Framing the Deal- the Role of Restrictions in Accentuating Deal Value

Abstract

We propose that consumers use the presence of a restrict ion (i.e., purchase limit,purchase precondition, or time limit) as a source of information to evaluate adeal. In a series of four studies we present evidence suggesting that restrictionsserve to accentuate deal value and act as " promoters" of promotions. We beginby using aggregate level scanner data to test our hypothesis that a sales restric-tion (e.g., "limit X per customer") results in higher sales. Via three subsequentexperiments, we then investigate contextual and i nd ividual factors moderatingthis effect. Study 2 suggests that restrictions only have a positive effect for lowneed for cognition individuals. Study 3 explores the potential mediating role ofdeal evaluations on purchase intent across discount levels. Study 4 examinesthe effect of three types of restrictions (purchase lim its, time limits, and purchasepreconditions) across discount levels and explores the underlying beliefs drivingthese effects. An integrative model across studies demonstrates the robustnessof the restriction effect and supports the premise that restrictions work throughsignaling value. Implications for ho w consumers determine promotional value are discussed.