Service Business

, Volume 10, Issue 1, pp 31–58 | Cite as

Do online discounts and free gifts damage brand image of service? The moderating role of promotion-proneness

  • E. Crespo-Almendros
  • S. Del Barrio-García
Empirical article


The present paper outlines a study based on an experimental design that investigated the effect of online price discounts and free gifts on consumers’ evaluation of the brand, in the context of an airline. The study also analyzed whether promotion-proneness exercises a moderating effect on this relationship. It was found that discounts generate a more positive brand image than free gifts among promotion-prone users, while for less promotion-prone individuals, the opposite is true. The results will help managers to select the most appropriate online sales promotion type for reaching different consumer groups, depending on their promotion-proneness, in line with the needs and objectives of the service firm.


Brand image Promotion-proneness Online sales promotion Online price discount Online free gift 


  1. Aaker DA (1991) Measuring brand equity across products and markets. Calif Manag Rev 38:102–120CrossRefGoogle Scholar
  2. Aaker DA, Alvarez Del Blanco RM (1995) Estatura de la marca: Medir el valor por productos y mercados. Harva-Deus Bus Rev 69:74–87Google Scholar
  3. Aena (2012) Annual report. Retrieved Oct 2012
  4. Aiken LS, West SG (1991) Multiple regression: testing and interpreting interactions. Sage Publications, Newbury ParkGoogle Scholar
  5. Ailawadi K, Neslin S, Gedenk K (2001) Pursuing the value-conscious consumer: store brands versus national brand promotions. J Mark 65(1):71–89CrossRefGoogle Scholar
  6. AIMC (2012) Encuesta Navegantes en la Red, Available at, February. Retrieved Oct 2013
  7. Alford BL, Biswas A (2002) The effects of discount level, price consciousness and sale proneness on consumers’ price perception and behavioral intention. J Bus Res 55(9):775–783CrossRefGoogle Scholar
  8. Ashton AS, Scott N, Solnet D, Breakey N (2010) Hotel restaurant dining: the relationship between perceived value and intention to purchase. Tour Hosp Res 10:206CrossRefGoogle Scholar
  9. Barry R, O’Connor TS (1976) The influence of price, store name, and brand name on perception of product quality. J Acad Mark Sci 4(4):722–730CrossRefGoogle Scholar
  10. Batra R, Ahtola OT (1990) Measuring the hedonic and utilitarian sources of consumer attitudes. Mark Lett 2(2):159–170CrossRefGoogle Scholar
  11. Bawa K, Shoemaker RW (1989) Analyzing incremental sales from a direct mail coupon promotion. J Mark 53:66–78CrossRefGoogle Scholar
  12. Bawa K, Srinivasan SS, Srivastava R (1997) Coupon attractiveness and coupon proneness: a framework for modeling coupon redemption. J Mark Res 34:517–525CrossRefGoogle Scholar
  13. Beirao AF (2001) The impact of sales promotion on brand value. 31st EMAC conference, Braga, May, 28–31Google Scholar
  14. Bem DJ (1965) An experimental analysis of self-persuasion. J Exp Soc Psychol 1(3):199–218CrossRefGoogle Scholar
  15. Bitner MJ (1991) The evolution of the services marketing mix and its relationship to service quality. In: Brown S, Gumemsson E, Edvardsson B, Gustavsson B (eds) Service quality: multidisciplinary and multinational perspectives. New York, Lexington Books, pp 23–37Google Scholar
  16. Blattberg RC, Neslin SA (1990) Sales promotion: concepts, methods and strategies, en Papatla P, Krishnamurthi L (1996) Measuring the dynamic effects of promotions on brand choice. J Mark Res 33(1):20–36Google Scholar
  17. Buil I, De Chernatony L, Martínez E (2013) Examining the role of advertising and sales promotions in brand equity creation. J Bus Res 66(1):115–122Google Scholar
  18. Bulik B (2000) Ad Nauseum. Bus 2.0 12(September):112Google Scholar
  19. Campbell L, Diamond W (1990) Framing and sales promotions: the characteristics of a good deal. J Cons Mark 7(4):25–31CrossRefGoogle Scholar
  20. Castañeda JA, Rodríguez MA, Luque T (2009) Identifying the hierarchy of effects operative in an internet attitude model allied to e-loyalty. Online Inform Rev 33(1):7–21CrossRefGoogle Scholar
  21. Chandon PP, Wansink B, Laurent G (2000) A benefit congruency framework of sales promotion effectiveness. J Mark 64:65–81CrossRefGoogle Scholar
  22. Chandrashekaran R, Grewal D (2003) Assimilation of advertised reference prices: the moderating role of involvement. J Retail 79:53–62CrossRefGoogle Scholar
  23. Chtourou MS, Chandon JL, Zollinger M (2005) Effect of price information and promotion on click-through rates for internet banners. Working papers, IAE Aix-en-ProvenceGoogle Scholar
  24. Chu S, Keh HT (2006) Brand value creation: analysis of the interbrand-business week brand value rankings. Mark Lett 17:323–331CrossRefGoogle Scholar
  25. Chu JH, Arce-Urriza M, Cebollada-Calvo JJ, Chintagunta PK (2010) An empirical analysis of shopping behavior across online and offline channels for grocery products: the moderating effects of household and product characteristics. J Interact Mark 24:251–268CrossRefGoogle Scholar
  26. Cohen J, Cohen P (1983) Applied multiple regression/correlation analysis for the behavioral sciences, 2nd edn. Erlbaum, HillsdaleGoogle Scholar
  27. Coker K, Pillai D, Balasubramanian S (2010) Delay-discounting rewards from consumer sales promotion. J Prod Brand Manag 19(7):487–495CrossRefGoogle Scholar
  28. Compeau LD, Grewal S (1998) Comparative price advertising: an integrative review. J Public Policy Mark 17(Fall):257–274Google Scholar
  29. Danaher PJ, Wilson IW, Davis RA (2003) A comparison of online and offline consumer brand loyalty. Mark Sci 22:461–476CrossRefGoogle Scholar
  30. Darke PR, Chung PMY (2005) Effects of pricing and promotion on consumer perceptions: it depends on how you frame it. J Retail 81(1):35–47CrossRefGoogle Scholar
  31. Davis S, Inman J, McAlister L (1992) Promotion has a negative effect on brand evaluations—Or does it? Additional disconfirming evidence. J Mark Res 29(1):143–148CrossRefGoogle Scholar
  32. Degeratu AM, Rangswamy A, Wu J (2000) Consumer choice behaviour in online and traditional supermarkets: the effects of brand name, price and other search attributes. Int J Res Mark 17(1):55–78CrossRefGoogle Scholar
  33. Della Bitta AJ, Monroe KB, McGinnis JM (1981) Consumer perceptions of comparative price advertisements. J Mark Res 18(November):416–427CrossRefGoogle Scholar
  34. DelVecchio D (2005) Deal-prone consumers’ response to promotion: the effects of relative and absolute promotion value. Psychol Mark 22:373–392CrossRefGoogle Scholar
  35. DelVecchio D, Henard DH, Freling TH (2006) The effect of sales promotion on post-promotion brand preference: a meta-analysis. J Retail 82(3):203–231CrossRefGoogle Scholar
  36. Diamond WD, Campbell L (1989) The framing of sales promotions: effects on reference price change. Adv Cons Res 16:241–247Google Scholar
  37. Dodson JA, Tybout AM, Sternthal B (1978) Impact of deals and deal retractions on brand switching. J Mark Res 15:72–81CrossRefGoogle Scholar
  38. Dowling GR, Uncles M (1997) Do customer loyalty programs really work? Sloan Manag Rev 38(4):71–82Google Scholar
  39. Eveland WP Jr, Dunwoody S (2001) User Control and structural isomorphism or disorientation and cognitive load. Comm Res 28(1):48–78CrossRefGoogle Scholar
  40. Faircloth JB, Capella LM, Alford BL (2001) The effect of brand attitude and brand image on brand equity. J Mark Theory Pract 9(3):61–75CrossRefGoogle Scholar
  41. Fogel SO, Thornton CG (2008) What a hassle! Consumer perceptions of costs associated with sales promotions. J Promo Manag 14(1/2):31–44CrossRefGoogle Scholar
  42. Forrester Consulting (2012) The impact of online coupons and promotion codes. Retrieved Feb 2013
  43. Fortin DR (2000) Clipping coupons in cyberspace: a proposed model of behavior for dealprone consumers. Psychol Mark 17(6):515–534CrossRefGoogle Scholar
  44. Franke M (2004) Competition between network carriers and low-cost carriers—Retreat battle or breakthrough to a new level of efficiency? J Air Transp Manag 10(1):15–21CrossRefGoogle Scholar
  45. Freund RJ, Wilson WJ, Ping S (2006) Regression analysis. Elsevier, USAGoogle Scholar
  46. Gaffney J (2001) The battle over internet ads. Bus 2.0 25 (July)Google Scholar
  47. Garretson JA, Clow KE (1999) The influence of coupon face value on service quality expectations, risk perceptions and purchase intentions in the dental industry. J Serv Mark 13(1):59–72CrossRefGoogle Scholar
  48. Gefen D (2000) E-Commerce: the role of familiarity and trust. Intern J Manag Sci 286:725–737Google Scholar
  49. Grewal D, Compeau LD (1992) Comparative price advertising: informative or deceptive? J Public Policy Mark 11(Spring):2–62Google Scholar
  50. Grönroos C (1984) A service quality model and its marketing implications. Eur J Mark 18(4):36–44CrossRefGoogle Scholar
  51. Gummenson E, Grönroos C (1988) Quality of services: Lessons from the product sector. In: Surprenant C (ed) Add value to your service. American Marketing Association, ChicagoGoogle Scholar
  52. Hair J, Black WC, Babin BJ, Anderson RE (2010) Multivariate data analysis, 7th edn. Pearson Education International, Upper saddle RiverGoogle Scholar
  53. Hardesty DM, Bearden WO (2003) Consumer evaluations of different promotion types and price presentations: the moderating role of promotional benefit level. J Retail 79(1):17–25CrossRefGoogle Scholar
  54. Hayes KJ, Ross LB (1998) Is airline price dispersion the result of careful planning or competitive forces? Rev Ind Org 13(5):523–541CrossRefGoogle Scholar
  55. Henderson CM (1994) Promotion heterogeneity and consumer learning: refining the deal-proneness construct. Adv Cons Res 21:86–94Google Scholar
  56. Hennig-Thurau T, Paul M (2007) Can economic bonus programs jeopardize service relationships? Serv Bus 1(2):159–175. doi: 10.1007/s11628-006-0012-9
  57. Hollis N (2005) Ten years of learning on how online advertising builds brands. J Adv Res 2:255–268CrossRefGoogle Scholar
  58. HubSpot (2013) Press release. Retrieved Jan 2014
  59. Hunt KA, Keaveney SM (1994) A process model of the effects of price promotions on brand image. Psychol Mark 11(6):511–532CrossRefGoogle Scholar
  60. Hupfer ME, Grey A (2005) Getting something for nothing: the impact of a sample offer and user mode on banner ad response. J Interact Adv 6(1):149–164Google Scholar
  61. IAB (2010) Interactive advertising Bureau. Retrieved Jan 2014
  62. IAB (2013) Interactive advertising Bureau, Retrieved Dec 2013
  63. IAB Spain (2012) Estudio sobre inversión publicitaria en medios digitales, Available at Retrieved Jan 2014
  64. Inman J, McAlister L (1993) A retailer promotion policy model considering promotion signal sensitivity. Mark Sci 12(4):339–356CrossRefGoogle Scholar
  65. Jarvenpaa SL, Todd PA (1997) Consumer reactions to electronic shopping on the World Wide Web. J Elect Comm 1(2):59–88Google Scholar
  66. Jones MA, Reynolds KE, Arnold MJ (2006) Hedonic and utilitarian shopping values: investigating differential effects on retail outcomes. J Bus Res 59(9):974–981CrossRefGoogle Scholar
  67. Joseph J, Sivakumaran B (2008) Do sales promotions necessarily erode brand equity? Maybe not. Advan Cons Res (forthcoming)Google Scholar
  68. Judge GG, Hill RC, Griffiths WE, Lütkepohl H, Lee TC (1988) Introduction to the theory and practice of econometrics. John Wiley & Sons, New YorkGoogle Scholar
  69. Jung K, Lee BY (2010) Online vs. Offline coupon redemption behaviors. Int Bus Econ Res J 9(12):23–36Google Scholar
  70. Kahn BE, McAlister L (1997) Grocery revolution: the new focus on the consumer. Addison-Wesley, ReadingGoogle Scholar
  71. Kahneman D, Tversky A (1979) Prospect theory: an analysis of decisions under risk. Econome 47(2):263–291. doi: 10.2307/1914185 CrossRefGoogle Scholar
  72. Karnani A, Wernelfelt B (1985) Multiple point competition. Strat Manag J 6:87–96CrossRefGoogle Scholar
  73. Keller KL (1993) Conceptualizing, measuring, and managing customer-based brand equity. J Mark 57(1):1–22CrossRefGoogle Scholar
  74. Kono K (1985) Are generics buyers deal-prone? On a relationship between generics purchase and deal-proneness. J Acad Mark Sci 13(1):62–74CrossRefGoogle Scholar
  75. Kumar V, Karande K, Reinartz W (1998) Measuring the impact of internal and external reference prices on brand choice: the moderating role of contextual variables. J Reta 74(3):401–426Google Scholar
  76. Laroche M, Yang Z, Gordon HG, McDougall JB (2005) Internet versus bricks-and-mortar retailers: an investigation into intangibility and its consequences. J Retail 81(4):251–267CrossRefGoogle Scholar
  77. Lichtenstein D, Netemeyer G, Burton S (1990) Distinguishing coupon proneness from price consciousness: an acquisition-transaction utility perspective. J Mark 54(July):54–67CrossRefGoogle Scholar
  78. Lichtenstein D, Ridgway NM, Netemeyer RG (1993) Price perceptions and consumer shopping behavior: a field study. J Mark Res 30:234–245CrossRefGoogle Scholar
  79. Lichtenstein D, Burton S, Netemeyer R (1997) An examination of deal proneness across sales promotion type: a consumer segmentation perspective. J Retail 73(2):252–283CrossRefGoogle Scholar
  80. Lo AK, Lynch JG, Staelin R (2005) How to attract customers by giving them the short end of the stick. Working paper, Social Science Research Network, Retrieved Oct 2012
  81. Lowe B (2010) Consumer perceptions of extra free product promotions and discounts: the moderating role of perceived performance risk. J Prod Manag 19(7):496–503Google Scholar
  82. Mandić D (2009) Long-term impact of sales promotion on brand image. Tržište/Market 21(2):235–246Google Scholar
  83. (2010) Restauración, Salud y Belleza los sectores más activos en usar cupones. Retrieved Dec 2013
  84. Martínez E, Montaner T, Pina JM (2007) Estrategia de promoción e imagen de marca. Influencia del tipo de promoción, de la notoriedad de la marca y de la congruencia de beneficios. Rev Española de Inves de Mark 11(1):27–52Google Scholar
  85. Martínez-Ruiz MP, Mollá-Descals A, Gómez-Borja MA, Rojo-Álvarez JL (2006) Evaluating temporary retail price discounts using semiparametric regression. J Prod Brand Manag 15(1):73–80CrossRefGoogle Scholar
  86. Martínez-Ruiz MP, Mollá-Descals A, Gómez-Borja MA, Rojo-Álvarez JL (2008) Using support vector semiparametric regression to estimate the effects of pricing on brands substitution. Intern J Mark Res 50(4):533–557Google Scholar
  87. Matteson G (1993) How to create a powerful marketing campaign using promotional products. Agric Mark 31(8):48–50Google Scholar
  88. McMeekin A, Miles I, Roy A, Rutter J (2000) Clicks and mortar: The new store fronts. The Retail E-Commerce Task Force of The Retail and Consumer Services Foresight Panel.
  89. Mela CF, Gupta S, Jedidi K (1997) Assessing long-term promotional influences on market structure. Int J Res Mark 15:89–107CrossRefGoogle Scholar
  90. Mela CF, Jedidi K, Bowman D (1998) The long-term impact of promotions on consumer stockpiling behavior. J Mark Res 35(2):250–262CrossRefGoogle Scholar
  91. Messenger PR, Narashiman C (1997) A model of retail formats based on consumers´ economizing on shopping time. Mark Sci 16(1):1–23CrossRefGoogle Scholar
  92. Mezirow J (1978) Perspective transformation. Adult Educ Quart 28(2):100–110CrossRefGoogle Scholar
  93. Montaner T, Pina JM (2008) The effect of promotion type and benefit congruency on brand image. J Appl Bus Res 24(3):15–28Google Scholar
  94. Montaner T, De Chernatony L, Buil I (2011) Consumer response to gift promotions. J Prod Brand Manag 20(2):101–110CrossRefGoogle Scholar
  95. Naidoo P, Ramseook-Munhurrun P (2012) The brand image of a small island destination: the case of Mauritius. Glob J Bus Res 6(1):55Google Scholar
  96. Nielsen (2010). Trends in online shopping. Retrieved April 2013
  97. Nielsen (2013) Press release. Retrieved on January 2014
  98. Norusis M (2004) SPSS 13.0 statistical procedures companion. Upper Saddle-River, Prentice HallGoogle Scholar
  99. Nunes JC, Park CW (2003) Incommensurate resource: not just more of the same. J Mark Res 40(February):26–38CrossRefGoogle Scholar
  100. Ortemeyer G, Huber J (1990) Brand experience as a moderator of the negative impact of promotions. Mark Lett 2(1):35–46CrossRefGoogle Scholar
  101. Palazón M (2005) La propensión a la promoción del consumidor: Una nueva perspectiva basada en beneficios. Rev Esp Invest y Mark 9(2):11–133Google Scholar
  102. Palazón M, Delgado E (2009) The moderating role of price consciousness on the effectiveness of price discounts and premium promotions. J Prod Brand Manag 18(4):306–312CrossRefGoogle Scholar
  103. Palazón M, Delgado-Ballester E (2011) The expected benefit as determinant of deal-prone consumers´ response to sales promotions. J Retail Cons Serv 18:542–547CrossRefGoogle Scholar
  104. Palazón-Vidal M, Delgado-Ballester E (2005) Sales promotions effects on consumer-based brand equity. Int J Market Res 47(2):179–204Google Scholar
  105. Park M, Lennon SJ (2009) Brand name and promotion in online shopping contexts. J Fashion Mark Manag 13(2):149–160CrossRefGoogle Scholar
  106. Peattie K, Peattie S (1995) Sales promotion—a missed opportunity for service marketers. Int J Serv Indus Manag 6(1):22CrossRefGoogle Scholar
  107. Phillips WJ, Back K-J, Kanter D (2008) Social image congruence and tourists’ visiting intention to conspicuous. 2008 international CHRIE conference—Atlanta, Georgia, USA, pp 410–418Google Scholar
  108. (2012). Press release. Retrieved January 2014
  109. Raghubir P (2004) Free gift with purchase: promoting or discounting the brand? J Cons Psychol 13(1/2):181–186CrossRefGoogle Scholar
  110. Raghubir P, Corfman K (1999) When do price promotions affect pretrial brand evaluations? J Mark Res 36:211–222CrossRefGoogle Scholar
  111. Roehm ML, Pullins EB, Roehm Jr HA (2002) Designing loyalty-building programs for packaged goods brands. J Mark Res 39(2):202–213Google Scholar
  112. Rossiter JR, Bellman S (2005) Marketing communications. Pearson Education Australia, Frenchs ForestGoogle Scholar
  113. Roth M (1994) Innovations in defining and measuring brand equity. Adv Cons Res 21:471–496Google Scholar
  114. Satorra A, Bentler PM (1988) Scaling corrections for statistics in covariance structure analysis, UCLA Statistics Series 2. University of CaliforniaGoogle Scholar
  115. Sawyer AG, Dickson PR (1984) Psychological perspectives on consumer response to sales promotion. In Low GS, Mohr JJ (2000) Advertising versus sales promotion: a brand management perspective. J Prod Brand Manag 9(6):389–414Google Scholar
  116. Schneider LG, Currim IS (1991) Consumer purchase behaviors associated with active and passive deal-proneness. Int J Res Mark 8:205–222CrossRefGoogle Scholar
  117. Sicilia M, Ruiz S (2010) The effects of the amount of information on cognitive responses in online tasks. Electron Comm Res Appl 9(2):183–191CrossRefGoogle Scholar
  118. Sophonsiri S, Polyorat K (2009) The impact of brand personality dimensions on brand association and brand attractiveness: the case study of KFC in Thailand. J Glob Bus Technol 5(2):51–62Google Scholar
  119. Spangenberg ER, Voss KE, Crowley AE (1997) Measuring the hedonic and utilitarian dimensions of an attitude: a generally applicable scale. Adv Cons Res 24:235–241Google Scholar
  120. Tan ST (1999) Strategies for reducing consumers’ risk aversion in Internet shopping. J Cons Mark 16(2):163–177CrossRefGoogle Scholar
  121. Tan S, Chua S (2004) While stocks last! Impact of framing on consumers’ perception of sales promotions. J Cons Mark 21(5):343–355CrossRefGoogle Scholar
  122. Terrence JK (1990) Frequent flyer programs: a failure in competitive strategy, with lessons for management. J Cons Mark 7(1):31–40CrossRefGoogle Scholar
  123. Thaler R (1983) Transaction utility theory. Adv Cons Res 10:296–301Google Scholar
  124. Tversky A, Sattath S, Slovic P (1988) Contingent weighting in judgement and choice. Psychol Rev 95:371-384Google Scholar
  125. Tybout AM, Scott SC (1983) Availability of well-defined internal knowledge and the attitude formation process: information aggregation versus self-perception. J Pers Soc Psychol 44(3):474–491CrossRefGoogle Scholar
  126. (2011) NCH annual coupon fact. Retrieved Jan 2014
  127. Vicdan H, Sun J (2008) Towards a framework for understanding compulsive buyers online: exploring the effects of online sales promotions. In SWDSI MeetingGoogle Scholar
  128. Wakefield KL, Barnes JH (1996) Retailing hedonic consumption: a model of sales promotion of a leisure service. J Retail 72(4):409–427CrossRefGoogle Scholar
  129. Wakefield KL, Inman J (2003) Situational price sensitivity: the role of consumption occasion, social context, and income. J Retail 79(4):199–212CrossRefGoogle Scholar
  130. Webster FE (1965) The ‘Deal-Prone’ consumer. J Mark Res 2(2):186–200CrossRefGoogle Scholar
  131. Whittaker S (2001) Schick`s cutting-edge mini-site. Dig Mark 2(March):5-6Google Scholar
  132. Wirtz J, Chew P (2002) The effects of incentives, deal proneness, satisfaction and tie strength on world-of-mouth behavior. Int J Serv Indust Manag 13(2):141–162CrossRefGoogle Scholar
  133. Wu WY, Fu CS, Huang HS, Wang HC (2010) Effects of sound stimuli applied in branding: an empirical study of its antecedents and consequences. Asian J Bus Acc 3(1):27–54Google Scholar
  134. Xie F, Donthu N, Lohtia R, Osmonbekov T (2004) Emotional appeal and incentive offering in banner advertisements. J Interact Adv 4(2):30–37CrossRefGoogle Scholar
  135. Yi Y, Yoo J (2011) The long-term effect of sales promotions on brand attitude across monetary and non-monetary promotions. Psychol Mark 28(9):879–896CrossRefGoogle Scholar
  136. Yoo B, Donthu N, Lee S (2000) An examination of selected marketing mix elements and brand equity. J Acad Mark Sci 28(2):195–211CrossRefGoogle Scholar
  137. Yu BM, Roh SZ (2002) The effects of menu design on information-seeking performance and user´s attitude on the World Wide Web. J Am Soc Inform Sci Technol 53(11):923–933CrossRefGoogle Scholar
  138. Zeithaml VA (1988) Consumer perceptions of price, quality and value: a means-end model and synthesis of evidence. J Mark 52:2–22CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Department of Marketing and Market Research, Business and Economics FacultyUniversity of GranadaGranadaSpain

Personalised recommendations