Effects of price promotions on the perceived price

Abstract

Purpose – This paper seeks to incorporate the study of the effect of price promotions into the traditional scheme of perceived price.Design/methodology/approach – The model is validated with an empirical analysis and applied to the study of the purchase behavior of a tour package.Findings – The results point out that price promotions directly and indirectly affect the formation process of perceived price. Thus, some differences are observed in the intensity of the above‐mentioned relationship according to the tendency of the consumer to seek advantageous prices. The results obtained might therefore be of great help to service managers in scheduling their promotional activities.Originality/value – A theoretical model that captures the effect of promotions in the consumer's price perception is configured.