This paper aims to examine the effect of framing price promotion on consumers' purchase intentions. Retailers typically use the term “save” to present their price deal offers. However, prospect theory predicts that people will be more willing to waive the gain of a certain amount of money, but less willing to lose the same amount of money.
Using an experimental design, 497 participants were randomly assigned to two groups that differed only in the framing manipulations of two vignettes: positive framing (“save if you purchase”) or negative framing (“lose if you don't purchase”).
The prediction was not confirmed: participants did not show more willingness to purchase products offered in sales promotions of discount when presented with a negative frame relative to their presentation in the conventional positive frame.
Future research could confirm the predictions of prospect theory, indicating that methodological characteristics prevented this study from confirming the hypothesis. However, if future research fails to confirm the predictions of prospect theory, it is possible that these predictions are limited to situations of forced choice between two alternatives, and do not apply to situations with a default option of not making a choice (e.g. price deals).
If future research confirms the predictions of prospect theory, then retailers would improve their price promotion effectiveness by replacing their use of “save if you purchase” with “lose if you don't purchase”.
This study is the first attempt to examine the predictions of goal framing effect in the context of price deals.
