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Children's response to sales promotions and their impact on purchase behavior
Available online at www.sciencedirect.com
Journal of Consumer Psychology 22 (2012) 272 – 279
Research Report
Children's response to sales promotions and their impact on purchase behavior☆ Wendy Attaya Boland a,⁎, Paul M. Connell b , Lance-Michael Erickson c a
Kogod School of Business, American University, 4400 Massachusetts Ave, NW, Washington, DC 20016, USA b Stony Brook University, Stony Brook, NY 11794, USA c Berkeley College, 3 East 43 St., New York, NY 10017, USA Received 4 August 2010; received in revised form 26 March 2011; accepted 12 April 2011 Available online 23 May 2011
Abstract Despite the growth in children's purchasing power, surprisingly little is known about how children respond to sales promotions. We conduct two experiments to address this issue. Study 1 shows that elementary-aged (second and fifth grade) children's purchase decisions are influenced by the presence of sales. Study 2 demonstrates that both age groups favor conceptually easier promotions, even when the sale is inferior. Additionally, we find that children have difficulty applying mathematical concepts to sales promotions, regardless of classroom mastery of the associated operations. Together, these results indicate that elementary-aged children routinely incorporate sales into purchase decisions, sometimes with suboptimal results. © 2011 Society for Consumer Psychology. Published by Elsevier Inc. All rights reserved. Keywords: Children; Sales promotions; Purchase decisions; Mathematical knowledge
Anyone who has had children accompany them on a shopping trip has probably heard a child use some variation on the phrase, “But it's on sale!” in an attempt to secure the purchase of a desired object. Because sales have potential to influence children's shopping behavior, the study of children's responses to sales promotions has important theoretical and practical contributions to our overall understanding of children's shopping skills. Additionally, a better understanding of children's shopping behavior is essential if we are to learn how best to socialize children as consumers and ultimately to build foundations for effective consumption strategies when they become adults.
☆ The authors wish to thank Mrs. Ann Chen and Mrs. Jeanne Boland for access to their classes and for their help during the study and Merrie Brucks for her comments on the manuscript. ⁎ Corresponding author. E-mail addresses: [email protected] (W.A. Boland), [email protected] (P.M. Connell), [email protected] (L. Erickson).
Children have more buying power than ever, and are participating in family decision making to a greater extent than they have in the past. Children under 12 years old constitute a powerful market segment in their own right, and are influential in their families' purchase decisions (Darley & Lim, 1986; Foxman, Tansuhaj, & Ekstrom, 1989; McNeal, 1992; Nelson, 1979). According to one estimate, children under age 14 influenced as much as 47% of American household spending in 2005, including $40 billion of their own money (The Economist, 2006). Due to the increasing presence of children in the marketplace, marketers have developed a vast number of strategies to reach young consumers (Kline, 1995). Consequently, this has led to more research in the development of children's consumer skills, with the goal of identifying the specific skills necessary to become effective consumers. Due to the increased role children play in the consumption arena, researchers have amassed an impressive amount of knowledge related to the consumer socialization of children (see John, 1999 or 2008 for a complete review), especially in the areas of advertising knowledge (e.g., Robertson & Rossiter,
1057-7408/$ - see front matter © 2011 Society for Consumer Psychology. Published by Elsevier Inc. All rights reserved. doi:10.1016/j.jcps.2011.04.003
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1974), understanding of the shopping process (Peracchio, 1992; John & Whitney, 1986), the effects of marketing stimuli on recall (Ellis, Holmes & Wright, 2010; Hang & Auty, 2011), and children's influence strategies (Belch, Belch, & Ceresino, 1985; McNeal, 1992; Rust, 1993; Ward & Wackman, 1972). However, there are still gaps in knowledge of how children acquire critical consumer skills, particularly in the area of shopping skills (e.g., price knowledge, value judgments, and sales promotions). There has been very little research on children's reactions to sales promotions. Yet, as participants in the marketplace, children are exposed to sales promotional messages. During a shopping trip, children routinely navigate the retail environments where signs, labels, and displays call out for consumer attention: “on sale,” “clearance,” and “20% off.” These visual promotions stimulate consumers to buy and have a significant impact on brand choice (Bawa & Shoemaker, 1987; Krishnamurthi & Raj, 1991; Guadagni & Little, 1983, 1998; Gupta, 1988; Lattin & Bucklin, 1989; Luna & Kim, 2009). Research suggests that children are likely to be especially vulnerable to such tactics. A wealth of child development literature demonstrates that children under age 12 are drawn to visually salient stimuli rather than conceptual themes (Calvert, Huston, Watkins, & Wright, 1982; Flavell, Miller, & Miller, 2002; John & Sujan, 1990; Lorch, Anderson, & Levin, 1979), and are drawn to immediate cues rather than strategic thinking (Collins, Wellman, Keniston, & Westby, 1978; Mischel & Ebbesen, 1970), which suggests that sale cues may exert particular influence on children's purchase decisions. Due to children's increased buying power and the pervasiveness of sales promotions as a marketing tactic, we focus on this neglected area of research (i.e., how children respond to sales promotions). We begin the paper by defining the concept “sale” and reviewing literature that describes the effects of sales promotions on a purchase decision. Following this, we discuss literature on children's understanding of the shopping process and how they gain shopping knowledge and understanding. Next, we present a pilot study followed by two pretests aimed to confirm that elementary-aged children have a basic understanding of sales promotions. Once we establish these children's understandings of sales promotions, we present two focal studies that test how elementary-aged children (specifically 2nd and 5th graders) evaluate and respond to in-store sales promotions and how these promotions impact their purchases. We conclude with a discussion of our findings and ideas for future research. Conceptual background Consumer understanding of sales promotions In-store sales promotions take a number of forms (e.g., bundles, Buy One Get One sales (BOGOs), etc.), each offering a temporary price reduction. Retailers use these types of sales for a number of reasons, including stimulating purchases, clearing inventory, passing on manufacturer incentives, and driving store traffic (Blattberg & Neslin, 1990). Sales have varied effects on consumers: 1) sales can induce trial (Scott 1976), brand switching (Sun, Neslin, & Srinivasan, 2003), and stockpiling (Bell, Iyer, &
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Padmanabhan, 2002); 2) sales have been shown to induce affect (Honea & Dahl, 2005); and 3) framing of promotions and the difference between the regular price and sale price can influence perceptions of deal value and product quality (Coulter & Norberg, 2009; Darke & Chung, 2005). Moreover, the main purpose of a sales promotion is to create urgency in the shopper's mind, thus persuading them to purchase (Inman & McAlister, 1994; Neslin, Henderson, & Quelch, 1985). Thus, whatever their purpose or form, sales result in a perceived change to the regular price of a product. While these studies provide a good understanding of how adults respond to sales promotions, no previous research provides insight on how elementary-aged children respond to similar attempts. Children's acquisition of marketplace knowledge To understand how children learn and process sales cues, we must first consider how elementary-aged children (ages 5–12) acquire knowledge and specifically how they learn terminology. Children learn their first words by associating them with objects that are present when the word is said, for example, mommy or dog (Bloom, 2001a). A key point in understanding children's knowledge acquisition is that children of all ages acquire an understanding of new terms by linking sound and word meanings through experience (Bloom, 2001b). Because younger children have more difficulty storing event sequences in their memory, they rely even more on everyday experiences to enhance their understanding of new concepts (Paris & Lindauer, 1983). There is evidence of this in the consumer behavior literature, where younger children have been shown to have more difficulty explaining shopping-related concepts outside of the shopping context (Peracchio, 1992), and demonstrate poorer comprehension of the sequence of events in a typical shopping trip (John & Whitney, 1986). This suggests that children require a minimum level of marketplace knowledge before they can understand terms related to shopping. Just as children incrementally learn terminology as they age, they also develop mathematical knowledge and skills. Therefore, we need to consider how children develop conceptual and numerical fluency. At age two or three, children start to assign verbal labels to amounts and sizes (a lot, a little, etc.). Counting strategies emerge relatively quickly after this point. By age three or four, correspondence between number words and their quantities is accurate (Gallistel & Gelman, 1992; Geary, 1994). Once this is mastered, counting efficiency is notably increased, and children can begin to manipulate numbers without requiring that countable objects be physically present (Fuson, 1988). These basic mathematical abilities appear to occur spontaneously in children regardless of whether they are formally taught to them or not (Flavell et al., 2002; Gelman, 1990, 1991; Gelman & Meck, 1983; Gelman & Williams, 1998; Wynn, 1998). While basic mathematical abilities such as counting appear to occur spontaneously, evidence suggests that higher order operations appear to be social phenomena that must be taught, with higher order operations following lower order operations (Flavell et al., 2002; Gauvain, 2001; Saxe, Guberman, & Gearhart, 1987). By age eight or nine, children in American
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school systems typically start to master multiplication (Geary, 1994). While children are taught these operations in school, previous research indicates that children perform better on tasks when they have domain-specific knowledge about the task (Carraher, Carraher, & Schliemann, 1985; Flavell et al., 2002; Saxe, 1991, 1999; Nunes, Carraher, & Schliemann, 1993). Flavell et al. (2002) argued that, in the case of problem-solving, experience trumps age and traditional stage theories are flawed in that they overestimate the performance of older children and underestimate the performance of younger children. Nevertheless, children have considerable difficulty learning skills that are applied from one context to another. For example, a number of studies demonstrate that a sample of child street vendors between 9 and 15 years old were able to perform a large number of complex and difficult mathematical computations quickly for the purposes of conducting transactions (Nunes et al., 1993; Saxe, 1991; 1999), even in the absence of formal education, but had difficulty applying their knowledge to other contexts and performed poorly on abstract operations tests (Carraher et al., 1985; Saxe, 1999). In this case, these child street vendors possess a great deal of marketplace knowledge but have not mastered operational knowledge. We believe that we will observe a similar pattern of behavior in American schoolchildren, who may have knowledge of operations but limited experience with actual marketplace transactions. This line of reasoning is consistent with findings that children have difficulty in applying shopping concepts in absence of their context (John & Whitney, 1986; Peracchio, 1992) and arguments that elementary mathematics pedagogy is at odds with the necessity for operations to be applied to particular contexts in order for children to be able to use them in everyday life (e.g., Cobb, Yackel, & Wood, 1992; Sfraza 2008). Thus, children in elementary school should be able to determine the result of a sale framed in dollar-off terms (e.g. “save $5.00”) since it requires a single subtraction operation and is more easily applied. Conversely, elementary-aged children should have trouble with sales framed in percent-off terms (e.g. “20% off”) because they require multiple operations that have not yet been learned in younger children (e.g., second grade) and have been recently learned, but not applied to marketplace contexts, in older children (e.g., fifth grade). Of course, errors in computation are not the only difficulty that children may face in interpreting numeric sale cues. Children must first understand the concept that the sale reduces the regular price, and they must understand how the information conveyed in the cue can help them determine the new (sale) price. Research suggests that by age eight or nine, children understand that products have prices, know where to look for price information, and know that prices may vary by store (McNeal & McDaniel, 1981). However, children often do not include prices when asked to draw pictures about shopping (McNeal, 1992) and do not ask about prices when searching for information that is relevant to a purchase decision (Ward, Wackman, & Wartella, 1977). A number of potential explanations exist for children's relative lack of attention to price information. For one, young children tend to be perceptually bound, focusing on salient perceptual features of products (e.g., size, color) and ignoring underlying features (e.g., performance, quality) (John & Sujan, 1990).
Because price is often a product attribute not as readily apparent as size, color, or even brand name, it may be a feature that children routinely overlook. Another consideration is that children are often in shopping situations where they are not expected to pay for items themselves. Younger children get fewer opportunities for independent shopping compared to older children (Rose, 1999), and they also have less income under their direct control (McNeal, 1998). When the child is not responsible for payment, price may not be a focal attribute in their choice process. However, when price information is augmented by a sale cue, the perceptual salience of price is increased. Thus, a sale may work to direct children's attention to a product attribute—price—they might otherwise not have noticed or considered. Therefore, we expect that elementary-aged children will incorporate the presence of a sale into their own purchase decisions, making them more likely to select a sale item over a non-sale item. More formally: H1. The presence of a sale will increase the likelihood that both younger (second grade) and older (fifth grade) children select an item for purchase. While we expect that most elementary-aged children believe they will be better off by choosing a sale, their inability to assess the outcome of a sale leaves them vulnerable to poor decisions in situations where either 1) the “sale” does not represent a better deal than the regular price; or 2) competing sales on the same item result in different outcomes. When faced with competing promotions, we expect both younger (second grade) and older (fifth grade) children to choose the conceptually easier promotion, even if it represents a suboptimal outcome. The limited ability to apply operations regardless of their level of mastery of the operation is expected to drive this effect. H2. Both younger (second grade) and older (fifth grade) children will favor promotions framed as quantity discounts (e.g., “buy one, get one free”) rather than percentage discounts (e.g., “50% off”), regardless of which option represents the best deal. Method We began our analysis by running a pilot study to determine the two grade levels used in our data sample. Here, we showed children of each grade (first through fifth) a three-picture series of a mother and children shopping. Children were asked to write a story describing the picture series. First and second graders had similar responses — describing the shopping scene but not discussing prices. Third and fourth graders provided more detailed dialogs of the shopping scene and used price as a reason to purchase, but did not compare prices or use sales promotions as a rationale for purchase. Fifth graders made explicit references to price and discussed sales promotions in their reason for purchase. The primary objective of this research was to determine whether advanced levels of mathematical instruction and knowledge have an effect on how children respond to sales promotions. Consequently, we decided on second graders (7 and 8 years old) as the younger group because 1) second graders had an easier time writing their responses than first graders, and 2)
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they were more comfortable with addition and subtraction mathematical operations. Similarly, fifth grade students (10 and 11 years old) were selected as the older sample because they were the oldest group in the elementary school, but more importantly because they had recently learned percentages in class. Due to the prevalence of percentage-off sales promotions in the marketplace, we wanted to consider a group where this mathematical operation was highly salient and a comparison group without this knowledge. Using samples of second and fifth grade students, we next present two pretests to confirm that children recognized different types of sales promotions, followed by two studies to test our hypotheses. Pretests We conducted two pretests to explore children's conceptualizations of different types of sales cues. Retailers employ a variety of means of communicating sales to consumers, including phrases, dollar-off statements, and percent-off statements. These messages can be broadly categorized as semantic and numeric. Semantic cues are purely verbal and convey little to no information about the actual amount of the discount, and include words and phrases such as “sale,” “clearance,” etc. Numeric cues contain information about the size of the discount, and typically take the form of dollar-off claims (e.g. “$5.00 off”) or percent-off claims (e.g. “25% off”). Thus, our primary objective was to test our hypothesis that by the time a child reaches grade school, she/he understands the concept that a sale reduces a regular price, and that children are able to recognize both semantic and numeric sales cues. All of the pretests were conducted at a public elementary school in the Northeast among members of second and fifth grade classes. All children had parental permission to participate and gave their own verbal assent.
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two different stores. The description indicated that the regular price is $18.00 at both stores, but that both stores are having a sale. One store had a sign indicating $2.00 off while the other sign indicated $3.00 off the regular price. (The order that the sales were presented was randomized and counterbalanced). Similar to the prior study, participants were asked to indicate 1) which store was selling the ball for the lowest price, 2) which store their parents would rather buy the ball from, and 3) the new price of the sale item. The results indicated that both groups recognized sale terminology as predicted, with accuracy levels that were higher than would be predicted by guessing (second grade = 80%, z = 2.50, p b 0.01; fifth grade = 93%, z = 3.25, p b 0.05). Upon completion of this task, participants were shown another two-picture series depicting the same swing set being sold at two different stores. The description indicated that both stores sell the swing set for a regular price of $200 but that both stores were having a sale. The sale price of one store was 10% off while the other store was 25% off. Participants were asked to answer the same three questions as in the dollar-off condition. Results indicated that both groups recognized sale terminology as predicted, with accuracy levels that were higher than would be predicted by guessing (second grade = 74%, z = 1.97, p b 0.05; fifth grade = 93%, z = 3.25, p b 0.05). While all children that recognized sales cues were able to conceptually determine the better deal, the younger children were only able to compute the sale price in the dollar-off condition and not in the percentage-off condition, as expected.1 The results of both pretests indicated that children, as young as second grade, recognize both semantic and numeric sale cues as price reductions. Study 1: Mock store
Pretest 1: “Semantic cues.” Sixty-three (35 second and 28 fifth grade) students were shown two pictures with the same scooter being sold at two different stores. The only difference between the two pictures was that one picture included a sign featuring one of three semantic sale cues: sale, clearance, or save. Participants were randomly assigned to one of the three semantic cue conditions. There were two dependent measures: children were asked to indicate at which store the scooter costs less, and at which store their parents would want to buy it. To analyze the results of study 1, we coded responses to the question, “At which store does the scooter cost less?” as either correct or incorrect. The results indicated that both groups recognized sale terminology as predicted, with accuracy levels that were higher than would be predicted by guessing (first grade = 80%, z = 2.50, p b 0.01; fifth grade = 86%, z = 2.58, p b 0.01). As expected, children as early as second grade recognized common semantic promotional cues of sale as reductions in price. All children that recognized sales cues were able to determine the better deal.
Method Study 1 was designed to explore the impact that sales promotions have on children's purchase behavior. Thus, study 1 was a main effect study with four conditions, one condition with each of three items on sale and a control condition with no sale item. Ninety-two (48 second and 44 fifth grade) students from a Northeast elementary school participated in a shopping task. Each participant was given 50 cents and had the opportunity to buy one of three available items: a magnet, pen, or key chain. The items were approximately the same size and were similar in retail value. Prior to the start of the study, participants were randomly assigned to one of four conditions (three of the conditions having one of the items as the sale item and the other two listed at the regular price, and the fourth condition where all of the items were regular price). Each participant was taken individually into a room where the items were arranged on a table, each displaying a price tag of “40 cents” and the designated sale item also possessing at 10% off sale sign. Participants were told they could purchase an item with their money and keep any change, or they could choose to keep the 50 cents (none of the participants chose to keep all of the money). After the child examined the items, the experimenter asked the
Pretest 2: “Numeric cues.” Sixty-three students (35 second and 28 fifth grade) were shown a two-picture series depicting the same soccer ball being sold at
1 In the dollar-off condition 73% of second graders and 93% of fifth graders computed the correct sale price; however, in the percentage-off condition 0% of second graders and 73% of fifth graders computed the correct sale price.
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participant which product they would like to purchase. In addition, the subject was asked to compute the price of the item selected and give their rationale for selecting the chosen item. The experimenter then “sold” participants their selected item, gave them correct change, and asked the child to put their item in a place where no one else could see the purchase (in order to not influence the decisions of remaining participants). Finally, the experimenter asked the child to explain why they chose the item they did, and noted the response. Findings and discussion Table 1 shows choice shares for each of the three items across the four experimental conditions, separated by grade. For each grade there is a strong association between the item on sale and the chosen item (second grade χ2(6) = 103.2, p b 0.001; fifth grade χ2(6) = 91.4, p b 0.001). The control group in both grades preferred the pen (65% of second graders and 73% of fifth graders), however, when each item was placed on sale, its choice share increased dramatically. Specifically, when the pen was placed on sale, it was selected by a majority of both grades (second grade = 96%, fifth grade = 100%). Likewise, when the magnet was on sale 91% of second graders and 82% of fifth graders selected it; when the keychain was on sale it was selected by 74% of second graders and 68% of fifth graders. These results support hypothesis 1. We also analyzed these data by means of a multinomial logit model, which allows us to examine the effects of experimental condition and age group simultaneously. The model that includes the independent variables is significant (χ2(8) = 191.6, p b 0.001). Here, the likelihood ratio tests indicate that while experimental condition is significantly associated with choice, age is not. This result is consistent with our earlier analysis. In addition, when asked to provide their rationale for their purchase, 100% of participants that selected the sale item indicated that it was selected because it was on sale. Study 2: Competing promotions Study 2 was designed to test our final hypothesis, that children would select a sale framed as a quantity discount rather than a percentage discount due to the ease of processing the outcome of the sale. After interacting with children who participated in study 1, our expectations were reinforced, since the quantity discount Table 1 Study 1: Choice share of each item, by sale condition and grade level. Choice
Second grade
Fifth grade
Control Keychain on sale Magnet on sale Pen on sale Control Keychain on sale Magnet on sale Pen on sale
Keychain
Magnet
Pen
0.13 0.74 0.00 0.04 0.09 0.68 0.04 0.00
0.22 0.00 0.91 0.00 0.18 0.00 0.82 0.00
0.65 0.26 0.09 0.96 0.73 0.32 0.14 1.00
was consistent with many children's desires to maximize the number of items they receive from the transaction. To explore these ideas, we created another real shopping situation with two competing promotions, where the percent-off deal dominates (specifically BOGO vs. 60% off). Method Forty-three (23 second and 20 fifth grade) children were asked to choose between baskets of two different types of pencils, each marked with a regular price of 40 cents and with one of two types of sales promotions: “Buy one, get one free” or “60% off”. Because the pencil types featured different colors and logos, we alternated the basket of pencils on sale, to control for the possibility that one type of pencil was more strongly preferred. Children were given 50 cents and were brought into a room where the pencils were displayed, allowed to examine the display for as long as they liked, and then asked which pencil(s) they would like to buy. Participants were told that they could buy as many pencils as they could afford and/or wanted to purchase, and that they could keep any remaining change (they also had the option not to purchase and keep their 50 cents, although none of the participants chose to do so). The experimenter then asked how much change they should have left, and asked participants to explain why they made their choices. After this interaction, the experimenter explained the outcome of both sales to the child: 1) the BOGO promotion gives you two pencils and $0.10 left over; and 2) the 60% off sale means that each pencil costs $0.16, showing that $0.34 was left over (thus, three pencils could actually be purchased with two cents remaining however participants were not explicitly told so). Once this explanation took place, the experimenter asked the participant if they would like to change their decision, and to explain why or why not. For those participants who decided to purchase the 60% promotion, the administrator only charged them $0.15 per pencil because we did not have pennies available (leaving children with $0.35 remaining after the purchase of one pencil). This additional price reduction occurred after the child made the decision to purchase this promotion and were given the opportunity to change their decision, and children were informed that the reason they were given the pencil for $0.15 instead of $0.16 was because the administrator did not have any pennies. Findings and discussion Participants strongly preferred the BOGO promotion (n = 35) to the “60% off” promotion (n = 8), as predicted by hypothesis 2 (z = 5.61, p b 0.001). Additionally, we found no significant effect of grade level or preference for a particular pencil on the pattern of results. Moreover, children's open-ended responses suggested that the BOGO is preferred because it is unambiguous and results in increased quantity. Most of the responses are variations on those themes. For example, “with this one, I can get two pencils,” or “I'll have two pencils and some money left over” were typical. Among the children who selected the 60% off sale, these themes were also evident (for example, “I want two, but I really like this pencil so I'll pick this one”). It should also be noted that none of the children who chose the 60% off promotion were able to calculate the correct change due.
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While these results were in line with expectations, we were more surprised by what followed. Recall that after participants had made their initial selections and bought them, the experimenter calculated the 60% off sale price for each child, and gave them the option to switch. Even so, not one of the children switched from BOGO to 60% off. Children appeared to be unable to apply their math knowledge (in this case using addition or subtraction since the discount price was provided) to arrive at the conclusion that they could actually get three pencils with the 60% off promotion. [One child, however, did ask for help with the computation of 60% off prior to making the decision and was able to conclude that 60% off was actually the better deal and selected that option.] Furthermore, after the study was complete, the experimenter debriefed participants and asked them to compute the cost to buy two pencils with the 60% off sale. When prompted to consider this, participants recognized that 60% off was the better sale, with several children responding along the lines of “I never thought about it that way.” The older children more readily arrived at these results and needed less prompting by the experimenter.2 The results demonstrate how children do not readily reframe the sales promotions so that they are comparable, either by restating both sales either in terms of quantity or percent-off promotions, and instead appear to choose options about whose outcomes they are more certain. General discussion The aim of this paper was to provide an initial exploration of children's response to sales and add to the literature devoted to children's shopping skills and transaction knowledge. In this research, we demonstrate that even at a young age, children have acquired the concept that a sale reduces regular prices. We show that presence of a sale influences children's purchase decisions (study 1) and that children have difficulty applying mathematical concepts they have mastered in the classroom to sales promotions (study 2). Ultimately, our results demonstrate that the manner in which a sale is framed affects the interpretation of the sales promotion. These studies have important implications for parents and educators. While many parents and teachers no doubt view consumer education as a desirable learning outcome, school curricula continue to focus on operations and do not consistently include or stress the application of these operations or the development of consumer skills, despite the fact that marketplace situations are likely to be a commonly used application of mathematical concepts. Our results provide insights into deficiencies that many children have concerning important real-life phenomena such as sales. These findings are consistent with previous research that has demonstrated that children have difficulty in transferring mathematical knowledge from one domain into another novel domain (Carraher et al., 1985; Flavell et al., 2002; Saxe, 1991, 1999; Nunes et al., 1993). Thus, we 2
Please note that we also ran study 2 using a sample of 80 undergraduate marketing students from a major U.S. university. All college-aged subjects selected the 60% off promotion and, as expected, were able to compute the sale price.
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believe that consumer skills such as shopping should be an important and integrated part of mathematics pedagogy in elementary schools. Furthermore, because children today make more of their own purchases than they have in the past, it is important that children are exposed to the various terms that convey temporary price reductions. Parents should watch for opportunities to point out usage of different terms in shopping contexts so that elementary-aged children's conceptual knowledge of sales can be enhanced. Overall, our research demonstrates that promotions can be framed in ways that direct elementary-aged children's attention to particular outcomes, even when a competing outcome is superior. Additionally, our work indicates that these children have difficulty in comparing outcomes of competing promotional situations, especially when one promotion requires more complex mathematical computations. Ultimately, these findings can provide direction in protecting children from potentially confusing or misleading marketing practices, and in building better foundations for children's consumer education. While our work represents an initial look at children's thinking about sales, our study has limitations. While we found that children had difficulty in applying their mathematics knowledge to a percentage off promotion in study 2, the possibility remains that this task was exceptionally difficult compared to other types of sales promotions. Future research could provide insights into how children respond to a broader variety of sales promotions (e.g., two for one or 50% off versus BOGO). It is also possible that the fifth graders in study 2 might have performed better if they had been prompted to apply their recently learned mathematical operations to the task at hand. Additional research could also include older age groups (e.g., eighth grade) in order to examine the age at which children begin to apply their mathematics knowledge to marketplace contexts. Other questions that remain unanswered include how likely children might be to delay purchase to take advantage of a sale, how much of an inducement a sale provides in a category that was not already being considered, how sales affect children's perceptions of product quality and value, and whether children consider additional costs to purchase such as sales tax. Additionally, future research should consider how sensitive children are to “sale” signs when faced with the vast number of products in a store and look further into how children comprehend other forms of competing promotions, including those that are easier to process than percentages. Consequently, a better understanding of how children learn about and apply knowledge to sales and these future research opportunities can provide insights into how to teach children to become more effective consumers.
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Research Report
Children's response to sales promotions and their impact on purchase behavior☆ Wendy Attaya Boland a,⁎, Paul M. Connell b , Lance-Michael Erickson c a
Kogod School of Business, American University, 4400 Massachusetts Ave, NW, Washington, DC 20016, USA b Stony Brook University, Stony Brook, NY 11794, USA c Berkeley College, 3 East 43 St., New York, NY 10017, USA Received 4 August 2010; received in revised form 26 March 2011; accepted 12 April 2011 Available online 23 May 2011
Abstract Despite the growth in children's purchasing power, surprisingly little is known about how children respond to sales promotions. We conduct two experiments to address this issue. Study 1 shows that elementary-aged (second and fifth grade) children's purchase decisions are influenced by the presence of sales. Study 2 demonstrates that both age groups favor conceptually easier promotions, even when the sale is inferior. Additionally, we find that children have difficulty applying mathematical concepts to sales promotions, regardless of classroom mastery of the associated operations. Together, these results indicate that elementary-aged children routinely incorporate sales into purchase decisions, sometimes with suboptimal results. © 2011 Society for Consumer Psychology. Published by Elsevier Inc. All rights reserved. Keywords: Children; Sales promotions; Purchase decisions; Mathematical knowledge
Anyone who has had children accompany them on a shopping trip has probably heard a child use some variation on the phrase, “But it's on sale!” in an attempt to secure the purchase of a desired object. Because sales have potential to influence children's shopping behavior, the study of children's responses to sales promotions has important theoretical and practical contributions to our overall understanding of children's shopping skills. Additionally, a better understanding of children's shopping behavior is essential if we are to learn how best to socialize children as consumers and ultimately to build foundations for effective consumption strategies when they become adults.
☆ The authors wish to thank Mrs. Ann Chen and Mrs. Jeanne Boland for access to their classes and for their help during the study and Merrie Brucks for her comments on the manuscript. ⁎ Corresponding author. E-mail addresses: [email protected] (W.A. Boland), [email protected] (P.M. Connell), [email protected] (L. Erickson).
Children have more buying power than ever, and are participating in family decision making to a greater extent than they have in the past. Children under 12 years old constitute a powerful market segment in their own right, and are influential in their families' purchase decisions (Darley & Lim, 1986; Foxman, Tansuhaj, & Ekstrom, 1989; McNeal, 1992; Nelson, 1979). According to one estimate, children under age 14 influenced as much as 47% of American household spending in 2005, including $40 billion of their own money (The Economist, 2006). Due to the increasing presence of children in the marketplace, marketers have developed a vast number of strategies to reach young consumers (Kline, 1995). Consequently, this has led to more research in the development of children's consumer skills, with the goal of identifying the specific skills necessary to become effective consumers. Due to the increased role children play in the consumption arena, researchers have amassed an impressive amount of knowledge related to the consumer socialization of children (see John, 1999 or 2008 for a complete review), especially in the areas of advertising knowledge (e.g., Robertson & Rossiter,
1057-7408/$ - see front matter © 2011 Society for Consumer Psychology. Published by Elsevier Inc. All rights reserved. doi:10.1016/j.jcps.2011.04.003
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1974), understanding of the shopping process (Peracchio, 1992; John & Whitney, 1986), the effects of marketing stimuli on recall (Ellis, Holmes & Wright, 2010; Hang & Auty, 2011), and children's influence strategies (Belch, Belch, & Ceresino, 1985; McNeal, 1992; Rust, 1993; Ward & Wackman, 1972). However, there are still gaps in knowledge of how children acquire critical consumer skills, particularly in the area of shopping skills (e.g., price knowledge, value judgments, and sales promotions). There has been very little research on children's reactions to sales promotions. Yet, as participants in the marketplace, children are exposed to sales promotional messages. During a shopping trip, children routinely navigate the retail environments where signs, labels, and displays call out for consumer attention: “on sale,” “clearance,” and “20% off.” These visual promotions stimulate consumers to buy and have a significant impact on brand choice (Bawa & Shoemaker, 1987; Krishnamurthi & Raj, 1991; Guadagni & Little, 1983, 1998; Gupta, 1988; Lattin & Bucklin, 1989; Luna & Kim, 2009). Research suggests that children are likely to be especially vulnerable to such tactics. A wealth of child development literature demonstrates that children under age 12 are drawn to visually salient stimuli rather than conceptual themes (Calvert, Huston, Watkins, & Wright, 1982; Flavell, Miller, & Miller, 2002; John & Sujan, 1990; Lorch, Anderson, & Levin, 1979), and are drawn to immediate cues rather than strategic thinking (Collins, Wellman, Keniston, & Westby, 1978; Mischel & Ebbesen, 1970), which suggests that sale cues may exert particular influence on children's purchase decisions. Due to children's increased buying power and the pervasiveness of sales promotions as a marketing tactic, we focus on this neglected area of research (i.e., how children respond to sales promotions). We begin the paper by defining the concept “sale” and reviewing literature that describes the effects of sales promotions on a purchase decision. Following this, we discuss literature on children's understanding of the shopping process and how they gain shopping knowledge and understanding. Next, we present a pilot study followed by two pretests aimed to confirm that elementary-aged children have a basic understanding of sales promotions. Once we establish these children's understandings of sales promotions, we present two focal studies that test how elementary-aged children (specifically 2nd and 5th graders) evaluate and respond to in-store sales promotions and how these promotions impact their purchases. We conclude with a discussion of our findings and ideas for future research. Conceptual background Consumer understanding of sales promotions In-store sales promotions take a number of forms (e.g., bundles, Buy One Get One sales (BOGOs), etc.), each offering a temporary price reduction. Retailers use these types of sales for a number of reasons, including stimulating purchases, clearing inventory, passing on manufacturer incentives, and driving store traffic (Blattberg & Neslin, 1990). Sales have varied effects on consumers: 1) sales can induce trial (Scott 1976), brand switching (Sun, Neslin, & Srinivasan, 2003), and stockpiling (Bell, Iyer, &
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Padmanabhan, 2002); 2) sales have been shown to induce affect (Honea & Dahl, 2005); and 3) framing of promotions and the difference between the regular price and sale price can influence perceptions of deal value and product quality (Coulter & Norberg, 2009; Darke & Chung, 2005). Moreover, the main purpose of a sales promotion is to create urgency in the shopper's mind, thus persuading them to purchase (Inman & McAlister, 1994; Neslin, Henderson, & Quelch, 1985). Thus, whatever their purpose or form, sales result in a perceived change to the regular price of a product. While these studies provide a good understanding of how adults respond to sales promotions, no previous research provides insight on how elementary-aged children respond to similar attempts. Children's acquisition of marketplace knowledge To understand how children learn and process sales cues, we must first consider how elementary-aged children (ages 5–12) acquire knowledge and specifically how they learn terminology. Children learn their first words by associating them with objects that are present when the word is said, for example, mommy or dog (Bloom, 2001a). A key point in understanding children's knowledge acquisition is that children of all ages acquire an understanding of new terms by linking sound and word meanings through experience (Bloom, 2001b). Because younger children have more difficulty storing event sequences in their memory, they rely even more on everyday experiences to enhance their understanding of new concepts (Paris & Lindauer, 1983). There is evidence of this in the consumer behavior literature, where younger children have been shown to have more difficulty explaining shopping-related concepts outside of the shopping context (Peracchio, 1992), and demonstrate poorer comprehension of the sequence of events in a typical shopping trip (John & Whitney, 1986). This suggests that children require a minimum level of marketplace knowledge before they can understand terms related to shopping. Just as children incrementally learn terminology as they age, they also develop mathematical knowledge and skills. Therefore, we need to consider how children develop conceptual and numerical fluency. At age two or three, children start to assign verbal labels to amounts and sizes (a lot, a little, etc.). Counting strategies emerge relatively quickly after this point. By age three or four, correspondence between number words and their quantities is accurate (Gallistel & Gelman, 1992; Geary, 1994). Once this is mastered, counting efficiency is notably increased, and children can begin to manipulate numbers without requiring that countable objects be physically present (Fuson, 1988). These basic mathematical abilities appear to occur spontaneously in children regardless of whether they are formally taught to them or not (Flavell et al., 2002; Gelman, 1990, 1991; Gelman & Meck, 1983; Gelman & Williams, 1998; Wynn, 1998). While basic mathematical abilities such as counting appear to occur spontaneously, evidence suggests that higher order operations appear to be social phenomena that must be taught, with higher order operations following lower order operations (Flavell et al., 2002; Gauvain, 2001; Saxe, Guberman, & Gearhart, 1987). By age eight or nine, children in American
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school systems typically start to master multiplication (Geary, 1994). While children are taught these operations in school, previous research indicates that children perform better on tasks when they have domain-specific knowledge about the task (Carraher, Carraher, & Schliemann, 1985; Flavell et al., 2002; Saxe, 1991, 1999; Nunes, Carraher, & Schliemann, 1993). Flavell et al. (2002) argued that, in the case of problem-solving, experience trumps age and traditional stage theories are flawed in that they overestimate the performance of older children and underestimate the performance of younger children. Nevertheless, children have considerable difficulty learning skills that are applied from one context to another. For example, a number of studies demonstrate that a sample of child street vendors between 9 and 15 years old were able to perform a large number of complex and difficult mathematical computations quickly for the purposes of conducting transactions (Nunes et al., 1993; Saxe, 1991; 1999), even in the absence of formal education, but had difficulty applying their knowledge to other contexts and performed poorly on abstract operations tests (Carraher et al., 1985; Saxe, 1999). In this case, these child street vendors possess a great deal of marketplace knowledge but have not mastered operational knowledge. We believe that we will observe a similar pattern of behavior in American schoolchildren, who may have knowledge of operations but limited experience with actual marketplace transactions. This line of reasoning is consistent with findings that children have difficulty in applying shopping concepts in absence of their context (John & Whitney, 1986; Peracchio, 1992) and arguments that elementary mathematics pedagogy is at odds with the necessity for operations to be applied to particular contexts in order for children to be able to use them in everyday life (e.g., Cobb, Yackel, & Wood, 1992; Sfraza 2008). Thus, children in elementary school should be able to determine the result of a sale framed in dollar-off terms (e.g. “save $5.00”) since it requires a single subtraction operation and is more easily applied. Conversely, elementary-aged children should have trouble with sales framed in percent-off terms (e.g. “20% off”) because they require multiple operations that have not yet been learned in younger children (e.g., second grade) and have been recently learned, but not applied to marketplace contexts, in older children (e.g., fifth grade). Of course, errors in computation are not the only difficulty that children may face in interpreting numeric sale cues. Children must first understand the concept that the sale reduces the regular price, and they must understand how the information conveyed in the cue can help them determine the new (sale) price. Research suggests that by age eight or nine, children understand that products have prices, know where to look for price information, and know that prices may vary by store (McNeal & McDaniel, 1981). However, children often do not include prices when asked to draw pictures about shopping (McNeal, 1992) and do not ask about prices when searching for information that is relevant to a purchase decision (Ward, Wackman, & Wartella, 1977). A number of potential explanations exist for children's relative lack of attention to price information. For one, young children tend to be perceptually bound, focusing on salient perceptual features of products (e.g., size, color) and ignoring underlying features (e.g., performance, quality) (John & Sujan, 1990).
Because price is often a product attribute not as readily apparent as size, color, or even brand name, it may be a feature that children routinely overlook. Another consideration is that children are often in shopping situations where they are not expected to pay for items themselves. Younger children get fewer opportunities for independent shopping compared to older children (Rose, 1999), and they also have less income under their direct control (McNeal, 1998). When the child is not responsible for payment, price may not be a focal attribute in their choice process. However, when price information is augmented by a sale cue, the perceptual salience of price is increased. Thus, a sale may work to direct children's attention to a product attribute—price—they might otherwise not have noticed or considered. Therefore, we expect that elementary-aged children will incorporate the presence of a sale into their own purchase decisions, making them more likely to select a sale item over a non-sale item. More formally: H1. The presence of a sale will increase the likelihood that both younger (second grade) and older (fifth grade) children select an item for purchase. While we expect that most elementary-aged children believe they will be better off by choosing a sale, their inability to assess the outcome of a sale leaves them vulnerable to poor decisions in situations where either 1) the “sale” does not represent a better deal than the regular price; or 2) competing sales on the same item result in different outcomes. When faced with competing promotions, we expect both younger (second grade) and older (fifth grade) children to choose the conceptually easier promotion, even if it represents a suboptimal outcome. The limited ability to apply operations regardless of their level of mastery of the operation is expected to drive this effect. H2. Both younger (second grade) and older (fifth grade) children will favor promotions framed as quantity discounts (e.g., “buy one, get one free”) rather than percentage discounts (e.g., “50% off”), regardless of which option represents the best deal. Method We began our analysis by running a pilot study to determine the two grade levels used in our data sample. Here, we showed children of each grade (first through fifth) a three-picture series of a mother and children shopping. Children were asked to write a story describing the picture series. First and second graders had similar responses — describing the shopping scene but not discussing prices. Third and fourth graders provided more detailed dialogs of the shopping scene and used price as a reason to purchase, but did not compare prices or use sales promotions as a rationale for purchase. Fifth graders made explicit references to price and discussed sales promotions in their reason for purchase. The primary objective of this research was to determine whether advanced levels of mathematical instruction and knowledge have an effect on how children respond to sales promotions. Consequently, we decided on second graders (7 and 8 years old) as the younger group because 1) second graders had an easier time writing their responses than first graders, and 2)
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they were more comfortable with addition and subtraction mathematical operations. Similarly, fifth grade students (10 and 11 years old) were selected as the older sample because they were the oldest group in the elementary school, but more importantly because they had recently learned percentages in class. Due to the prevalence of percentage-off sales promotions in the marketplace, we wanted to consider a group where this mathematical operation was highly salient and a comparison group without this knowledge. Using samples of second and fifth grade students, we next present two pretests to confirm that children recognized different types of sales promotions, followed by two studies to test our hypotheses. Pretests We conducted two pretests to explore children's conceptualizations of different types of sales cues. Retailers employ a variety of means of communicating sales to consumers, including phrases, dollar-off statements, and percent-off statements. These messages can be broadly categorized as semantic and numeric. Semantic cues are purely verbal and convey little to no information about the actual amount of the discount, and include words and phrases such as “sale,” “clearance,” etc. Numeric cues contain information about the size of the discount, and typically take the form of dollar-off claims (e.g. “$5.00 off”) or percent-off claims (e.g. “25% off”). Thus, our primary objective was to test our hypothesis that by the time a child reaches grade school, she/he understands the concept that a sale reduces a regular price, and that children are able to recognize both semantic and numeric sales cues. All of the pretests were conducted at a public elementary school in the Northeast among members of second and fifth grade classes. All children had parental permission to participate and gave their own verbal assent.
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two different stores. The description indicated that the regular price is $18.00 at both stores, but that both stores are having a sale. One store had a sign indicating $2.00 off while the other sign indicated $3.00 off the regular price. (The order that the sales were presented was randomized and counterbalanced). Similar to the prior study, participants were asked to indicate 1) which store was selling the ball for the lowest price, 2) which store their parents would rather buy the ball from, and 3) the new price of the sale item. The results indicated that both groups recognized sale terminology as predicted, with accuracy levels that were higher than would be predicted by guessing (second grade = 80%, z = 2.50, p b 0.01; fifth grade = 93%, z = 3.25, p b 0.05). Upon completion of this task, participants were shown another two-picture series depicting the same swing set being sold at two different stores. The description indicated that both stores sell the swing set for a regular price of $200 but that both stores were having a sale. The sale price of one store was 10% off while the other store was 25% off. Participants were asked to answer the same three questions as in the dollar-off condition. Results indicated that both groups recognized sale terminology as predicted, with accuracy levels that were higher than would be predicted by guessing (second grade = 74%, z = 1.97, p b 0.05; fifth grade = 93%, z = 3.25, p b 0.05). While all children that recognized sales cues were able to conceptually determine the better deal, the younger children were only able to compute the sale price in the dollar-off condition and not in the percentage-off condition, as expected.1 The results of both pretests indicated that children, as young as second grade, recognize both semantic and numeric sale cues as price reductions. Study 1: Mock store
Pretest 1: “Semantic cues.” Sixty-three (35 second and 28 fifth grade) students were shown two pictures with the same scooter being sold at two different stores. The only difference between the two pictures was that one picture included a sign featuring one of three semantic sale cues: sale, clearance, or save. Participants were randomly assigned to one of the three semantic cue conditions. There were two dependent measures: children were asked to indicate at which store the scooter costs less, and at which store their parents would want to buy it. To analyze the results of study 1, we coded responses to the question, “At which store does the scooter cost less?” as either correct or incorrect. The results indicated that both groups recognized sale terminology as predicted, with accuracy levels that were higher than would be predicted by guessing (first grade = 80%, z = 2.50, p b 0.01; fifth grade = 86%, z = 2.58, p b 0.01). As expected, children as early as second grade recognized common semantic promotional cues of sale as reductions in price. All children that recognized sales cues were able to determine the better deal.
Method Study 1 was designed to explore the impact that sales promotions have on children's purchase behavior. Thus, study 1 was a main effect study with four conditions, one condition with each of three items on sale and a control condition with no sale item. Ninety-two (48 second and 44 fifth grade) students from a Northeast elementary school participated in a shopping task. Each participant was given 50 cents and had the opportunity to buy one of three available items: a magnet, pen, or key chain. The items were approximately the same size and were similar in retail value. Prior to the start of the study, participants were randomly assigned to one of four conditions (three of the conditions having one of the items as the sale item and the other two listed at the regular price, and the fourth condition where all of the items were regular price). Each participant was taken individually into a room where the items were arranged on a table, each displaying a price tag of “40 cents” and the designated sale item also possessing at 10% off sale sign. Participants were told they could purchase an item with their money and keep any change, or they could choose to keep the 50 cents (none of the participants chose to keep all of the money). After the child examined the items, the experimenter asked the
Pretest 2: “Numeric cues.” Sixty-three students (35 second and 28 fifth grade) were shown a two-picture series depicting the same soccer ball being sold at
1 In the dollar-off condition 73% of second graders and 93% of fifth graders computed the correct sale price; however, in the percentage-off condition 0% of second graders and 73% of fifth graders computed the correct sale price.
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participant which product they would like to purchase. In addition, the subject was asked to compute the price of the item selected and give their rationale for selecting the chosen item. The experimenter then “sold” participants their selected item, gave them correct change, and asked the child to put their item in a place where no one else could see the purchase (in order to not influence the decisions of remaining participants). Finally, the experimenter asked the child to explain why they chose the item they did, and noted the response. Findings and discussion Table 1 shows choice shares for each of the three items across the four experimental conditions, separated by grade. For each grade there is a strong association between the item on sale and the chosen item (second grade χ2(6) = 103.2, p b 0.001; fifth grade χ2(6) = 91.4, p b 0.001). The control group in both grades preferred the pen (65% of second graders and 73% of fifth graders), however, when each item was placed on sale, its choice share increased dramatically. Specifically, when the pen was placed on sale, it was selected by a majority of both grades (second grade = 96%, fifth grade = 100%). Likewise, when the magnet was on sale 91% of second graders and 82% of fifth graders selected it; when the keychain was on sale it was selected by 74% of second graders and 68% of fifth graders. These results support hypothesis 1. We also analyzed these data by means of a multinomial logit model, which allows us to examine the effects of experimental condition and age group simultaneously. The model that includes the independent variables is significant (χ2(8) = 191.6, p b 0.001). Here, the likelihood ratio tests indicate that while experimental condition is significantly associated with choice, age is not. This result is consistent with our earlier analysis. In addition, when asked to provide their rationale for their purchase, 100% of participants that selected the sale item indicated that it was selected because it was on sale. Study 2: Competing promotions Study 2 was designed to test our final hypothesis, that children would select a sale framed as a quantity discount rather than a percentage discount due to the ease of processing the outcome of the sale. After interacting with children who participated in study 1, our expectations were reinforced, since the quantity discount Table 1 Study 1: Choice share of each item, by sale condition and grade level. Choice
Second grade
Fifth grade
Control Keychain on sale Magnet on sale Pen on sale Control Keychain on sale Magnet on sale Pen on sale
Keychain
Magnet
Pen
0.13 0.74 0.00 0.04 0.09 0.68 0.04 0.00
0.22 0.00 0.91 0.00 0.18 0.00 0.82 0.00
0.65 0.26 0.09 0.96 0.73 0.32 0.14 1.00
was consistent with many children's desires to maximize the number of items they receive from the transaction. To explore these ideas, we created another real shopping situation with two competing promotions, where the percent-off deal dominates (specifically BOGO vs. 60% off). Method Forty-three (23 second and 20 fifth grade) children were asked to choose between baskets of two different types of pencils, each marked with a regular price of 40 cents and with one of two types of sales promotions: “Buy one, get one free” or “60% off”. Because the pencil types featured different colors and logos, we alternated the basket of pencils on sale, to control for the possibility that one type of pencil was more strongly preferred. Children were given 50 cents and were brought into a room where the pencils were displayed, allowed to examine the display for as long as they liked, and then asked which pencil(s) they would like to buy. Participants were told that they could buy as many pencils as they could afford and/or wanted to purchase, and that they could keep any remaining change (they also had the option not to purchase and keep their 50 cents, although none of the participants chose to do so). The experimenter then asked how much change they should have left, and asked participants to explain why they made their choices. After this interaction, the experimenter explained the outcome of both sales to the child: 1) the BOGO promotion gives you two pencils and $0.10 left over; and 2) the 60% off sale means that each pencil costs $0.16, showing that $0.34 was left over (thus, three pencils could actually be purchased with two cents remaining however participants were not explicitly told so). Once this explanation took place, the experimenter asked the participant if they would like to change their decision, and to explain why or why not. For those participants who decided to purchase the 60% promotion, the administrator only charged them $0.15 per pencil because we did not have pennies available (leaving children with $0.35 remaining after the purchase of one pencil). This additional price reduction occurred after the child made the decision to purchase this promotion and were given the opportunity to change their decision, and children were informed that the reason they were given the pencil for $0.15 instead of $0.16 was because the administrator did not have any pennies. Findings and discussion Participants strongly preferred the BOGO promotion (n = 35) to the “60% off” promotion (n = 8), as predicted by hypothesis 2 (z = 5.61, p b 0.001). Additionally, we found no significant effect of grade level or preference for a particular pencil on the pattern of results. Moreover, children's open-ended responses suggested that the BOGO is preferred because it is unambiguous and results in increased quantity. Most of the responses are variations on those themes. For example, “with this one, I can get two pencils,” or “I'll have two pencils and some money left over” were typical. Among the children who selected the 60% off sale, these themes were also evident (for example, “I want two, but I really like this pencil so I'll pick this one”). It should also be noted that none of the children who chose the 60% off promotion were able to calculate the correct change due.
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While these results were in line with expectations, we were more surprised by what followed. Recall that after participants had made their initial selections and bought them, the experimenter calculated the 60% off sale price for each child, and gave them the option to switch. Even so, not one of the children switched from BOGO to 60% off. Children appeared to be unable to apply their math knowledge (in this case using addition or subtraction since the discount price was provided) to arrive at the conclusion that they could actually get three pencils with the 60% off promotion. [One child, however, did ask for help with the computation of 60% off prior to making the decision and was able to conclude that 60% off was actually the better deal and selected that option.] Furthermore, after the study was complete, the experimenter debriefed participants and asked them to compute the cost to buy two pencils with the 60% off sale. When prompted to consider this, participants recognized that 60% off was the better sale, with several children responding along the lines of “I never thought about it that way.” The older children more readily arrived at these results and needed less prompting by the experimenter.2 The results demonstrate how children do not readily reframe the sales promotions so that they are comparable, either by restating both sales either in terms of quantity or percent-off promotions, and instead appear to choose options about whose outcomes they are more certain. General discussion The aim of this paper was to provide an initial exploration of children's response to sales and add to the literature devoted to children's shopping skills and transaction knowledge. In this research, we demonstrate that even at a young age, children have acquired the concept that a sale reduces regular prices. We show that presence of a sale influences children's purchase decisions (study 1) and that children have difficulty applying mathematical concepts they have mastered in the classroom to sales promotions (study 2). Ultimately, our results demonstrate that the manner in which a sale is framed affects the interpretation of the sales promotion. These studies have important implications for parents and educators. While many parents and teachers no doubt view consumer education as a desirable learning outcome, school curricula continue to focus on operations and do not consistently include or stress the application of these operations or the development of consumer skills, despite the fact that marketplace situations are likely to be a commonly used application of mathematical concepts. Our results provide insights into deficiencies that many children have concerning important real-life phenomena such as sales. These findings are consistent with previous research that has demonstrated that children have difficulty in transferring mathematical knowledge from one domain into another novel domain (Carraher et al., 1985; Flavell et al., 2002; Saxe, 1991, 1999; Nunes et al., 1993). Thus, we 2
Please note that we also ran study 2 using a sample of 80 undergraduate marketing students from a major U.S. university. All college-aged subjects selected the 60% off promotion and, as expected, were able to compute the sale price.
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believe that consumer skills such as shopping should be an important and integrated part of mathematics pedagogy in elementary schools. Furthermore, because children today make more of their own purchases than they have in the past, it is important that children are exposed to the various terms that convey temporary price reductions. Parents should watch for opportunities to point out usage of different terms in shopping contexts so that elementary-aged children's conceptual knowledge of sales can be enhanced. Overall, our research demonstrates that promotions can be framed in ways that direct elementary-aged children's attention to particular outcomes, even when a competing outcome is superior. Additionally, our work indicates that these children have difficulty in comparing outcomes of competing promotional situations, especially when one promotion requires more complex mathematical computations. Ultimately, these findings can provide direction in protecting children from potentially confusing or misleading marketing practices, and in building better foundations for children's consumer education. While our work represents an initial look at children's thinking about sales, our study has limitations. While we found that children had difficulty in applying their mathematics knowledge to a percentage off promotion in study 2, the possibility remains that this task was exceptionally difficult compared to other types of sales promotions. Future research could provide insights into how children respond to a broader variety of sales promotions (e.g., two for one or 50% off versus BOGO). It is also possible that the fifth graders in study 2 might have performed better if they had been prompted to apply their recently learned mathematical operations to the task at hand. Additional research could also include older age groups (e.g., eighth grade) in order to examine the age at which children begin to apply their mathematics knowledge to marketplace contexts. Other questions that remain unanswered include how likely children might be to delay purchase to take advantage of a sale, how much of an inducement a sale provides in a category that was not already being considered, how sales affect children's perceptions of product quality and value, and whether children consider additional costs to purchase such as sales tax. Additionally, future research should consider how sensitive children are to “sale” signs when faced with the vast number of products in a store and look further into how children comprehend other forms of competing promotions, including those that are easier to process than percentages. Consequently, a better understanding of how children learn about and apply knowledge to sales and these future research opportunities can provide insights into how to teach children to become more effective consumers.
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