Sales framing, mental accounting, and discount assignments

Abstract

This investigation explores the effect of sales framing on the attractiveness of mixed promotions. The authors propose that the “focused-discount” promotion format (e.g., 50% off the purchase of a second item) is more attractive to consumers than the “all-discount” promotion format (e.g., 25% off the purchase of two items) due to the effect that different frames have on the mental accounting processes of consumers. In Experiments 1 and 2, participants confronted by focused-discount (vs. all-discount) promotion assigned a relatively higher discount value to the final product and perceived greater savings. In Experiment 3, priming participants to focus on the first item reduced this framing effect of mixed promotions. The results show that participants perceived greater savings in a focused-discount framing (vs. all-discount) due to the differences in how discounts were assigned for each item. Finally, this paper suggests that companies may frame promotions to increase their relative attractiveness to consumers.

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