Library Dissertation Showcase

A Study of the Influence of Price Promotion on the Consumer Decision Making Process in the Retail Environment

  • Year of Publication:
  • 2019

The purpose of this study was to adopt multiple academic perspectives, in order to gain a new understanding of the decision making process of consumers, with particular attention to the influence of price promotions.
The study begins with the development of a theoretical understanding of multiple concepts that motivate behaviour from a variety of academic fields, followed by an experimental evaluation of these concepts when applied to consumer decision making.
Major findings of the research are that some motivating traits are more prevalent in particular demographics, but most interestingly, the research provided reason to doubt the overarching validity of some motives, due to their tendency to simultaneously enhance and decrease the subjective value of a purchase. The most prominent example of this from the research, is the finding that consumers appear to have actively avoided the purchase of a particular product if it has an advertised price promotion, despite the understanding of “transaction utility” developed in the literature review. This phenomenon is explained in a purchase decision model constructed by the researcher.
The summative findings of the research are as follows: Subjective financial risk can enhance the effectiveness of a price promotion, but that promotion may enhance subjective performance risk meaning the net effect on demand and sales can be negative. Furthermore, a price promotion is a very memorable trait of a purchase, as well as product information, whereas the price of a product is much less memorable. Finally, the research provided reason to doubt the importance of reference price in purchase decisions, however, it is very likely that the research has proven that the RRP of a product does not suffice as a consumer’s reference price for a product.

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