The effects of alternative price promotional methods on consumers' product evaluations and purchase intentions Jeanne Lauren Munger University of Southern Maine, USA Dhruv Grewal Babson College, USA Keywords Perception, Discounts, Pricing Abstract This research examines the effects of bundling format (partially-bundled attributes vs. unbundled attributes) and framing of promotional discounts (rebate, discount and free-options) on perceived quality, price acceptability, perceived value and subsequent purchase intentions. The results indicate that price reductions that are framed as providing ``free'' product options are perceived more favorably than conventional discounts which, in turn, are more favorable than rebates, holding the total amount of a price reduction constant. The results also suggest that unbundling of deals (or segregation of gains) enhances these perceptions. Introduction The concept that the perceived value of a product has a direct impact on behavior has been well substantiated by both marketing academics and practitioners. Because product quality and price directly influence value, it is no surprise that the efforts of marketers have focused on improving product quality and reducing price in order to enhance perceptions of value, and consequently purchase intentions (Dodds et al., 1991; Grewal et al., 1998). Considerable strategic effort has to be undertaken to make improvements in product quality and offer reductions in price (via cost reductions) in order to enhance perceived value. Tactical approaches, like presenting price information in a bundled vs. unbundled format and alternative forms of promotions (e.g. free options, conventional discounts and rebates), also influence perceptions of value and behavioral intentions (Grewal and Compeau, 1992; Compeau and Grewal, 1998). Therefore, marketers must consider both strategic actions that result in actual improvements as well as tactical acts that improve perceptions of value by presenting their products and promotions in the most favorable light. This research investigates the effects of different promotional price formats on perceptions of price, quality, value, and purchase intentions, while holding the absolute magnitude of the sales reduction constant. It extends previous research by proposing that these perceptions are indeed influenced The research register for this journal is available at http://www.mcbup.com/research_registers The current issue and full text archive of this journal is available at http://www.emerald-library.com/ft Dhruv Grewal would like to acknowledge the support of a University of Miami School of Business Summer Research Grant. The authors acknowledge the helpful suggestions made by participants at the Fordham Pricing Conference, Hooman Estelami, and Kent B. Monroe. Tactical approaches JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 10 NO. 3 2001, pp. 185-197, # MCB UNIVERSITY PRESS, 1061-0421 185 An executive summary for managers and executive readers can be found at the end of this article