Maximization, internal reference price and consumers' response to promotions

PurposeThis study shows the influence of consumers' goal and strategy of maximization on the process behind their behavioral response to price.Design/methodology/approachData was collected through a 2×2 experimental design involving 314 respondents and analyzed using PLS-SEM.FindingsThe results show that when buyers maximize, their transaction value and acquisition value perceptions predict their behavioral response to deals and discounts. Further, these buyers do not consider sales price information to form their internal reference price. On the other hand, when buyers satisfice, their transaction value perceptions predict the behavioral responses to price deals, and the relationship between transaction value and the behavioral response is not mediated by acquisition value. Further, such buyers consider sales price to form their internal reference price.Originality/valueThe theory of purchase value assumes that consumers seek to maximize their value. Our work relaxes this assumption to show how value maximizers (and satisficers) differ in the process of value formation and their responses to price promotions.