Price promotions, beneficiary framing, and mental accounting

• Published in: Quantitative marketing and economics 2023-06, Vol.21 (2), p.147-181
• Main Authors: Fisher, Geoffrey, McGranaghan, Matthew, Liaukonyte, Jura, Wilbur, Kenneth C.
• Format: Article
• Language: English
• Subjects: Business and Management; Discount coupons; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Finance; Insurance; Management; Marketing; Purchase intention; Statistics for Business
• ISSN: 1570-7156; 1573-711X
• DOI: 10.1007/s11129-023-09261-0

We introduce the idea of beneficiary framing to the promotion response literature. Two large-scale field experiments (total N  = 73,010) in the context of print-at-home coupons show that framing a savings message as affecting a beneficiary (i.e., “save for X”) increases coupon printing and redemptions. This beneficiary framing effect is equivalent to an incremental $0.05 (3.4%) of coupon value. We report eight additional studies (total N  = 3,052) to investigate the mechanism, replicability, and role of salience. We find evidence supporting a mental accounting explanation: participants with beneficiary-related budget categories rate beneficiary-framed coupons as more account-relevant and more valuable than non-beneficiary-framed coupons. The experiments further suggest that the beneficiary framing effect (i) holds across multiple common budgeting domains, (ii) cannot be fully explained by an affect transfer mechanism, (iii) is not solely attributable to the visual salience of the beneficiary framing treatment, and (iv) exhibits a boundary condition in which beneficiary framing may reduce promotion response when the recipient does not have a relevant beneficiary. Overall, the results suggest a low-cost approach that some marketers can use to increase promotion uptake.