A study of time limited price promotions
| Published date | 24 July 2007 |
| Date | 24 July 2007 |
| DOI | https://doi.org/10.1108/10610420710763967 |
| Pages | 280-285 |
| Author | James Devlin,Christine Ennew,Sally McKechnie,Andrew Smith |
| Subject Matter | Marketing |
Pricing strategy & practice
A study of time limited price promotions
James Devlin, Christine Ennew, Sally McKechnie and Andrew Smith
Nottingham University Business School, Nottingham, UK
Abstract
Purpose – This paper seeks to provide a detailed study of the impact of offers incorporating a time-limit restriction on consumers in the context of price
promotions. Time limited offers are those where a pricing offer is only available for a specified, normally relatively short, period of time. Although price
promotions have been the subject of much previous research, a detailed study of the effects of time limit restrictions on consumer behavior is
warranted.
Design/methodology/approach – The study incorporates an experimental approach whereby the impact of time-limited and non time-limited offers
on consumers’ assessments of value and search and purchase intentions are isolated.
Findings – Findings show that the presence of a time limit does not impact directly on perceptions of value or search and purchase behavior. A
marginally significant interaction effect between time limit and discount size is present, impacting in particular on search behavior.
Research limitations/implications – The research was carried out in the context of a consumer durable good (TV) and it is recommended that the
study is replicated in other contexts, such as services and packaged goods, to ensure that the results reported here are generalisable.
Practical implications – The results suggest that policy makers should not assign significant time and resources to investigating influences of alleged
false time limit promotion, as the findings would lead to the conclusion that such resources would be better used controlling other forms of misleading
advertising and promotion. Marketing managers should note that time limited offers have no significant impact on consumer perceptions or purchase
intentions.
Originality/value – The paper is of value to both the policy making community and practitioners and provides important and original insights into the
minimal impact of time limit restrictions on consumers’ evaluation of price promotion offers and subsequent behavioral intentions.
Keywords Pricing, Experimentation, Promotional methods, Time measurement
Paper type Research paper
Introduction
Price promotions are a commonplace promotional activity
(Chandrashekaran and Grewal, 2003), normally aimed at
enhancing consumers perceptions of value and increasing the
likelihood of purchase (Grewal et al., 1998). Some aspects of
pricing promotion have proved controversial from a public
policy perspective (Urbany et al., 1988), not least due to the
potential for such advertising to deceive consumers due to
inaccurate or misleading pricing information being provided
(Grewal and Compeau, 1992). One way in which consumers
may be misled in price promotions is through the use of a
time limit restriction in an offer. An example would be a store
which has sale reductions marked “for one week only” or for a
“one day spectacular”. If such time limits are genuine, then
they represent additional information which may be useful to
consumers as they make purchasing decisions. However, if
such time limits are spurious and are not enforced by sellers,
then there is the potential for customers to be deceived and
make purchases under false pretences. Although Grewal and
Compeau (1992) speculated as to the impact on consumers of
semantic cues indicating a time limit, a detailed study of the
effects of time limited pricing promotions on consumer
behavior is warranted. Thus, the primary objective of the
current study is to investigate whether the presence of a time
limit restriction in pricing promotions influences consumer
perceptions of value associated with the offer and their search
and purchase intentions. Such an investigation is timely for
there has recently been an increasing recognition amongst
researchers of the need for marketers to have a deeper
understanding of the effects of contextual variables such as
time pressure or time constraints in influencing consumer
perceptions of value (Vermeir and Van Kenhove, 2005; Suri
and Monroe, 2003; Dhar and Nowlis, 1999; Kumar et al.,
1998).
The paper proceeds as follows: in section two, the potential
impact of time limit restrictions is discussed; section three
develops hypotheses and section four details the methodology
employed in the study. In section five results are analyzed.
Section six presents discussion and implications and finally in
section seven conclusions are offered.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
16/4 (2007) 280–285
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420710763967]
The authors would like to thank the Editor and two anonymous reviewers
for their valuable and constructive comments and suggestions and the
Office of Fair Trading, UK for funding this research project.
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