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Do Price Promotions Help or Hurt Premium-Product Brands?

The Impact of Different Price-Promotion Types On Sales and Brand Perception

Felix Zoellner, Tobias Schaefers
DOI: 10.2501/JAR-2015-008 Published 1 September 2015
Felix Zoellner
BMW Group,
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  • For correspondence: felix.zoellner@gmail.com
Tobias Schaefers
TU Dortmund University,
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  • For correspondence: tobias.schaefers@udo.edu
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ABSTRACT

Although various types of price promotion are used to increase sales, they negatively may affect consumers' perceptions of a premium-product brand. The authors of this study believe their work advances the limited research in this area by distinguishing between direct- versus indirect-price reduction and marketers' use of a “precondition”—i.e., promotions offering free gifts, trade-in incentives, or loyalty-program benefits. Results of this two-part study, which combined sales data of German premium automobile brands with consumer-behavior analysis, showed that direct-price reduction had the strongest positive sales impact. Brand perception was least deteriorated by both direct-price reduction without a precondition—and indirect-price reduction with a precondition.

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Vol 55 Issue 3

Journal of Advertising Research: 55 (3)
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Do Price Promotions Help or Hurt Premium-Product Brands?
Felix Zoellner, Tobias Schaefers
Journal of Advertising Research Sep 2015, 55 (3) 270-283; DOI: 10.2501/JAR-2015-008

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Do Price Promotions Help or Hurt Premium-Product Brands?
Felix Zoellner, Tobias Schaefers
Journal of Advertising Research Sep 2015, 55 (3) 270-283; DOI: 10.2501/JAR-2015-008
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  • Article
    • ABSTRACT
    • MANAGEMENT SLANT
    • INTRODUCTION
    • LITERATURE REVIEW
    • HYPOTHESES DEVELOPMENT
    • STUDY 1: SALES IMPACT
    • STUDY 2: BRAND PERCEPTION
    • CONCLUSION
    • IMPLICATIONS
    • LIMITATIONS AND FUTURE RESEARCH
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  • The Effectiveness of Comparative Versus Non-Comparative Advertising
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