Award Date

12-15-2019

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Hospitality Management

First Committee Member

Sarah Tanford

Second Committee Member

Mehmet Erdem

Third Committee Member

Chih-Chien Chen

Fourth Committee Member

Anjala Krishen

Number of Pages

194

Abstract

To minimize the high cost of commissions of online travel agencies (OTA), the majority of hospitality operators provide member only exclusive rates to encourage consumers to book on their websites directly. However, the revenue cannot be maximized due to the amount of discount. This dissertation suggests that hospitality operators may maximize their profit with the adoption of surprise discount to increase consumers’ unplanned purchases. Applying the mental accounting principle, this dissertation examines how consumers respond to a surprise discount when they make unplanned purchases, such as purchasing add-on items online. This dissertation utilized three experiments in an online hotel booking setting and a cruise line booking setting. The first study utilized a quasi-experiment to test the effect of mental budget (none vs. budget), discount type (none vs. regular vs. surprise), and thinking style (analytic vs. holistic) in the setting of an online hotel room booking. The second study utilized an experimental design to demonstrate how consumers’ preference of add-on product type (utilitarian vs. hedonic) can be influenced by the depth of surprise discount (low vs. medium vs. high). The mediating role of impulse buying was subsequently examined using a bootstrapping model. The third study finalized consumers’ unplanned purchase decision process by testing the key determinants of unplanned purchases. The effects of surprise discount, product type, and thinking style were tested along with the mediating effect of impulse buying in a cruise line online booking setting.

The results of study 1 demonstrate that holistic thinkers’ unplanned purchases can be mitigated by mental budget; however, its effect is suppressed by a surprise discount. A surprise discount is more effective for holistic thinkers than for analytic thinkers when it comes to inducing unplanned purchases when they purchase hotel room products. Study 2 demonstrates that consumers prefer a hedonic add-on item to a utilitarian item for their subsequent hotel purchases when they receive a low discount. When medium and high discounts are offered, product type effect is no longer significant. A hedonic add-on item increases consumers’ impulse buying traits, which results in higher consumers’ intentions to purchase add-on items. The findings of study 3 show that the nature of cruise line products encourages holistic thinkers to purchase add-on items, while analytic thinkers are encouraged to make unplanned purchases by a surprise discount. Analytic thinkers’ preference for hedonic add-on items can be enhanced by a surprise discount, while their preference for utilitarian add-on items is not influenced. Consumers’ unplanned purchase decision process was finalized, using a bootstrapping analysis, whereby a surprise discount enhances consumers’ perceived transaction value, which increases impulse buying traits. The promoted impulse buying traits increase consumers’ intentions to purchase add-on items online.

This dissertation is differentiated from previous research by examining the extended role of discount on consumers’ unplanned purchases and thinking styles in different decision conditions. This dissertation provides practical suggestions for hospitality operators, who are encouraged to utilize a surprise discount to induce consumers’ unplanned purchases online.

Keywords

Hedonic Value; Impulse Buying; Thinking Style; Unplanned Purchase; Utilitarian Value; Windfall Gain

Disciplines

Business Administration, Management, and Operations | Marketing

File Format

pdf

File Size

5.0 MB

Degree Grantor

University of Nevada, Las Vegas

Language

English

Rights

IN COPYRIGHT. For more information about this rights statement, please visit http://rightsstatements.org/vocab/InC/1.0/

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