The Effects Of Price Discount, Brand Awareness And Original Price On Consumers’ Perception In Online Group Buying

In2008, Groupon, a new group buying model, launched in America and it hasgrown fast around the world. Fast and significant growth along with the Groupon’ssimple business concept has attracted numerous skilled copiers and thousands of clonesall over the world. Following the new Groupon model, a lot of clones of Groupon wereborn; many new group buying websites emerged in China.The new group buying model uses price discount as its strategy to attractconsumers and increase consumers’ purchase intention. However, the strategy may notbe effective since price discount would influence consumers’ perceived quality. It isimportant for firms to know about how price discount in group buying will influenceconsumers’ perceived quality and purchase intention although consumers can spend lessto buy. In addition, brand awareness can affect consumers’ perceived quality with aproduct they intend to buy. Besides, the original price of the product may moderate theimpacts of price discount on consumers’ perceived quality and purchase intention.For this research, an experimental design was employed to examine how pricediscount influences consumers’ perceived quality and purchase intention and whetherbrand awareness and original price level moderate such influences. A total of400undergraduate students, postgraduate students and young graduates participated in thestudy and400questionnaires were collected,326questionnaires were valid in the study.SPSS16.0was used to conduct scale reliability and validity analysis, independentsamples T-test, two-way ANOVA analysis and regression analysis for testing hypotheses.The results show that high price discount can lower consumers’ perceived qualityeven the brand was of high brand awareness. A brand with high brand awareness canstabilize consumers’ perceived quality to some extent. Furthermore, to the product with ahigh original price, consumers’ perceived quality can be significantly lower in thesituation of price discount. Original price level significantly moderates the influences ofprice discount on perceived quality.