Effect of discount frame on consumer responses: moderation of psychological distance and product nature

According to construal level theory, close (versus far) psychological distance is associated with low (versus high) construal level. Despite the evidence for discount frame effect, it is unclear whether psychological distance and product nature play moderating roles. In addition, little has been known whether the effect of discount frame can extend to other dependent variables such as willingness to pay (WTP). Driven by construal level theory, five experiments were conducted to explore whether the effect of discount frame is dependent on psychological distance and product nature (i.e. utilitarian versus hedonic product).

The experimental method was used, with discount frame, psychological distance and product type as the independent variables and purchase intention, attitude towards the advertisement, perceived value and WTP as the dependent variables. Participants were presented with promotion scenarios in which psychological distance and discount format were manipulated. In order to test the generalizability of results, promotional scenarios for both utilitarian (i.e. backpack bag and shampoo) and hedonic products (i.e. scenery ticket and perfume) were presented. Data were collected via the online experiment platform (i.e. www.Credamo.com).

The authors found an interaction between discount frame and spatial distance in that consumers had more positive attitude toward percent off than amount off under near-spatial distance. However, no interaction was observed between discount frame and temporal, social or hypothetical distance.

Taken together, the current study for the first time reveals that the effect of discount frame is contingent on a specific dimension of psychological distance (i.e. spatial distance), regardless of whether the product is utilitarian or hedonic. Findings from this study for the first time pose a challenge to the notion that construal-level match necessarily leads to more favorable consumer responses, suggesting that there may be a unique mechanism underlying the joint effects of spatial distance and discount frame. The current findings can provide important implications for marketers and retailers in an effort to design effective promotional messages.