The effects of discount level and scarcity on the perceived product value in e-mail advertising

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ABSTRACT This study aims to fill the gap in knowledge by manipulating the discount level and scarcity in email promotions, in which affects four dimensions of perceived product value; social, emotional, price, and quality, which in turn, influences purchase intention and positive word of mouth. (N = 207) This study is based off of the Stimulus- Organism- Response (S-O-R) theory (Mehrabiann & Russell (1974). The S-O-R theory relates features of the email promotions (S) to the perceived product values; emotional, social, quality, and price (O) to the approach response behavior which tested by purchase intention and positive word of mouth (R). The four perceived product values were adapted from Sweeney and Soutar (2001). The study uses a 2X2 factorial design to manipulate the studying variables; discount level (high vs. low) and scarcity level (yes or no). The visual stimuli (pictures of email promotions) were developed by taking screen shots of actual e-mail promotions from Nike. The discount and scarcity level all had a positive relationship with the perceived values; emotion, social, quality, and price. Emotion, social, and price all had a positive relationship with purchase intention while the perceived quality value did not. Emotion and price values both had a positive relationship with positive word of mouth, yet quality and social values did not. It is important for retail marketers to combine both discount and scarcity messages in their email promotions especially when targeting Generation Y.

E-mail promotions, Scarcity, Discount promotions, Product value, Purchase intention, Word of mouth