Purpose – Marketers have been using discounts and freebies for sales promotion strategy for a long
time, yet a dilemma concerning better promotion remains. The paper tries to address this issue
through empirical research by classifying sales promotion based on their utility and relatedness to
the product to which they are bundled.
Design/methodology/approach – Two hypotheses were drawn: there is a distinctive preference of
sales promotional offering, when it is bundled with a product, and the preference of promotion varies
with the product category it is bundled with; discounts by retailers are preferred over advertised
discounts, but they negatively affect the credibility of the product The hypotheses were tested by a
double-staged experimental protocol. The first stage standardized the perceived price of the freebies,
and the second stage consisted of a 2 2 2 mixed model experiment. The first hypothesis was
tested with Friedman’s Test and Wilk’s , and the second hypothesis was subjected to t-test and
factor analysis on a four-item scale.