The Effect of Price Framing and Restrictions of Pre-selling Accommodation Coupons on Customer Perception

Abstract

Service organizations are shifting toward investing more of their budget for sales promotional techniques rather than advertising because they tend to yield quicker and more measurable profits. Kindel (1993) reported that some organizations in service industries are allocating up to 75% of their budget to sales promotions, including designing and distributing coupons to the market. Normally, there are three major differences between service industries and packaged goods companies: (1) “finished” services cannot be inventoried, so unused productive capacity is perishable, (2) except for repair and maintenance, there are normally no physical distribution channels for services, and (3) there is direct personal contact with customers. Thus, service promotions are harder to implement than packaged goods promotions because it is more time-consuming and expensive to communicate their existence to consumers (Lovelock & Quelch, 1983). How to choose an effective promotional technique and to operate it well are important issues for service industries

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