Multiple Unit Price Promotions and their Effects on Quantity Purchase IntentionsJournal of RetailingManning, Kenneth C. and David E. Sprott
2007
Authors from the College of Business:
Kenneth C. Manning, Professor of Marketing, FirstBank Research Fellow
Multiple unit price promotions involve a price reduction in which a sale price is presented for multiple units of an item; for example, a $1 sale price conveyed as “Sale, 10 for $10.” In a series of experiments, we examined when and why these promotions lead consumers to purchase a higher quantity than economically equivalent single unit price promotions (e.g., “Sale, $1 each). We found that under certain conditions multiple unit price promotions do, in fact, result in consumers purchasing larger quantities than comparable single unit promotions. In particular, multiple unit promotions were most impactful when the suggested purchase quantity in the offer was high and the promoted product was one that is typically consumed at a fast rate. Our research indicated that the effectiveness of these promotions is driven largely by the thoughts they trigger. When consumers are exposed to multiple unit price promotions they tend to think about consumption experiences that are consistent with purchasing a relatively large quantity of the promoted product. For example, upon encountering a “5 bottles for $5” promotion on 2-liter soda, a consumer may consider the possible contexts in which household members would consume large amounts of the soda. These thoughts, which are consistent with the large quantity suggested by the promotion, exert a bias on purchase quantity decisions. Even if a consumer ultimately decides that five bottles would be excessive, the activation of knowledge consistent with the promoted quantity influences quantity purchase decisions in an upward fashion. Interestingly, even reminding consumers that they need not purchase multiple units of the product in order to receive the discounted price did not reduce the positive effect of these promotions on the quantities purchased. This research enhances understanding of this pervasive promotional technique and provides retailers with direction in terms of how to most effectively use multiple unit price promotions.