Effect of Brand Image and Product Knowledge on Purchase Intention Moderated by Price Discount
Price discounting is a common tool used to provide short-term sales increase by giving consumers the incentive
of savings. Since consumers can directly experience a real bargain, the larger the price discount is, the more
chances there are to consume (Bell, Ho, and Tang, 1998). Price discounting, however, could signal negative
product quality sometimes, and consequently affects consumers’ product evaluation and purchase intention.
Since consumers are drawn to purchase a product by economic incentives instead of product quality, price
discounting can only create temporary brand name shift. Would price discounting interfere and lower
consumers’ evaluation and purchase intention toward a product? There have not been much conclusive study
results to be able to answer this question. Yet, most researchers seem to agree that price discounting has more
positive than negative impact on purchase intention. Della Bitta, Monroe and McGinnis (1981) proves that wellknown
brands help control and stabilize consumers’ perception of product quality, and more purchase intention
was increased, along with the higher discount rates. According to Raghubir and Corfman (1999), consumers
usually do not lower their opinion on certain product when it is on sale due to the consistency and distinctiveness
of promotions, meaning as long as the price discounting falls within the industry norm, consumers would not
question the legitimacy of it or start to question the quality of the product. In addition, Hung’s research (2001)
concludes that product evaluation can effective predict purchase intention–the higher the opinion consumers hold
towards a product, the more purchase intention there is.Consumers with higher product knowledge tend to rely
on product quality to make a purchase evaluation, and are less influenced by pricing or price discounting. Their
opinion are also less easily influenced by price discounting because they are considering the product itself, with
or without a price discount. Those with lower product knowledge usually have lower understanding and
confidence in product quality. Consequently, they will rely on pricing to make a purchase decision, which may
cause them to have a negative reaction toward price discounting.