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Journal of Retailing 88 (1, 2012) 72–87
Effects of Expiration Date-Based Pricing on Brand Image Perceptions
Aristeidis Theotokis a,∗, Katerina Pramatari b,1, Michael Tsiros c,d,2
aLeeds University Business School, Maurice Keyworth Building, The University of Leeds, Leeds LS2 9JT, UK
bDepartment of Management Science and Technology, Athens University of Economics and Business, Athens, Greece
cSchool of Business Administration, University of Miami, United States
dTassos Papastratos Research Professor, ALBA Graduate Business School, Athens, Greece
Abstract
Expiration date-based pricing (EDBP) occurs when a grocery retailer reduces the price of a perishable product according to its remaining shelf
life. While, conventional wisdom suggests that this practice leads to negative consumer evaluations of brand quality, a series of field experiments
reveal negative effects on brand quality perceptions only among loyal consumers and those who perceive low risk associated with perishables. The
effect is also mediated by consumer distrust (Study 1). In addition, EDBP has no effect on brand quality image if consumers are already familiar
with this pricing practice (Study 2), and it may even generate positive consumer evaluations when framed as a cause-related marketing activity
to reduce waste (Study 3). Additional evidence indicates that psychological contract violation perceptions provide the underlying mechanism for
explaining consumer responses to EDBP (Study 4). This article ends with an agenda for further research and implications for retail practice.
© 2011 New York University. Published by Elsevier Inc. All rights reserved.
Keywords: Pricing; Grocery retailing; Perishables; Expiration date; Psychological contract violation
Many grocery retailers discount perishable products as they
approach their expiration date, in an attempt to reduce waste
(Donselaar et al. 2006). The advent of new technologies that
can automatically identify and transmit product-related infor-
mation gives retailers broader opportunities for applying this
practice (Eckfeldt 2005; Pramatari and Theotokis 2009). Mar-
keting researchers also note the importance of expiration dates
for retailing and consumer research, in that consumers take this
product characteristic into account when making purchase and
consumption decisions about perishables (Harcar and Karakaya
2005; Sen and Block 2009; Tsiros and Heilman 2005).
We investigate expiration date-based pricing (EDBP), which
we define explicitly as a pricing tactic in which a retailer charges
different prices for the same perishable products, according to
their respective expiration dates. Retailers often consider EDBP
an effective revenue management tool that increases demand and
reduces waste. Yet despite its potential benefits, limited research
∗Corresponding author. Tel.: +44 0113 343 0706.
E-mail addresses: a.theotokis@leeds.ac.uk (A. Theotokis),
k.pramatari@aueb.gr (K. Pramatari), tsiros@miami.edu (M. Tsiros).
1Tel.: +30 2108203663.
2Tel.: +1 305 284 5950.
to date examines how consumers perceive the practice or its
likely effect on brand quality image.
In general though, pricing and promotion literature suggests
that price discounts may lead to negative consumer evaluations
in terms of perceived brand quality (Grewal et al. 1998) and
future purchase intentions (DelVecchio, Henard, and Freling
2006). Existing research on dynamic pricing and price discrim-
ination also suggests that price differences for the same product
or service seem unfair to consumers (Haws and Bearden 2006;
Kimes and Wirtz 2003; Xia, Monroe, and Cox 2004) and can
have negative effects on consumer trust (Garbarino and Lee
2003), even if the prices decrease due to demand (Xia, Kukar-
Kinney, and Monroe 2010). Thus discounting perishables could
lead to negative product quality inferences, with harmful resul-
tant effects on store or brand image as well. Thus, Tsiros and
Heilman (2005, p. 128) conclude their study by noting that “man-
agers should weigh the trade-offs between the potential benefits
of discounting perishables to sell inventory and its potential neg-
ative effects on store image” and calling for further research to
investigate the question. Yet their initial empirical evidence indi-
cates that discounting perishables does not have a negative effect
on store or brand image and that consumers’ willingness to pay
for a perishable decreases with its shelf life. Further empiri-
cal evidence shows that the short- and long-run effectiveness of
0022-4359/$ – see front matter © 2011 New York University. Published by Elsevier Inc. All rights reserved.
doi:10.1016/j.jretai.2011.06.003
A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87 73
price promotions is greater for perishable goods than for other
categories (Nijs et al. 2001).
These conflicting results, and the importance of brand quality
image for perishables, make it difficult for managers to imple-
ment EDBP. They require a better understanding of the short-
and long-term effects of this practice on consumer perceptions;
accordingly, we aim to advance knowledge about whether, how,
and in which conditions EDBP affects consumer perceptions in
terms of perceived brand quality.
Specifically, building on existing research on expiration
dates and social exchange theory (Blau 1964), we propose that
consumers perceive product quality conformance before the
expiration date as a psychological contract (Rousseau 1995;
Rousseau and Tijoriwala 1998). A psychological contract exists
when one party believes that another is obligated to perform
certain behaviors (Rousseau 1995); it differs from the broader
concept of an expectation because contracts have a promis-
sory character (Rousseau and Tijoriwala 1998). Thus, from a
buyer’s standpoint, psychological contracts reflect perceptual
beliefs about the seller’s contractual obligations (Pavlou and
Gefen 2005), and psychological contract violation (PCV) arises
when people believe they are not getting what they expected
according to the contractual agreement (Morrison and Robinson
1997; Robinson 1996; Robinson and Morrison 2000).
In addition, we recognize that a price discount before the
product’s expiration date may function as a signal of decreasing
quality (Baker et al. 2002; Grewal, Gotlieb, and Marmorstein
1994). Therefore, we propose that PCV between the consumer
and the brand provides the underlying mechanism that explains
consumer reactions to EDBP. For perishables, unlike other
product categories, consumers may perceive product quality
conformance as a contractual agreement that is expressed by the
expiration date. Thus their exposure to discounting for perish-
ables may prompt a perception of PCV that leads the consumer to
distrust the brand and negatively influences brand quality image.
Motivated by this theoretical approach, we suggest that the
effect of EDBP is contingent on several conditions that mod-
erate the existence of a PCV. For example, the expiration date
risk, or the perceived risk associated with consuming or pur-
chasing a perishable product approaching its expiration date
(Sen and Block 2009; Tsiros and Heilman 2005), together with
brand loyalty, likely define the existence and nature of a psy-
chological contract. In addition, as consumers become more
familiar with this practice, the signal that EDBP sends may be
attenuated, which decreases PCV. Moreover and in line with cor-
porate social responsibility (CSR) literature (Fornell et al. 1996;
Yoon, Gürhan-Canli, and Schwarz 2006), we suggest that fram-
ing EDBP as a “green marketing” practice may reverse its effect
on brand quality image by creating positive CSR (i.e., reduced
waste) associations.
We conduct four empirical studies to test these propositions.
Study 1 consists of a field experiment in which we implement,
in collaboration with a western European dairy company, EDBP
for milk products in two stores of a supermarket chain. We
show that EDBP, compared with regular pricing, has a negative
effect on brand quality image, though only among loyal con-
sumers or those who perceive low levels of risk associated with
perishables. This effect is also mediated by consumer distrust.
Study 2 is a field study in a supermarket chain that already applies
EDBP for its meat category; we thus investigate how consumer
familiarity with the practice affects responses. In Study 3, we
conduct another field study to investigate the effect of EDBP
framing on consumer reactions. Tsiros and Heilman (2005)
suggest retailers should frame EDBP as a cause-related mar-
keting activity by presenting it as an alternative to throwing
away products and therefore a means to reduce environmental
waste. We consider whether this framing may mitigate or reverse
the negative effects of EDBP. Finally, in Study 4, we replicate
our findings and provide more direct support of the theoretical
explanation of psychological contract violation. That is, in a lab-
oratory experiment, we manipulate the pricing tactic and capture
consumer thoughts about the brand. The results show that in the
hypothesized conditions, EDBP invokes a significant number of
PCV thoughts among consumers.
In the next section, we define the EDBP concept and our the-
oretical background. We then present the four studies in detail.
Finally, we conclude with a discussion of the research findings
and their implications for managers and researchers.
Research background
Expiration date-based pricing
Variable pricing or price discrimination is a tactic in which
a “retailer charges different prices for identical products and/or
services sold to different customers” (Levy and Weitz 2006,p.
418). Price discrimination tactics are usually classified accord-
ing to the rate fence used, that is, the rules that the company uses
to determine who gets which price and what determinants can be
used to help differentiate one transaction from another (Kimes
and Wirtz 2003). Rate fences can be physical (e.g., seat location
in a theater, size and furnishings of a hotel room) or nonphysical
(e.g., senior citizen, quantity or frequency of purchase; time of
booking) characteristics.
Expiration date-based pricing is a particular form of second-
degree price discrimination, in which the expiration date
represents a physical rate fence that discriminates prices
(Desiraju and Shugan 1999; Elmaghraby and Keskinocak 2003;
Gallego and van Ryzin 1994; Kimes and Wirtz 2003); it also
constitutes a sales promotion that provides a temporary incen-
tive to encourage the purchase of a perishable. However, EDBP
has some particular characteristics that distinguish it from other
price discrimination or promotion practices. First, it is a self-
selected price discrimination technique (Levy and Weitz 2006),
which means that it clearly provides consumers with options.
Unlike revenue management practices in the services industry
(e.g., airlines), consumers can select whether they will buy a
discounted, older item or a regularly priced, fresher version of
the product. Second, in contrast with in-store promotion prac-
tices, the discounted product in EDBP appears right next to
fresher, nondiscounted items. Consequently, this form of promo-
tion presents the price–quality trade-off directly to consumers.
Third, the rate fence that EDBP uses is a distinguishing product
characteristic, the expiration date, that may function as a signal
74 A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87
of product quality (Sen and Block 2009; Tsiros and Heilman
2005) or an attribute that defines the value of the product.
Whereas price discrimination in other industries usually tries to
discriminate identical products (e.g., tickets for the same jour-
ney, identical hotel rooms), the products in an EDBP scheme are
not identical, since their expiration dates differ. Fourth, EDBP
can be applied solely to perishable product categories, which is
largely specific to, and critical for, grocery retailers’ profitability
and image (Tsiros and Heilman 2005).
Modeling consumer responses to EDBP
Academic researchers have studied consumer responses to
many pricing and price promotion tactics, including every-
day low prices (EDLPs) and Hi-Lo pricing (Darke and
Chung 2005), comparative pricing (Blair, Harris, and Monroe
2002), multiple-unit price promotions (Manning and Sprott
2007), price-matching guarantees (Kukar-Kinney, Walters, and
MacKenzie 2007; Kukar-Kinney, Xia, and Monroe 2007),
“steadily decreasing discounting” (Tsiros and Hardesty 2010),
and even “pay what you want” pricing (Kim, Natter, and Spann
2009). Of the variables used to model consumer responses to
such promotional tactics, extant literature suggests brand image
perceptions are important outcomes that indicate post promo-
tion brand preferences and predict the long-term effects of a
pricing tactic (DelVecchio, Henard, and Freling 2006). Studies
measuring brand image thus typically gauge shifts in consumers’
overall perceptions of brand quality after their exposure to a sales
promotion (e.g., Dawar and Sarvary 1997; Raghubir 2004).
Similarly, we attempt to model the process by which con-
sumers formulate perceptions of brand quality after their
exposure to an EDBP practice. This process may be differ-
ent and somehow independent of the purchase decision process
(DelVecchio, Henard, and Freling 2006). That is, the purchase
decision in a EDBP setting (buy the “cheaper” or the “fresher”
product) is an important and under-researched outcome, but we
consider the long-term effects of this practice, in terms of brand
quality perceptions, even more important. For example, retailers
and producers of perishables tend to avoid using EDBP, despite
its potential to increase short-term sales, for fear of its negative
long-term effects on brand image. Furthermore, consumer per-
ceptions of brand quality are critical for perishables and closely
related to high quality consciousness (Harcar and Karakaya
2005; Krider and Weinberg 2000). Therefore, focusing on con-
sumer perceptions of brand image as an outcome of EDBP is
both theoretically meaningful and managerially relevant.
Another important issue in this context is the distinction
between the retailer’s (store) versus the supplier’s (manufac-
turer) brand image. Sales promotion research suggests that an
in-store promotion can affect both retailer and supplier images
(Grewal et al. 1998). In the case of EDBP, either the retailer
or the producer provides the discount, and depending on their
agreement, the retailer may be fully or partially reimbursed
for unsold quantities. However, for unbranded or private-label
perishables, the cost of waste accrues directly to the retailer.
Thus, a manufacturer may be motivated and responsible for the
EDBP in the case of branded perishables, but the retailer takes
responsibility in the case of unbranded or private-label perish-
ables, and we predict that EDBP affects the brand image of the
responsible party. With this logic, we hypothesize that EDBP
affects the producer’s brand image when applied to branded
products (Studies 1, 3 and 4),3but the impact centers on the
retailer’s (store) image when unbranded products are discounted
(Study 2). We conceptualize under a similar logic all the other
variables included in studies (e.g., distrust, loyalty), as well.
Theoretical background: a psychological contract violation
approach
Marketing literature has established the role of consumer
expectations as central to any understanding of consumer
responses (Zeithaml, Berry, and Parasuraman 1993). Especially
in the case of perishables and private-label products, consumer
expectations regarding product quality are key (Batra and Sinha
2000; Chan Choi and Coughlan 2006; Sprott and Shimp 2004).
Within the context of organizational relationships, researchers
thus suggest the concept of a psychological contract (Morrison
and Robinson 1997; Robinson 1996; Robinson and Morrison
2000), which exists if one party believes that another is obli-
gated to perform some behaviors (Rousseau 1995). Consumers’
expectations of perishables’ quality before the expiration date
may take the form of such a psychological contract, between
the consumer and the perishable manufacturer or retailer. We
hypothesize that this psychological contract is critical to under-
standing consumer responses to EDBP.
Furthermore, social exchange theory (Blau 1964) requires
a careful distinction between a psychological contract and the
broader concept of expectation in that “although all psycholog-
ical contracts entail expectations that a person or a firm will
act in a particular way, not all expectations are contractual”
(Rousseau and Tijoriwala 1998, p. 80). In a psychological con-
tract, the constitutive beliefs result from promises. Therefore,
psychological contracts, unlike expectations, have a promissory
character. Furthermore, the perceptual, unwritten and implicit
nature of psychological contracts distinguishes them from legal
contracts (Argyris 1960). Therefore, psychological contracts are
much broader than economic and legal contracts and include per-
ceptual aspects that cannot be formally incorporated into legal
contracts.
Violations of psychological contracts arise if people think
they are not getting what has been promised by a contractual
agreement. Most examinations of the concept of psychological
contract violation (PCV) appear in the context of organiza-
tional relationships, though recently researchers have proposed
extending it to buyer–seller relationships (Goles et al. 2009; Hill
et al. 2009; Pavlou and Gefen 2005; Russel and Anthony 2007).
From a buyer’s standpoint, psychological contracts consist of
perceptual beliefs about the seller’s contractual obligations
3In the case of branded products, we assume that consumers attribute the
discount and overall practice to the brand manufacturer, not the retailer. We
include store image measures in Studies 1 and 3 to test this assumption and find
insignificant main or interaction effects of EDBP on store image.
A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87 75
(Pavlou and Gefen 2005), so every buyer–seller interaction can
be characterized by the psychological contract that features buy-
ers’ expectations of the seller, which are not included in the
formal legal terms of the exchange. A buyer may perceive PCV
if a seller fails to fulfill its contractual obligations, due to fraud,
product misrepresentation, contract default, delivery delay, or
reneging on product guarantees and payment policies (Pavlou
and Gefen 2005).
Importantly, casual attributions, that is inferences about the
reasons or motives that led to PCV—are considered as a criti-
cal factor that determines the consequences of PCV. Attribution
theory suggests that people are likely to search for causal expla-
nations for an event when the event is surprising, negative, or
both. Thus, Morrison and Robinson (1997) made a concep-
tual distinction between perceived contract breach, which is
a perception, and the experience of contract violation which
is more an affective or emotional state that may or may not
accompany that perception. They argued that, immediately fol-
lowing the perception of a contract breach, employees engage in
a cognitive process through which they attempt to infer motives
regarding this breach. This interpretation process, in turn, mod-
erates the relationship between perceived breach and feelings
of violation. Therefore, causal attributions regarding the PCV
determine the intensity of negative emotions that the employee
will experience (Robinson and Morrison 2000). In other words,
inferred motives are considered to be an integral part of the
PCV development process by actually defining the outcome of
this process.
Based on the literature that has examined the critical role
of PCV and its negative impact on organizational relationships
(Morrison and Robinson 1997; Robinson 1996; Rousseau 1989),
we propose that PCV is central to an understanding of the
effects of EDBP on consumer perceptions. When consumers buy
perishables, they clearly have a perceptual expectation—which
implies a psychological contract between them and the retailer
or producer—that the perishables will perform according to cer-
tain standards prior to their expiration date. The appearance of
the expiration date on perishables’ packaging symbolizes this
psychological contract. Before the date, the product should con-
tinue to offer the same or similar quality, which is why expiration
dates are often denoted using the working “best before” (Tsiros
and Heilman 2005). The legal obligation states only that the per-
ishable product must be consumable up to the expiration date;
the psychological obligation is more demanding: The product
should be of equal quality.
In parallel, pricing and promotion literature reveals that price
usually functions as quality cue (Baker et al. 2002; Grewal,
Gotlieb, and Marmorstein 1994). Therefore, discounting perish-
ables before their expiration date may signal that their quality has
decreased prior to the expiration date, which represents a viola-
tion of the psychological contract of persistent quality before the
expiration date. However, we also posit that both the existence
and nature of a psychological contract depend on consumers’
perceptions of expiration date risk and brand loyalty; further-
more, we anticipate that the strength of the signal that EDBP
sends is moderated by consumers’ familiarity and promotion
framing.
We depict the suggested mechanism of consumer responses
to EDBP in Fig. 1. The figure could be decomposed into three
parts: The left side part, the upper right part and the lower right
part. The left side of the figure shows that EDBP may signal
consumers that the quality of perishables decreases before the
expiration date. However, this signal weakens if consumers are
already familiar with the practice or if it is framed in a positive
way (e.g., green marketing). The upper right side of the figure
represents consumer expectations about product quality before
the expiration date. For consumers who perceive lower risk asso-
ciated with perishables, their expectations may take the form of a
psychological contract. This contract should be stronger among
brand-loyal consumers.
Consistent with the psychological contract paradigm from
organizational relationships, the lower right side of Fig. 1 shows
that the level of discrepancy between consumer expectations
and brand signals through EDBP practices defines the level and
existence of PCV. If discrepancy exists between the brand sig-
nal and consumer expectations (i.e., the EDBP signal is strong
and consumers’ expectations form a psychological contract),
consumers perceive their exposure to EDBP as a PCV that neg-
atively affects their trust and brand quality image. If the EDBP
signal is weak or consumers’ expectations do not take the form
of a psychological contract, we anticipate no PCV and con-
sumers perceptions’ of brand quality should derive instead from
other information cues and perceptions.4Based on this mech-
anism, we develop next our formal arguments using relevant
theories and thereby offer specific research hypotheses regarding
the effects of EDBP.
Moderating role of expiration date risk and brand loyalty
According to Tsiros and Heilman (2005, p. 119), product
quality or expiration date risk “captures the perceived risks
associated with product quality as a perishable approaches its
expiration date and the associated health risks.” In general, per-
ceived risk is the expected negative utility associated with the
purchase of a particular brand or product; prior literature notes
its effects on consumer decisions (Grewal et al. 2007). Recent
evidence shows that consumer willingness to pay for a perish-
able decreases more for higher risk product categories (Tsiros
and Heilman 2005). That is, when consumers have higher expi-
ration date risk perceptions, they expect the quality of a product
to decrease as it approaches its expiration date.
We use the term expiration date risk to denote the perceived
quality risk associated with the expiration date, and we postulate
that it actually defines the existence of a psychological contract
between the consumer and brand. As we outline in Fig. 1, con-
sumers who associate high risk with perishables do not expect
the quality to remain stable across the entire shelf life (No PCV),
4For instance, consumer perceptions about brand image can be affected by
value perceptions. In this case, consumers from households with higher con-
sumption rates would perceivehigh value associated with discounted product and
therefore could develop favorable attitudes towards the brand. Future research
could investigate how the perceived value of the discounted product and the
actual purchase decision could affect brand image.
76 A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87
Brand
Loyalty
Psychological contract between buyer and seller
Expiraon
Date Risk
yy
Brand loyalty affects
the nature of
psychological
ED risk defines the
existence of
psychological
ED is a promise
from the seller
that perishables’
quality remains
Familiarity with the
i
contract contract
Familiarity Quality of
quality remains
the same
gnal
practice aenuates
the signal
(PCV)
Quality of
perishables
decreases before ED
EDBP sig
EDBP
Framing
(PCV)
The level of the discrepancy between
EDBP signal and consumer expectaons
define the level and existence of PCV
Distrust
CRM-framed EDBP
induces posive
associaons that
aenuate the signal
No PCV Low or High PCV
Distrust
Brand Quality
Image
Consumers use addional cues
to formulate percepons
regarding brand quality image
Psychological Contract Violaon
Fig. 1. Consumers’ responses to EDBP.
whereas consumers with low expiration date risk perceptions5
expect them to retain same quality for their shelf life (Low or
High PCV). According to the suggested theoretical framework,
EDBP thus may lead to negative consumer perceptions if they
experience PCV, but if there is no PCV, consumers use other
information cues to formulate their expectations of brand qual-
ity, so the effect of EDBP on brand evaluations is insignificant.
We thus hypothesize:
H1. Expiration date risk moderates the effect of EDBP on
brand quality image. Exposure to EDBP has a negative effect
when consumers perceive a lower expiration date risk, but the
effect is weaker (or insignificant) if consumers perceive a higher
expiration date risk.
Psychological contracts may be transactional or relational in
nature (Robinson 1996). A contract at the transactional end of
the continuum consists of specific, short-term obligations that
demand limited involvement by the parties. A contract at the
relational end instead entails broad, open-ended, long-term obli-
gations. Therefore, different consumer segments likely perceive
different types of psychological contracts with a brand.
Lewicki, McAllister, and Bies (1998) suggest that in an early
stage of a buyer–seller relationship, both parties are regulated by
5We conceptualize expiration date risk as a consumer-related characteristic,
because our field studies examine one specific product category each, and exist-
ing research suggests that different consumers perceive different risk levels for
the same product categories (Sen and Block 2009; Tsiros and Heilman 2005).
However, expiration date risk can also be conceptualized as a product-specific
variable.
the potential benefits of their promises, the costs of cheating, or
both (i.e., calculus-based trust). Over repeated interactions, their
relationship develops, and the two parties begin to know each
other (i.e., knowledge-based trust). Consequently, for estab-
lished buyer–seller relationships, such as exist for brand-loyal
consumers; the psychological contract should be stronger and
more relational in nature, whereas for less loyal consumers it
may be weaker and transactional. In turn, PCV should have
a stronger impact on the evaluations of loyal consumers, who
may feel betrayed, or mistreated (Feinberg, Krishna, and Zhang
2002). We hypothesize:
H2. Brand loyalty moderates the effect of EDBP on brand
quality image. The negative effect of EDBP is weaker (or
insignificant) among nonloyal consumers.
Mediating role of distrust
Customer trust constitutes a mediating variable in several
contexts and disciplines (Sirdeshmukh, Singh, and Sabol 2002);
price discrimination literature also suggests trust is an important
outcome of consumers’ exposure to dynamic pricing (Garbarino
and Lee 2003) and an antecedent of perceived price fairness (Xia,
Monroe, and Cox 2004). Existing research further indicates that
the main outcome of PCV is decreased trust or the appearance of
distrust (Morrison and Robinson 1997; Pavlou and Gefen 2005;
Robinson 1996).
Distrust is related but qualitatively different from trust (Cho
2006; Kramer 1999; Lewicki, McAllister, and Bies 1998). Con-
ceptually, it refers to a mindset that suggests the trustee should
be avoided; if unavoidable, the trustee should be treated with
A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87 77
F ili itFamiliarity
H4
Pricing Tacc
Regular Pricing vs.
Expiraon Date Based
Pricing (EDBP)
Distrust
Brand Image
Perceived
Brand Quality
H3
H1H2
EDBP Framing
Promoon-framed vs.
CRM-framed
H5
Brand
Loyalty
Expiraon
Date Risk
Study 1,4
Study 2
Study 3,4
y,
Fig. 2. Model of consumer responses to EDBP.
distinct attempts to minimize potential vulnerabilities. The main
difference between trust and distrust is that trust involves a belief
that the trustee will probably behave in an acceptable manner
(Sirdeshmukh, Singh, and Sabol 2002), whereas distrust rules
out this belief upfront and therefore provokes a strong focus on
potential vulnerabilities (Gefen, Benbasat, and Pavlou 2008).
Although trust builds over time, distrust can arise imme-
diately after a negative experience (Parkhe 1998). Capturing
shifts in consumer distrust is thus easier than capturing trust,
which usually requires longitudinal research designs. Similarly,
a decrease in trust may have a negative effect on consumer eval-
uations in the long-term, but distrust effects are more obvious
in the short-term. For these reasons, we use distrust, instead of
trust, as a direct outcome of consumers’ perceptions of PCV due
to an exposure to EDBP and predict that this outcome can gener-
ate negative brand image evaluations. Accordingly, we propose
PCV as the underlying mechanism that explains the effects of
EDBP, expiration date risk and loyalty on brand image, whereas
distrust is the intervening variable that mediates the effects, and
we propose:
H3. Distrust mediates the effects of EDBP, expiration date risk,
and loyalty on brand quality image (mediated moderation).
We provide our conceptual model in Fig. 2; we formally
develop H4 and H5 in Studies 2 and 3, respectively.
Study 1: EDBP effects on distrust and brand quality image
We used a field experiment to compare consumer reactions
to the presence versus absence of an EDBP practice, taking
into account the hypothesized moderating factors. This experi-
ment, conducted in May 2008, featured two supermarket stores
in Athens, Greece. In collaboration with a market leader dairy
brand, we applied expiration date-based pricing to the milk cat-
egory. According to previous interviews with managers, this
pricing tactic has been applied very rarely in supermarkets in
Greece, so consumers should not be familiar with it. Greece
therefore offers an appropriate, real-world context in which
to compare consumer responses before and after exposure to
EDBP.
Experimental design
We applied a between-subjects experimental design, in which
we manipulated consumer exposure to EDBP as a between-
subjects factor. After our discussion with brand and store
managers, we decided to apply EDBP by discounting the price
on milk one day before its expiration date. As we show in Fig. 3,
the milk products of this brand offered five days of shelf life
after pasteurization. The night of the fourth day, a merchan-
diser would remove products from the shelf. For this study,
on the morning of the fourth day, we applied a discount of
25%, which was a common discount depth offered by this brand
on other dairy products. We detail the experimental design in
Table 1.
Data collection and sample
The data collection took place in stores, for two weeks before
the implementation and two weeks during the EDBP imple-
mentation. For the experimental period, all other activity (e.g.,
number of staff) in the store remained constant. In addition, there
were no other promotions in the milk category. The researchers
intercepted respondents in stores just after they checked out
78 A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87
25% OFF Regular Price
Day
5
Expiraon
Day
4
Day
3
Day
2
Day
1
Shelf
Day
0
Milk Expiraon
Date
On Shelf
On ShelfOn Shelf
Shelf
Placement
Milk
Pasteurizaon
Fig. 3. Application of EDBP for milk: Study 1.
Table 1
Experimental design: Study 1.
Pre-exposure Post-exposure
Time/place T1 (Weeks 1 and 2),
Stores A and B
T2 (Weeks 3 and 4),
Stores A and B
Sample size N= 337 N= 367
Manipulated variable EDBP absence
(regular pricing)
EDBP presence (25%
off one day before
expiration)
Measured variables Expiration date risk
Brand loyalty
Brand quality image
Distrust
Expiration date risk
Brand loyalty
Brand quality image
Distrust
and adopted a face-to-face, personal interview method. The data
collection occurred on low-, medium-, and high-peak shopping
days (Bush and Hair 1985). A screening question ensured that
all respondents had bought milk during this shopping trip and
thus were exposed to the milk section of the store. During the
of EDBP (T2) period, an additional screening question asked if
respondents had noticed the practice. Overall, we collected 704
usable questionnaires, 337 (48%) before (T1) and 367 (52%)
during the EDBP implementation (T2). Of the respondents, 69%
were women and 56% were married. The sample was balanced
in terms of the age groups represented: 51% were in the 25–44
years group, and approximately one-third were older than 44
years. Moreover, in terms of gender, age, and marital status, the
sample was similar for both experimental periods and generally
representative of the Greek supermarket shoppers, according to
the retail managers of five chains.
Measurement
Respondents indicated their perceptions of the involved dairy
brand’s quality using two items adopted from Grewal et al.
(1998). The distrust measure was a three-item scale adapted from
Cho (2006). We measured loyalty to the specific brand with a
dummy variable, equal to 1 if consumers indicated that their
Table 2
Variable descriptive results: Study 1.
T1
Regular pricing
T2
EDBP
Expiration Date Riska3.28 (1.22) 3.25 (1.01)
Brand Loyaltyb30% 32%
Distrusta2.11 (.854) 2.15 (.802)
Brand Quality Imagea3.4 (.978) 3.5 (.988)
aMean and standard deviation in parentheses, five-point scale, higher numbers
mean higher variable levels.
bPercentage of respondents who indicate focal brand as their main dairy brand.
primary brand was the study brand, and 0 otherwise6(Rossiter,
2002; Sloot, Verhoef, and Franses 2005). The respondents also
completed a scale to measure their expiration date risk, adopted
from Tsiros and Heilman (2005). We used a median split anal-
ysis to divide the sample to low and high expiration date risk
groups.
We assessed the psychometric properties of the measures with
confirmatory factor analysis and found acceptable psychometric
properties for the scale reliabilities. The coefficient alpha values
were between .85 and .90, and the composite reliabilities were
between .75 and .85. We provide detailed measures in Appendix
A. The interviews also included measures of consumers’ milk
purchases (i.e., brand, package size, and price), which served as
control variables in our analysis.
Results
Table 2 contains a summary of consumer responses to the
study variables. The results pertaining to consumer perceptions
of expiration date risk and brand loyalty remained consistent
over the two experimental periods. In Table 3, we summarize
6To minimize any influence of common method variance, we implemented
more straightforward measures for brand loyalty (Rossiter 2002). Consistent
with similar studies that investigate consumer responses in a field context (e.g.,
Sloot, Verhoef, and Franses 2005), we used a behavioral measure (primary brand,
no/yes) instead of a self-reported Likert-type item (e.g., “I consider myself loyal
to this brand”).
A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87 79
Table 3
Purchase decision data: Study 1.
T1, Regular Pricing T2, EDBP
Milk purchase N= 337 N= 367
Brand purchase Focal brand Other brands Focal brand Other brands
112 (33%) 225 (67%) 120 (32%) 247 (68%)
EDBP purchase EDBP Regular pricing EDBP Regular pricing
– 112 (33%) 36 (10%) 84 (22%)
the purchase decision data; 33% and 32% of respondents have
purchased milk from the focal brand during T1 and T2 respec-
tively, and during the EDBP implementation (T2), 10% of the
total sample (or 30% of those who purchased the focal brand)
purchased discounted milk approaching its expiration date.
To analyze the brand quality image responses, we used a 2
(pricing tactic: EDBP vs. regular) ×2 (expiration date risk: low
vs. high) ×2 (brand loyalty: loyal vs. nonloyal) between sub-
jects analysis of variance (ANOVA). Exposure to EDBP and
expiration date risk had nonsignificant main effects (p> .1) on
brand image quality, whereas brand loyalty had a significant
main effect (F1, 697 = 12.45, p< .05). That is, loyal consumers
expressed higher perceptions of brand quality (M= 3.8) than did
nonloyal consumers (M= 3.2). Regarding the interactions, we
found that exposure to EDBP interacted with both brand loyalty
(F1, 697 = 92.55, p< .05) and expiration date risk (F1, 697 = 55.20,
p< .05). As we show in Fig. 4, follow-up contrasts revealed that
for consumers who perceive higher levels of expiration date risk,
this pricing tactic does not affect their brand image perception
significantly (Mregular = 3.32, MEDBP = 3.45), but for consumers
with lower levels of expiration date risk, exposure to EDBP had
a negative effect on brand image (Mregular = 3.5, MEDBP = 2.8,
p< .05), in support of H1. Similarly, the effect of EDBP
was significantly negative for loyal consumers (Mregular = 4.1,
MEDBP = 3.2, p< .01) but insignificant for nonloyal consumers
(Mregular = 3.3, MEDBP = 3.1), in support of H2. The three-way
interaction effect (pricing practice, expiration date risk, and
brand loyalty) was also significant (F1, 697 = 10.09, p< .05),
though we did not formally establish this hypothesis.
We tested for the effects of purchase decision (brand, size,
and price) on consumer perceptions of brand quality as well.
As expected, consumers who have purchased the focal brand
indicated higher perceptions of brand quality (M= 3.8) than
consumers who purchased other brands (M= 3.2). This result
is consistent with the effect of brand loyalty on brand image. In
a separate analysis of the effect of the purchase decision dur-
ing the EDBP period among consumers who have purchased
the focal brand, we found no significant difference, in terms of
brand quality perceptions, between the group of consumers who
chose to purchase the cheaper, nearly expired milk and those
who purchased the fresher, more expensive milk. This result is
consistent with existing literature (e.g., DelVecchio, Henard, and
Freling 2006; Grewal et al. 1998) that suggests that the short-
term effect of a promotion (i.e., consumer purchase decision)
may be independent of the long-term effect (i.e., brand image).
Mediated moderation tests
Our theoretical development, especially H3, proposes a medi-
ated moderation (Baron and Kenny 1986; Muller, Judd, and
Yzerbyt 2005), in which the moderating effect of brand loy-
alty and expiration date risk is mediated by distrust. That is, we
have predicted that brand loyalty and expiration date risk mod-
erate the effect of EDBP on distrust, which in turn influences
brand quality perceptions.
There are three models available to examine mediated mod-
eration (Muller, Judd, and Yzerbyt 2005). The first is the one we
tested previously, with brand quality as the dependent variable
(model A). The significant interaction effect of the independent
variable (pricing tactic) with the two moderators (expiration date
risk and brand loyalty) on brand image provides initial sup-
port for mediated moderation. To test distrust as a mediating
variable, we next examined the same model but with distrust
as the dependent variable (model B). This analysis revealed
that pricing practices, brand loyalty, and expiration date risk
had no significant main effects on distrust (p> .05), but we
Fig. 4. Moderating effect of expiration date risk and brand loyalty: Study 1.
80 A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87
found a significant interaction effect of EDBP with brand loyalty
(F1, 704 = 34.03, p< .05) and expiration date risk (F1, 704 = 32.03,
p< .05). Because the results from model B follow the same pat-
tern as those in model A, the initial variables are likely correlated
with the mediator (Baron and Kenny 1986). Finally, with the
third model (model C), we examined if the mediator (distrust)
affected the outcome variable (brand image) when we controlled
for the effects of the initial variables (pricing tactic, brand loy-
alty, expiration date risk, and the interactions). We found a
significant effect of distrust on brand image (F1, 704 = 58.45,
p< .05) and a nonsignificant effect of the initial variables. There-
fore, in the presence of the mediator, the effect of the initial
variables became insignificant. This pattern of results indicates
that distrust is a mediator of the effects of the pricing tactic,
expiration date risk, and brand loyalty on brand quality image
(Muller, Judd, and Yzerbyt 2005), in support of H3.
In summary, Study 1 provides initial empirical support for
H1 and H2 by confirming that EDBP effects on brand image
differ between low and high expiration date risk conditions
but also between loyal and nonloyal consumers. Additionally,
Study 1 supports H3 by showing that EDBP affects distrust and
through distrust it affects brand image. A limitation of Study
1 is that EDBP has been tested in a country that this prac-
tice is applied very rarely and therefore consumers are quite
unfamiliar with it. We conducted Study 2 to provide further
empirical support for the research hypotheses by testing con-
sumer responses in a context that EDBP is already applied. In
this way, we are also able to investigate the effects of EDBP in
long-term.
Study 2: long-term effects of EDBP
Study 2 extends the findings of Study 1 in three ways. First,
we test if the results of Study 1 are also valid for consumers who
are already familiar with EDBP. In so doing, we also extend our
model beyond the short-term consumer responses to EDBP in
Study 1 to determine if long-term exposure to EDBP influences
brand quality image over time and how this effect may change
as consumers become more familiar with the practice. Second,
though milk is a good representative of perishable product cat-
egories, previous studies have shown that consumer responses
to expiration dates differ across categories (Tsiros and Heilman
2005). Therefore, in Study 2 we test another product category.
Third, in Study 1 the EDBP was applied to a manufacturer brand;
because retailers also might discount their private-label perish-
ables, we also examine the managerially relevant question of
whether consumer responses to EDBP differ when a retailer
implements the practice.
Moderating role of familiarity
Promotion literature offers conflicting results regarding the
long-term effects of a promotion. Several researchers suggest
that a price promotion, regardless of consumers’ choice at the
time it is offered, has negative long-term effects because it dam-
ages brand equity (Grewal et al. 1998). Conversely, perhaps sales
promotions increase brand preference (Pauwels, Hanssens, and
Siddarth 2002). DelVecchio, Henard, and Freling (2006),ina
meta-analysis of 51 studies, show that the long-term effects
of promotion for the brand can be either positive or negative,
depending on the characteristics of the promotion and the pro-
moted product.
Yet according to the pricing literature, as a market becomes
more familiar with alternative pricing practices such as price
discrimination, consumers’ negative perceptions of those prac-
tices decline (Wirtz and Kimes 2007). Customers are affected
by community norms regarding prices and pricing schemes, so
their perceptions of pricing schemes are likely to develop rela-
tive to community norms. Customers who are unfamiliar with a
pricing scheme, in turn, should be more likely to perceive it as
unfair and develop negative attitudes towards the company that
implemented it.
In turn, we postulate that psychological contract violation
perceptions, developed after an exposure to EDBP, decrease
when consumers are more familiar with this practice. Thus we
propose:
H4. Familiarity moderates the effect of EDBP on brand quality
image. The effects of EDBP are weaker for consumers who are
more familiar with this practice.
Method
We conducted Study 2 in two supermarkets in Ireland whose
parent company applies expiration date-based pricing to its
private-label meat category. Specifically, the chain applied a
price discount of 20–25% for minced-packaged-meat two days
before its expiration date; the retailer had been using this tactic
for three years at the time of our study. Store managers revealed
that the implementation involved placing a discount sticker on
the product without any additional communication (e.g., shelf
tag). Therefore, consumers who usually purchase meat from this
grocery retailer, even as their primary brand, might not be aware
of the practice, and we compared consumer perceptions of brand
quality across consumers aware of the practice and those who
were not. We conducted face-to-face interviews with consumers
of two representative grocery stores; the data collection lasted
for two weeks and led to a final sample of 403 shoppers.
A filter question confirmed if respondents had shopped in the
focal category. The measures of category-specific loyalty to the
retailer and expiration date risk were similar to those used in
Study 1. Two items from Grewal et al. (1998) served to mea-
sure store image perceptions, the dependent variable. Customers
also indicated if they were aware of the EDBP practice applied
by the store, which represented our measure of EDBP aware-
ness. Familiarity with EDBP used a five-point Likert scale item:
“Discounting perishables as the expiration date approaches is a
common practice for grocery retailers,” with “strongly agree”
and “strongly disagree” as endpoints.7We used a median split
7We conceptualize EDBP familiarity as consumer perceptions about how
familiar (i.e., commonly or generally known or seen) is the EDBP practice (Wirtz
and Kimes, 2007) rather than how much a consumer knows (i.e., consumer
expertise) about the EDBP practice, which is used more to describe the brand
familiarity concept (Alba and Hutchinson 1987; Park and Lessig 1981).
A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87 81
Table 4
Variable descriptions: Study 2.
EDBP awarenessa58%
Brand loyaltyb34%
Expiration date riskc4.1 (1.98)
EDBP familiarityc2.5 (1.2)
Store imagec3.4 (.88)
aPercentage of respondents who say that they are aware that the retailer applies
EDBP.
bPercentage of respondents who indicated the retailer’s private-label brand as
their primary brand.
cMean and standard deviation in parentheses, five-point scale, higher numbers
mean higher levels of the variable.
Fig. 5. Moderating effect of consumer familiarity: Study 2.
analysis to divide the sample into groups according to expira-
tion date risk, EDBP awareness and familiarity. The measures
appear in Appendix A.
Results
In total, 58% of the sample was aware of the EDBP practices,
and 35% indicated the retailer brand as their primary brand of
meat, as we detail in Table 4.
Our analysis of consumer responses to store image relied
ona2×2×2×2 ANOVA, with EDBP awareness, EDBP
familiarity, brand loyalty, and expiration date risk as the
between-subjects factors. The results revealed a significant
direct effect of brand loyalty (F1, 392 = 19.75, p< .05), but all
other direct effects were insignificant. The expiration date
risk (F1, 392 = 55.75, p< .05) and brand loyalty (F1, 392 = 32.75,
p< .05) measures interacted significantly with EDBP awareness.
The follow-up contrast indicated that the pattern of results for
expiration date risk and brand loyalty were consistent with that
from Study 1. Familiarity with EDBP also had a significant inter-
action effect with EDBP awareness (F1, 392 = 95.75, p< .05). As
we show in Fig. 5, EDBP awareness exerted a negative effect
among consumers less familiar with this practice (Maware = 2.7,
Mnonaware = 3.4, p<.05), but it was insignificant for consumers
who were familiar with EDBP (Maware = 3.4, Mnonaware = 3.35).
Thus, H4 is confirmed. We found no significant three- or four-
way interactions.
Study 2 provides additional empirical support for H1 and H2
by showing a consistent with Study 1 pattern of results regard-
ing the effect of expiration date risk and brand loyalty, although
EDBP was applied for another product category and for a pri-
vate label-brand. Additionally, Study 2 shows that the effects of
EDBP for the brand image become insignificant if consumers are
already familiar with this pricing practice. In summary, Study 1
and Study 2 identify conditions under which the potential neg-
ative effects of EDBP for brand image are mitigated. Actually,
these results provide managers with guidance on the ways that
EDBP should be applied so as to minimize negative effects
for the brand. We conducted Study 3 to investigate whether
the managerial practice of framing EDBP as a green market-
ing activity is another way to mitigate or even reverse the effect
of EDBP.
Study 3: EDBP framing: sales promotion vs. green
marketing
Previous research suggests that grocery retailers have an
option to frame EDBP as a cause-related marketing activity
(Barone, Norman, and Miyazaki 2007) by presenting it as an
alternative to throwing away products and therefore a means to
reduce environmental waste (Tsiros and Heilman 2005). With
Study 3, we investigate whether and how this EDBP framing
affects consumer evaluations of brand image.
Expiration date-based pricing framing
In developing their price promotions, managers make deci-
sions related not only to promotion depth but also to how to
frame the discount. Existing promotion research suggests that
framing affects consumers’ estimates of the promotion’s value,
purchase decisions, future purchase intentions, and price expec-
tations (DelVecchio, Krishnan, and Smith 2007). In the case
of EDBP, grocery retailers and perishable producers have two
main framing options: as a sales promotion practice that involves
a price discount for perishables (i.e., promotion frame) or as a
cause-related marketing (CRM) action that provides consumers
with the ability to participate actively in environment protection
by reducing waste (i.e., CRM frame). Although existing research
has investigated the effect of promotion framing on consumer
responses (DelVecchio, Krishnan, and Smith 2007), no research
considers a comparison between CRM versus promotion fram-
ing. To examine the psychological processes that relate to the
effects of EDBP framing on consumer perceptions, we draw on
our previous theoretical justifications, as well as on corporate
social responsibility (CSR) literature.
CSR associations and EDBP framing
Manufacturers and retailers have long participated in CRM
campaigns, such as when they make specified donations to
nonprofit partners if consumers perform a prescribed behav-
ior (e.g., purchase a company’s products (Folse, Niedrich, and
Grau 2010)). Consumers usually infer that altruistic motives
prompt firms to engage in CRM campaigns (Barone, Norman,
82 A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87
and Miyazaki 2007); existing literature thus suggests that the
main benefit of CRM for a brand is that it induces positive CSR
associations (Brown and Dacin 1997; Sen and Bhattacharya
2001). Such CSR associations constitute an element of overall
corporate associations, distinct from attribute-level information
about products, such that they can enhance product evaluations
through consumers’ overall evaluation of the company (Sen and
Bhattacharya 2001).
Previous studies have investigated whether CSR-related
activities, and their positive effects on CSR associations (Brown
and Dacin 1997), interact with corporate ability associations
related to elements of a firm’s expertise and competency to
influence consumer evaluations (Handelman and Arnold 1999).
When firms suffer from poor corporate ability perceptions,
CSR can significantly enhance consumer attitudes (Handelman
and Arnold 1999); positive CSR associations even can mit-
igate the effects of a product harm crisis (Klein and Dawar
2004). Furthermore, existing research has shown that inferred
motives are strongly related with the outcome of PCV percep-
tions (Robinson and Morrison 2000); while previous research
shows that consumer response to price discrimination is defined
by their inferred motives behind this practice (Campbell 1999).
As we showed in the preceding studies, under specific condi-
tions, EDBP induces negative associations regarding corporate
abilities by affecting consumer distrust. However, if EDBP is
framed as CRM, it should induce positive brand associations
involving CSR (Sen, Bhattacharya, and Korschun 2006). There-
fore, we postulate that positive CSR associations induced by
CRM framing function in two ways. First, positive inferred
motives—this practice is attributed to CSR-should mitigate the
negative signal of the EDBP tactic and thus decrease or elimi-
nate psychological contract violation perceptions (see Fig. 1).
Second, if PCV still exists, the positive halo effect of CSR
association may compensate for its negative effects (Klein and
Dawar 2004). In any case, positive CSR associations induced by
a CRM-framed EDBP should enhance product quality percep-
tions and mitigate PCV perceptions, creating an overall positive
(or at least less negative) effect of EDBP on brand quality image.
Thus, we propose:
H5. EDBP framing moderates the effect of EDBP on brand
quality image. The effects of EDBP (compared with regular
pricing) are insignificant or positive if EDBP is framed as a
cause-related marketing activity.
Method
To test this hypothesis empirically, we adopted a between-
subjects experimental design and manipulated EDBP framing
as a between-subjects factor. The site8and context of Study 3
were similar to those of Study 1, though we applied a three-
level manipulation of the pricing practice (regular pricing vs.
8A possible limitation of Study 3 is that it uses the same site with Study
and consumers had probably already gained familiarity with EDBP. In order to
address this, in Study 3 we have filtered consumers who have participated or
noticed EDBP during Study 1.
Fig. 6. Effect of EDBP framing: Study 3.
CRM-framed EDBP vs. promotion-framed EDBP). In the
regular pricing and promotion-framed EDBP conditions, the
treatments were the same as in Study 1. For the CRM-framed
EDBP condition, we used a shelf talker and package sticker
that informed consumers that EDBP was designed to help pro-
tect the environment by reducing waste. In the Appendix, we
recreate these tools. We applied each EDBP treatment to two
representative stores of the retailer for two weeks, and the data
collection relied on face-to-face interviews. The final sample
featured 603 consumers, 201 in each treatment. We measured
consumer perceptions of brand quality using the same scale as
in Study 1.
Results
We compared consumer assessments of brand image across
the three between-subjects experimental conditions (CRM-
framed EDBP vs. promotion-framed EDBP vs. regular).
Consistent with Study 1, consumers exposed to promotion-
framed EDBP expressed brand quality image perceptions similar
to those who were exposed to regular pricing (Mregular = 3.48,
Mpromotion = 3.41). According to the results in Fig. 6, EDBP
framing had a significant effect on brand quality. The
group exposed to the CRM-framed EDBP indicated signif-
icantly higher brand image perceptions (MCRM = 4.0) than
the promotion-framed EDBP (Mpromotion = 3.41; F1, 601 = 42.23,
p< .05) and regular pricing (Mregular = 3.48; F1, 601 = 35.21,
p< .05) groups, in support of H5.
Study 4: EDBP effects on psychological contract violation
Finally, to improve the internal validity of our results
and evaluate the suggested theoretical rationale behind con-
sumer responses to EDBP more directly, we conducted a lab
experiment allowing us to capture consumer thoughts after
their exposure to EDBP.9Thus, Study 4 has the purpose to
test whether consumers develop negative PCV-related thoughts
after an exposure to EDBP and more importantly whether the
9We thank an anonymous reviewer for this suggestion.
A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87 83
number of this type of thoughts differs according to the hypoth-
esized moderating variables.
To empirically test the theoretical explanation behind our
hypotheses, we collected data from 163 undergraduate and
postgraduate business students in a U.K University. Using the
findings from Study 3, we manipulated the EDBP framing
(promotion-framed vs. CRM-framed) between subjects. Partic-
ipants first received a scenario of a grocery-shopping trip that
involved the purchase of milk and then read the following intro-
duction: “During your grocery shopping, you are in front of the
milk shelf and you are considering purchasing milk. Then, you
realize that a milk brand provides you with the following two
options for the same package size.” The two options (for a hypo-
thetical brand of milk) were regularly priced milk with six days
before it expires and discounted milk that would expire in one
day. In contrast with Studies 1–3, we used a hypothetical prod-
uct brand in Study 4 to avoid any brand-related effects, which
might constitute a limitation of the other studies. However, con-
sistent with the other studies, we used a fixed 25% discount for
milk one day before its expiration date. The regular price level
was determined through a discussion with a milk manufacturer
as representative of the average milk price at the time of the
experiment. In the CRM-framed EDBP condition, we included
text that informed consumers that this promotional activity had
the purpose of protecting the environment by reducing waste,
similar to Study 3. We allocated respondents randomly to one
of the two experimental conditions. We provide examples of the
experimental stimuli in Appendix A.
After reading the scenario and the EDBP stimuli, participants
responded to an open-ended question that asked them to describe
their thoughts regarding the brand, in relation to this pricing
practice. We also assessed their perceived expiration date risk
for milk using the same scale as in Study 2 (see Appendix A).
We used a median split analysis to divide the sample to low
and high expiration date risk groups. We did not include brand
loyalty measures because we had used a hypothetical brand.10
Results
Two independent coders content analyzed the participants’
responses to the open-ended question. In the rare cases that
the coders disagreed, they resolved the conflict through joint
discussion. The responses were coded according to their polar-
ity (Noriega and Blair 2008) into the following categories: (1)
Negative/PCV-related, (2) Other Negative/non-PCV related, (3)
Positive, and (4) Neutral. We have provided coders as a guidance
10 Wehave also measured consumer familiarity with EDBP in order to compare
PCV thoughts between familiar and unfamiliar consumer as in Study 2. Results
show that the majority (80%) of respondents were highly familiar with EDBP
practice and therefore we did not include this variable in our analysis. This was
expected since EDBP is used extensively from grocery stores in UK. However,
consistently with Study 2 results, high familiarity can be an explanation for the
relatively high number of the total neutral thoughts expressed by respondents.
Yet, we were still able to find significant difference on the number of PCV-related
thoughts across experimental variables.
to identify PCV-related thoughts with a brief session explaining
the concept of PCV.
Overall, 26% of consumer responses were classified as
“PCV-related thoughts” and examples include expressions of
dishonesty associations with brand such as: “It makes you feel
like the use by date is not true” or “I was thinking that they are
trying to fraud me by selling me rubbish”, distrust feelings such
as: “I don’t trust the quality of the product if it is discounted” or
negative inferred motives: “...They try to get rid of their waste
by presenting it as promotion” or “They discount the item as
soon as its quality is no longer the same”. Coders classified 18%
of responses as “Other Negative Thoughts” of which examples
include purchase decision-related thoughts such as “I would not
purchase a product that I can’t consume it by tomorrow” or prod-
uct value-related “This discount is not enough for purchasing a
product expiring in a day”. It is important to note that the main
differences between this type of responses and the previous cat-
egory (PCV-related) is that the target of thought (Noriega and
Blair 2008) is more the product itself rather than the brand and
that they do not include inferred motives.11
On the other hand, 24% of the responses were classified as
“Positive”. Examples mainly include positive CSR-related attri-
butions (in the CRM-framed EDBP condition) such as: “This
promotion shows me that this company is interested in the envi-
ronment, in practice”, but also value-related thoughts: “It is a
very good opportunity to buy discounted milk; I am always
looking for discounted items when going for grocery”. Finally, a
part (32%) of consumer responses was classified as neutral such
as: “This is a common practice; I can’t say anything about the
brand”.
We have compared the number of PCV-related thoughts
across the following groups: EDBP framing: CRM vs. Promo-
tion, Expiration Date Risk: Low vs. High. As expected, the
number of such thoughts was greater (smaller) for consumers
who perceived lower (higher) expiration date risk (17% vs.
9%, χ2= 9.2, p< .05) and for the promotion- (CRM-) framed
EDBP (18% vs. 8%, χ2= 6.2, p< .05). The number of positive
thoughts did not differ significantly across high and low expi-
ration date risk but, we noticed significantly higher number of
“positive” thoughts in the CRM-framed EDBP condition than in
the promotion-framed EDBP condition (18% vs. 6%, χ2= 25.5,
p< .01). This is also consistent with our argumentation behind
H5 suggesting that framing EDBP as a green marketing activity
may be associated with positive inferred motives and CSR attri-
butions. The number of “Other negative thoughts” did not differ
significantly across experimental conditions.
Results of Study 4 show that consumers develop PCV-related
thoughts after their exposure to EDBP and the number of those
thoughts differ according to their expiration date risk, and the
framing of EDBP. Consequently, Study 4 shows that the PCV
framework can be a viable explanation for the effects of EDBP
on brand image perceptions.
11 Consistently with the conceptualization of PCV in the literature, inferred
motives are an integral part of PCV-related thoughts (Robinson and Morrison
2000).
84 A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87
Discussion
Our research focuses on the pervasive but largely unexplored
retail tactic of expiration date-based pricing and investigates how
consumers respond to it. Specifically, we focused on the effects
of EDBP on consumer perceptions of brand quality. Building
on social exchange theory (Blau 1964) and literature pertain-
ing to pricing and expiration dates, we propose that consumers’
expectations regarding perishables’ quality take the form of a
psychological contract, as expressed by their expiration date. We
introduce the concept of psychological contract violation (PCV)
and suggest that EDBP induces PCV-related perceptions. In so
doing, we propose a mechanism underlying consumer responses
to EDBP and develop hypotheses regarding the effects of EDBP
on brand quality image, which should vary according to mod-
erating conditions. Finally, we suggest that consumer distrust
mediates these effects.
To test our hypotheses and support our theoretical framework,
we conducted three field experiments and a lab experiment.
Overall, the results suggest that the effect of EDBP on brand
image varies and this variance can be explained by the under-
lying consumer perceptions of psychological contract violation.
With Study 1, we showed that the effect of EDBP is weaker
or insignificant when consumers perceive higher levels of risk
associated with perishables and are not loyal to the brand
that uses the EDBP. Although common sense suggests that
loyal consumers and consumers with lower risk perceptions
should be more reluctant to undergo a negative experience
with the brand, the PCV explanation suggests that in the case
of EDBP, the negative effect is more prominent for existing
rather than new consumers. That is, the effect depends on the
existence and nature of the psychological contract between
consumers and their brand. In addition, Study 1 revealed that
the effects of EDBP are mediated by consumers’ distrust.
Study 2 confirmed that as consumers become more famil-
iar with EDBP, its negative effects decline, which implies
insignificant long-term effects. With Study 3, we investigated
whether framing EDBP as a cause-related marketing activity
that reduces waste generates more positive consumer evalua-
tions. These results showed that a CRM-framed EDBP generates
more positive consumer evaluations than a promotion-framed
one.
Thus, EDBP has a negative effect on brand image only for
loyal consumers, when consumers perceive low risk related to
the expiration date, or if they are unfamiliar with this practice.
The effect of EDBP on brand image is insignificant among non-
loyal consumers, when consumers perceive high expiration date
risk, or if they are already familiar with it. Finally, we confirm
that EDBP can have a positive effect if framed as a CRM activity.
The findings thus give managers some recommendations (see
Table 5) regarding how to implement EDBP, and perhaps other
price discrimination practices, successfully. Although the con-
ventional wisdom suggests EDBP destroys brand image, our
results show that under specific conditions, it can provide a suc-
cessful waste reduction and revenue management practice with
no negative effects for brand image. In addition, the Study 2
results indicate that as consumers become increasingly famil-
iar with this practice, it stops having negative effects on brand
image. That is, as consumers accept the practice, they distin-
guish it from their brand image perceptions; in the long-term,
managers should focus on the positive aspects of EDBP, such as
lower prices. This pricing practice can be particularly successful
for categories with high expiration date risk, which are the same
categories that generate the most waste for retailers, because
consumers tend to avoid purchasing products near their expira-
tion date. If they were to apply EDBP to these high-risk products,
retailers could reduce waste significantly without harming their
brand image. Finally, framing EDBP as a green marketing prac-
tice generates positive brand image perceptions, as we showed
empirically in Study 3.
Additional research should address some limitations of our
investigation and build on its findings. Although brand image
is a significant outcome of consumer responses to a pricing
tactic, purchase intentions or decisions offer other important
variables to be examined. It would be of particular importance
to study what drives consumers’ decision between a fresher
versus a cheaper perishable product. Furthermore, the long-term
effect of this pricing practice on future price expectation would
also be important to be examined (Tsiros and Hardesty 2010).
For example, the promotion literature suggests that this pricing
practice may be harmful in the long-term because it will signif-
icantly lower price expectations and therefore consumers will
constantly seek the cheaper version of perishables (DelVecchio,
Henard, and Freling 2006). Although we examined two
Table 5
Result summary and managerial implications.
Hypotheses Factors/variables Findings Implications
H1 Expiration date risk For consumers with high expiration date
risk, exposure to EDBP has an insignificant
effect on brand image.
EDBP should be targeted to consumer segments, product
categories, or both that involve higher expiration date risk.
H2 Brand loyalty Exposure to EDBP has an insignificant effect
for nonloyal consumers.
EDBP may be used to attract new consumers and as a market share
expansion strategy.
H3 Distrust The effects of EDBP on brand image are
mediated by distrust.
Managers should focus on building and establishing trust between
the brand and consumers before applying EDBP.
H4 Familiarity The negative effects of EDBP on brand
quality perceptions are weaker for consumers
who are already familiar with this practice.
Managers could introduce an EDBP practice more easily if this
practice were already applied by competitors or in other similar
product categories.
H5 EDBP framing Framing EDBP as a CRM activity leads to
positive effects.
When targeting existing consumers, EDBP should be applied to
high risk categories and framed as a green marketing activity.
A. Theotokis et al. / Journal of Retailing 88 (1, 2012) 72–87 85
different product categories, it would be useful to test for differ-
ences across several other perishable product categories such as
fresh fruit and vegetables. Furthermore, it would be interesting
to examine how existing trust to the perishables’ seller may mod-
erate the effect of EDBP. Moreover, in the experimental design
of Study 3, the CRM concept was tied with the pricing practice,
in order to investigate a managerially relevant way suggested by
previous research (Tsiros and Heilman 2005) to reduce possi-
ble negative effects of EDBP. It is possible however, that any
type of CSR appeal may have a similar effect, according to rel-
evant literature (Klein and Dawar 2004). Future research could
investigate more holistically the role of CSR on EDBP.12 In con-
trast with most research into consumer–retailer relationships that
focuses on trust, we propose distrust as an alternative and con-
ceptually different construct for modeling consumer responses.
Further research might apply it in various contexts. Finally, the
PCV approach could provide a strong theoretical framework for
studying consumer responses to other marketing actions in envi-
ronments that may be characterized by any kind of contractual
agreements between consumers and a brand.
Acknowledgments
This work has been partly funded by the International Com-
merce Institute (ICI)—Unilever Research Grant. The authors
would like to thank ICI and Unilever Europe for their financial
support, as well as the Vivartia SA and the Greek Retailer Metro
SA for their support to the field experiments.
Appendix A.
Study 1. Measures
Expiration Date Risk (Tsiros and Heilman 2005)
How likely is it that milk will not meet your expectations as it approaches its
expiration date?
How likely is it that the quality of milk gets worse as the product approaches
its expiration date?
Brand Loyalty (Sloot, Verhoef, and Franses 2005)
Indicate your primary milk brand.
Distrust (Cho 2006)
[Brand name] is not trustworthy.
[Brand name] will exploit customers’ vulnerability given the chance.
[Brand name] will engage in damaging and harmful behavior to customers to
pursue its own interest.
Brand Quality Image (Grewal et al. 1998; Tsiros and Hardesty 2010)
My image for [brand name] is positive.
The [brand name] appears to be of high quality.
Study 2. Additional Measures
EDBP Awareness
12 We thank an anonymous reviewer for this suggestion.
Have you noticed the practice of [retailer name] to discount meat as
approaching expiration date?
EDBP Familiarity
Discounting perishables as the expiration date approaches is a common
practice for grocery retailers.
Store Image (Grewal et al. 1998; Tsiros and Hardesty 2010)
My image of the [store name] is positive.
[Store name] carries high-quality merchandise.
Study 3. Field Experiment Stimuli Material and CRM-Framed EDBP
Main Message: “Help the Environment by Paying Less”
Text: “By selecting to purchase the [Brand name] Milk with the same [Brand
name] quality seal but with less days to expire, you do more than just
purchasing your favorite milk cheaper (D-0.30 per 1l and D-0.45 per 2 l):
You also contribute from your side to reducing product waste and, therefore,
to lower environmental burden caused by packaging material.
Study 4. Experimental Stimuli Example for Promotion-Framed EDBP
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