Investigating the Effect of Various Price Discounts on Customers’ Purchase Intention and Loyalty with the Mediating Role of Perceived Deception (Case Study: Customers of Hedonic and Utilitarian Goods in Tehran City)

Perceived deception is one of the topics of interest in marketing. Although there is a significant background in this field, especially in the field of advertising, its connection with pricing has not been considered. In order to fill this research gap, the present study provides a conceptual model that examines the effect of price discounts on perceived deception and subsequent variables. The statistical population of this study is the buyers of hedonic and utilitarian goods, aged 18 and over in Tehran who have bought at least one product online or offline in the last 6 months. Using the convenience sampling method, 608 samples were obtained through the online questionnaire collection tool. This research was designed and implemented in the form of 6 scenarios, combining 3 price discounts (Regular, Tensile, and Gambling) and 2 types of Hedonic and Utilitarian products (instant coffee and refrigerator). The results of analyzing the collected data using structural equation modeling in Smart PLS software show that price discounts have an effect on perceived deception, and this effect is greater on uncertain discounts (Tensile and Gambling) than on regular discounts. Although the mediating effect of price consciousness on this relationship is not confirmed, the effect of perceived deception on dissatisfaction and perceived risk, as well as the effect of these three mediating variables on the two final dependent structures of purchase intention and loyalty, is confirmed.

Price, considered an essential part of marketing strategy, is an informational sign of fairness, the seller's ethical tendencies, and fair pricing policies. Price deception, the use of misleading pricing tactics, can be perceived by consumers through specific pricing tactics, even if the marketer does not intend to. Therefore, it is important for marketers to know when people consider pricing policies unfair and deceptive. Although perceived deception in advertising has been investigated before, it has not been seriously considered in association with pricing. In this study, by presenting a conceptual model, we examine the effect of price discounts, one of the important components of sales promotions, on perceived deception and its subsequent structures. Based on the dependence of positive and negative perceptions about discounts on the goods type, we survey the model in hedonic and utilitarian product scenarios. Since running discount promotional campaigns can be expensive and risks included, the results of this research can facilitate the decision-making path for marketing managers and business owners in this field and guarantee the efficiency and effectiveness of their marketing communications with their target market.

This applied study collected data with a quantitative survey strategy using questionnaires. The statistical population of this research comprised the buyers of hedonic and utilitarian goods aged 18 and above in Tehran who had bought at least one product online or offline in the last 6 months. Using the convenience sampling method, 608 samples were obtained through the online questionnaire collection tool. In the research plan implementation, 6 scenarios, combining 3 price discounts (Regular, Tensile, and Gambling) and 2 types of hedonic and utilitarian products (Instant Coffee and Refrigerator), were designed in which respondents were asked to answer questions after displaying an advertising banner (related to the desired product and discount). After confirming the validity and reliability of the collected data in SPSS software, due to the non-normal distribution of data, research hypotheses were surveyed using the principles of structural equation modeling (SEM) in Smart PLS software.

The results of the data analysis show that the effects of price discounts and three sub-types of Regular, Tensile, and Gambling discounts on perceived deception are confirmed. Also, based on the examination of the beta coefficients, the intensity of this effect is greater in non-deterministic (Tensile and Gambling) discounts than regular discounts and also is more intensified in utilitarian goods scenarios. These results correspond in 6 scenarios designed separately and also in their combination regardless of the product type. Although the moderating effect of price consciousness on the relationship between price discounts and perceived deception is not confirmed, the effect of perceived deception on perceived risk and dissatisfaction, as well as the effect of these three mediating roles on purchase intention and loyalty, are confirmed. It is worth mentioning that the quality of the measurement, structural and general SEM models of this research have been evaluated as qualified by the statistical indicators.

Based on the results of the present study which confirm the pricing perceived deception negative effects, marketers and enterprise owners are suggested to execute sufficient market research on their target community’s perceptions of these strategies, before deciding on their pricing policies and using promotional tactics such as price discounts. Comparing the effect intensity of 3 price discounts on perceived deception in different scenarios, it is suggested to use less non-deterministic discounts, especially in utilitarian goods promotions whose buyers have high price sensitivity. Also, applying measures to respond to buyers’ perceptions of price deception (for example, with client services, fair return policies, etc.) can control the harmful effects of perceived deception. To manage the effects on purchase intention and loyalty, clarifying pricing promotion policies, as well as using tools affecting post-purchase behaviors, is recommended. A comprehensive investigation of perceived deception in other aspects of pricing and in combination with other marketing fields can provide important research backgrounds for future research attempts and influence the effectiveness of business owners' marketing efforts.