Impact of Premium and Price Cuts on Consumer Purchase Intention: Comparison Between Taiwan and Indonesia

Yi-Fen Chen, Chia-Wen Tsai and Priscilia Vanessa Kuswanto
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Yi-Fen Chen: Department of International Business, Chung Yuan Christian University, Taiwan
Chia-Wen Tsai: Department of Information Management, Ming Chuan University, Taiwan
Priscilia Vanessa Kuswanto: Department of International Business, Chung Yuan Christian University, Taiwan

International Journal of Technology and Human Interaction (IJTHI), 2022, vol. 18, issue 1, 1-26

Abstract: This study aims to compare the price cut and premium promotion with study moderators are discount depth size, product type, premium characteristics, and country effect (Indonesia and Taiwan). The experiment was designed as: (promotional discount / price cut) x 2 (discount depth size: high / low) x 2 (product type: hedonic / utilitarian) x 2 (country effect: Indonesia / Taiwan) and (promotional discount / premium promotion) x 2 (discount depth size: high / low) x 2 (product type: hedonic / utilitarian) x 2 (premium characteristics: related / unrelated) x 2 (country effect: Indonesia / Taiwan). Total of 12 groups of experimental design, verified by 808 valid questionnaires were studied (420 from Indonesia and 387 from Taiwan). The results revealed that the impact of price cut on purchase intention is systematically more than that of equivalent premium promotion between Indonesia and Taiwan. Furthermore, when the discount depth size is low and product type is hedonic and the premium promotion could lead to higher purchase intention than price cut.

Date: 2022
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