Framing the communication: The effectiveness of price promotion in the cash&carry format

Guido Cristini, Maria Grazia Cardinali and Benedetta Grandi

Micro & Macro Marketing, 2019, issue 2, 285-312

Abstract: Understanding how to increase satisfaction and loyalty is of interest to retailers since it has been demonstrated that loyal customers are more profitable than non-loyal ones. The extant literature demonstrated that marketing mix components can affect the satisfaction and loyalty to the retailer. These levers can be divided into two groups: micro (price differentiation, fidelity cards) and macro (price, assortment, private label, services) levers. Among macro ones, price seems to be the most important variable able to influence the selection of a retailer, the level of satisfaction and loyalty. However, customers are not able to judge the real value for money, so it is very important to analyze the perceived price image and to identify the variables on which it depends on. Previous studies have demonstrated that our perceptions, judgments and even preferences are influenced by the way decision problems are framed, so how pricing strategies are communicated is a critical element. This is true, not only for companies that face with final customers but also for wholesalers and, specifically, for Cash and Carry wholesalers, which face with final customers, restaurants and retailers. But, if on one hand, price communication has been deeply investigated in the retailing sector, the same cannot be said for what concerns wholesalers and, in particular, Cash and Carry format. For these reasons, the present work aims to analyze the impact of different ways of price communication can affect customers' satisfaction and loyalty in the Cash and Carry format, through focus groups methodology, given the novelty of the topic. Findings could help wholesalers to more optimally communicate price promotions in order to better meet the needs of different types of customers and increase the level of satisfaction.

Keywords: Wholesaler; Cash and Carry; Framing; Price Promotion; Communication. (search for similar items in EconPapers)
Date: 2019
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