3 component of attitudes
JOURNAL OF CONSUMER PSYCHOLOGY, 14(1&2), 181–185
Copyright © 2004, Lawrence Erlbaum Associates, Inc.
FREE GIFTS
RAGHUBIR WITH PURCHASE: PROMOTING OR DISCOUNTING THE BRAND?
Free Gift with Purchase: Promoting or Discounting the Brand?
Priya Raghubir
Haas School of Business
University of California, Berkeley
Two experiments examine the process by which free gift promotions serve as a source of information about the underlying value of the product offered as a free gift. The value-discounting hypothesis argues that by virtue of being offered as a free gift, products will be valued less as evinced by lower purchase intentions and a lower price that consumers are willing to pay for them. Conditions that inhibit the value-discounting effect include the (a) presence of alternate price information to make judgments about the value of the gift, and (b) contextual information about the value of the promoted brand.
A rich literature in sales promotions has shown that short-term sales are positively affected by offering promotions (for a review, see Blattberg & Neslin, 1990). However, the economic model of consumer promotions does not explicitly account for complementary routes through which promotions can affect consumer behavior. The notion that consumer promotions are informative and affect sales through more than offering a monetary incentive to purchase is not new (Inman, McAlister, & Hoyer, 1990; Inman, Peter,
& Raghubir, 1997; Raghubir, 1998), but it has never been applied to the context of free gift promotions. This article explores the information content of free gift offers, focusing on inferences drawn about the free gift, rather than the promoted product. “Free gift with purchase” offers appear to be inundating the marketplace. Whether they are in the cosmetics industry, in duty-free catalogs, or in your everyday supermarket shelves, marketers appear to be enticing consumers to buy their product through the offer of a free gift
Copyright © 2004, Lawrence Erlbaum Associates, Inc.
FREE GIFTS
RAGHUBIR WITH PURCHASE: PROMOTING OR DISCOUNTING THE BRAND?
Free Gift with Purchase: Promoting or Discounting the Brand?
Priya Raghubir
Haas School of Business
University of California, Berkeley
Two experiments examine the process by which free gift promotions serve as a source of information about the underlying value of the product offered as a free gift. The value-discounting hypothesis argues that by virtue of being offered as a free gift, products will be valued less as evinced by lower purchase intentions and a lower price that consumers are willing to pay for them. Conditions that inhibit the value-discounting effect include the (a) presence of alternate price information to make judgments about the value of the gift, and (b) contextual information about the value of the promoted brand.
A rich literature in sales promotions has shown that short-term sales are positively affected by offering promotions (for a review, see Blattberg & Neslin, 1990). However, the economic model of consumer promotions does not explicitly account for complementary routes through which promotions can affect consumer behavior. The notion that consumer promotions are informative and affect sales through more than offering a monetary incentive to purchase is not new (Inman, McAlister, & Hoyer, 1990; Inman, Peter,
& Raghubir, 1997; Raghubir, 1998), but it has never been applied to the context of free gift promotions. This article explores the information content of free gift offers, focusing on inferences drawn about the free gift, rather than the promoted product. “Free gift with purchase” offers appear to be inundating the marketplace. Whether they are in the cosmetics industry, in duty-free catalogs, or in your everyday supermarket shelves, marketers appear to be enticing consumers to buy their product through the offer of a free gift
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