences purchase intentions through perceived value and negative emotions. Practical implications - Although prospective customers are price-sensitive, targeted promotions should favor present customers instead of prospective customers to lower the perceived price unfairness of present customers. In addition, when relatively low prices are necessary to attract prospective customers, firms should create a type of "segmentation fence", where present customers are exposed as little as possible to special offers designed to attract prospective customers. Originality/value - This research contributes to three streams of literature. The first is related to perceived reference price unfairness, focusing on self/other comparisons (present versus prospective customers) rather than self/self comparisons. The second contribution is related to the outcomes of perceived price unfairness. The mediating effect of perceived value (i.e. cognitive outcomes) and negative emotions (i.e. affective outcomes) between perceived price unfairness and purchase intentions is examined concurrently. The third contribution is that this research raises echoes with the perspective of customer relationship management.

Original languageEnglish
Pages (from-to)481-491
Number of pages11
JournalJournal of Product and Brand Management
Volume16
Issue number7
DOIs
Publication statusPublished - 2007 Nov 22

Fingerprint

Fences
Experiments
Perceived price

All Science Journal Classification (ASJC) codes

  • Marketing
  • Management of Technology and Innovation

Cite this

@article{63ca1c4202404e5bac86cecf1bd40fda,
title = "Will you care when you pay more? The negative side of targeted promotions",
abstract = "Purpose - The purpose of the paper is to examine perceptions of unfairness and accompanying cognitive and emotional outcomes exhibited by present versus prospective customers when faced with targeted promotions. The targeted promotions were designed to be alternatively advantageous or disadvantageous to the targeted group. Design/methodology/approach - An experiment was conducted with a two (customers categories: present/prospective customer) × two (inequality conditions: advantaged/disadvantaged condition) between-subject design. A total of 104 valid questionnaires were completed with a minimum of 24 participants per cell. Findings - Present customers perceive higher unfairness than prospective customers when faced with disadvantaged conditions. However, perceived unfairness was not significantly different when faced with advantaged conditions. Further, perceived unfairness cognitively and affectively influences purchase intentions through perceived value and negative emotions. Practical implications - Although prospective customers are price-sensitive, targeted promotions should favor present customers instead of prospective customers to lower the perceived price unfairness of present customers. In addition, when relatively low prices are necessary to attract prospective customers, firms should create a type of {"}segmentation fence{"}, where present customers are exposed as little as possible to special offers designed to attract prospective customers. Originality/value - This research contributes to three streams of literature. The first is related to perceived reference price unfairness, focusing on self/other comparisons (present versus prospective customers) rather than self/self comparisons. The second contribution is related to the outcomes of perceived price unfairness. The mediating effect of perceived value (i.e. cognitive outcomes) and negative emotions (i.e. affective outcomes) between perceived price unfairness and purchase intentions is examined concurrently. The third contribution is that this research raises echoes with the perspective of customer relationship management.",
author = "Dung-Chun Tsai and Lee, {Hsiao Ching}",
year = "2007",
month = "11",
day = "22",
doi = "10.1108/10610420710834931",
language = "English",
volume = "16",
pages = "481--491",
journal = "Journal of Product and Brand Management",
issn = "1061-0421",
publisher = "Emerald Group Publishing Ltd.",
number = "7",

}

Will you care when you pay more? The negative side of targeted promotions. / Tsai, Dung-Chun; Lee, Hsiao Ching.

In: Journal of Product and Brand Management, Vol. 16, No. 7, 22.11.2007, p. 481-491.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Will you care when you pay more? The negative side of targeted promotions

AU - Tsai, Dung-Chun

AU - Lee, Hsiao Ching

PY - 2007/11/22

Y1 - 2007/11/22

N2 - Purpose - The purpose of the paper is to examine perceptions of unfairness and accompanying cognitive and emotional outcomes exhibited by present versus prospective customers when faced with targeted promotions. The targeted promotions were designed to be alternatively advantageous or disadvantageous to the targeted group. Design/methodology/approach - An experiment was conducted with a two (customers categories: present/prospective customer) × two (inequality conditions: advantaged/disadvantaged condition) between-subject design. A total of 104 valid questionnaires were completed with a minimum of 24 participants per cell. Findings - Present customers perceive higher unfairness than prospective customers when faced with disadvantaged conditions. However, perceived unfairness was not significantly different when faced with advantaged conditions. Further, perceived unfairness cognitively and affectively influences purchase intentions through perceived value and negative emotions. Practical implications - Although prospective customers are price-sensitive, targeted promotions should favor present customers instead of prospective customers to lower the perceived price unfairness of present customers. In addition, when relatively low prices are necessary to attract prospective customers, firms should create a type of "segmentation fence", where present customers are exposed as little as possible to special offers designed to attract prospective customers. Originality/value - This research contributes to three streams of literature. The first is related to perceived reference price unfairness, focusing on self/other comparisons (present versus prospective customers) rather than self/self comparisons. The second contribution is related to the outcomes of perceived price unfairness. The mediating effect of perceived value (i.e. cognitive outcomes) and negative emotions (i.e. affective outcomes) between perceived price unfairness and purchase intentions is examined concurrently. The third contribution is that this research raises echoes with the perspective of customer relationship management.

AB - Purpose - The purpose of the paper is to examine perceptions of unfairness and accompanying cognitive and emotional outcomes exhibited by present versus prospective customers when faced with targeted promotions. The targeted promotions were designed to be alternatively advantageous or disadvantageous to the targeted group. Design/methodology/approach - An experiment was conducted with a two (customers categories: present/prospective customer) × two (inequality conditions: advantaged/disadvantaged condition) between-subject design. A total of 104 valid questionnaires were completed with a minimum of 24 participants per cell. Findings - Present customers perceive higher unfairness than prospective customers when faced with disadvantaged conditions. However, perceived unfairness was not significantly different when faced with advantaged conditions. Further, perceived unfairness cognitively and affectively influences purchase intentions through perceived value and negative emotions. Practical implications - Although prospective customers are price-sensitive, targeted promotions should favor present customers instead of prospective customers to lower the perceived price unfairness of present customers. In addition, when relatively low prices are necessary to attract prospective customers, firms should create a type of "segmentation fence", where present customers are exposed as little as possible to special offers designed to attract prospective customers. Originality/value - This research contributes to three streams of literature. The first is related to perceived reference price unfairness, focusing on self/other comparisons (present versus prospective customers) rather than self/self comparisons. The second contribution is related to the outcomes of perceived price unfairness. The mediating effect of perceived value (i.e. cognitive outcomes) and negative emotions (i.e. affective outcomes) between perceived price unfairness and purchase intentions is examined concurrently. The third contribution is that this research raises echoes with the perspective of customer relationship management.

UR - http://www.scopus.com/inward/record.url?scp=36248968591&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=36248968591&partnerID=8YFLogxK

U2 - 10.1108/10610420710834931

DO - 10.1108/10610420710834931

M3 - Article

AN - SCOPUS:36248968591

VL - 16

SP - 481

EP - 491

JO - Journal of Product and Brand Management

JF - Journal of Product and Brand Management

SN - 1061-0421

IS - 7

ER -