Why and under which Conditions are Price Lotteries Effective at Promoting Products?

摘要

In recent years, retailers have developed numerous innovative promotion instruments to attract their customers. One of these instruments is the use of price lotteries. When applying a price lottery, a predetermined portion of the retailer's customers receives the promoted product or even the entire contents of their shopping basket for free. We address the questions of why and under which conditions price lotteries affect the purchase intentions and choice shares, and we compare the effectiveness of this instrument with the effectiveness of price discounts. In our first study, we focused on the question of why price lotteries affect consumer's purchase intentions. A mediation analysis reveals that price lotteries can elicit feelings of thrill and hope that spill over positively to purchase intentions. Moreover, price lotteries are more complex and thus are more difficult to understand what reduces their effectiveness. The second experiment in which respondents had to choose between a promoted and a non-promoted product was designed to test conditions under which consumers tend to choose a product promoted by a price lottery. Our results show that the attractiveness of products promoted by price lotteries depends on the product's potential to deliver luxury benefits.