Retail advertisers often attempt to provide additional meaning to a price reduction by expressing the offer using a variety of semantic cues.  These semantic cues can broadly be classified as those comparing the prices between stores (“Seen Elsewhere for $100, Our price $79.99”), and those comparing prior prices to current prices in the same store (“Was $100, Now $79.99”).  Prior research indicates that semantic cues comparing the prices between stores are more effective in affecting consumer evaluations than those comparing prior prices in the same store, and that semantic cues are most effective at moderate, rather than exaggerated, discount levels. Prior research also indicates that between-store semantic cues are more effective when the advertisement is viewed at home, while the within-store semantic cue is more effective when viewed in the store.  In this research we contend that the effects that semantic cues have on consumer evaluations will be moderated by cue concreteness.

Concrete cues are those that possess a greater amount of detail and specificity than abstract cues, which are vague with respect to whom a comparison is being made. Concrete cues possess clearer information, are more specific with respect to price comparison information, and are hypothesized to lead to better consumer evaluations in the form of perceived value of the deal and intention to search for information before shopping. Over two experimental studies, we found that cue concreteness does impact consumers’ evaluation of semantic cues in price promotions.  We found that in the concrete cue condition the between-store cue was more effective than a within-store cue, and these results were stronger in the moderate discount condition rather than in the exaggerated discount condition. This differential effectiveness, however, was not present in the case of abstract cues.  Some interesting observations can be drawn from these results, particularly those associated with exaggerated discounts.

When discounts are exaggerated, neither the nature of the price comparison nor cue concreteness has any effect on value of the deal. This finding supports the notion that the focal price cue plays a stronger role when discounts are large. However, when discounts were exaggerated, between-store cues reduced intention to search more than within-store cues in both concrete and abstract cue conditions. The findings associated with abstract cues have implications for public policy makers as they may be concerned about the possible ill effects of exaggerated external reference prices and/or discounts. Still, public policy makers should view our results favorably since consumers react favorably to concrete, rather than abstract cues. The lack of positive response to abstract cues in advertisements implies that marketplace mechanisms could help lower the instances of such advertising practices.

Our research also has implications for practitioners, as it is important to know what types of semantic cues are favorably processed by consumers. Our research sheds light on the subject by recommending that concrete cues are likely to be more favorably viewed by consumers compared to abstract cues for moderate levels of discounts. Retailers who are comparing their price to that of a competitor in the market (between-store comparison) may be better off by naming the competition with whom the comparison is being made instead of the often used tactic of using abstract or vague comparisons such as, “Seen Elsewhere for $49, Our price $ 39.” Further, for within-store price comparisons, a “regular price – sale price” format (provided sufficient quantities have been sold at the regular price) is likely to have effects stronger than that of abstract claims such as, “A $49 value, Sale price $ 39.” It may be in the retailer’s best interest to use concrete cues even for within-store price comparisons. Finally, given that consumers are generally likely to be exposed to price promotion ads outside the store setting (e.g., at home), it is in the best interest of the retailer to use concrete between-store comparisons. Our results show that value of the deal is the highest and search intention lowest when consumers are exposed to concrete between-store price comparisons outside of a store setting.