Science Arena Publications

International journal of Business Management

ISSN: 2520-5943
Available online at www.sciarena.com
2018, Vol, 3 (4): 50-58

Sales Promotion and Price Discount Effect on

Consumer Purchase Intention with the Moderating
Role of Social Media in Pakistan
Anam Bhatti
Ph.D. Scholar, College of Business, University Utara Malaysia.
Abstract: The current study was done to identify the effect of the sales promotion, price discount, and the
social media on the consumers’ purchase intention. Also, the moderating effect of the social media on the
relationship between the sales’ promotion and the consumers’ purchase intention was investigated. The
students of Gujranwala university in Pakistan were the participants of this study. The data were collected
using the simple random sampling and through the questionnaire technique. Two hundred fifty
questionnaires were distributed among the students. The confirmatory factor analysis and the structural
equation model technique was used to analyze the data. The results indicated that the sales’ promotion and
the social media had a remarkable and positive effect on the consumers’ purchase intention. Contrarily,
discount had no effect on the consumers’ purchase intention. In addition, social media moderated the
relationship between the sales’ promotion and the consumers’ purchase intention. In most of the research
studies, the moderating effect of the social media has been ignored in the prior studies, and the current study
has filled this gap. The present study had some limitations, and at the end of the paper, further suggestions
have also been provided.

Keywords: Sales Promotion, Price Discount, Social Media, Consumer Purchase Intention

INTRODUCTION

The internet has changed the human life by its convenience and extra benefits, through the internet we have
been connected with each other like a family. The internet has also made our life much easier and faster. The
purchase intention is the intention of an individual to buy a product. In modern era, it is difficult to grab the
customers’ attentions, in this era, marketing does not just produce a product and set a reasonable price for it,
in present era, the customers have become much important; being loyal to them, attracting them and
retaining them are very necessary for any company to maintain its position and name in the current
competitive market. Purchase intention is a plan to buy a specific product in future (Ramayah et al., 2010).
Consumer purchase intention has been an important indicator in the daily life (Arif et al., 2017); additionally,
it is the consumers’ likelihood to buy a product, so the higher likelihood means they have higher intention to
purchase, and less likelihood means the low purchase intention (Schiffman et al., 2010). There has been a
need to study consumer purchase intention in future studies as Bhatti, Saad, & Gbadebo (2018) declared.
According to Pt (2016, December 5), advertising agency Zenith Optimedia, owned by France’s Publicis,
predicted that the world’s advertising on the social media would account for 20% of all the internet
advertising in 2019, and it was expected to hit $50 billion. Nowadays, social media has been consisted of only
Int. j. bus. manag. (Seiersberg)., 2018, Vol, 3 (4): 50-58

1% lesser than the newspaper ads and it has been expected to overtake the newspaper ads in 2020. According
to AURORA (2017, September 7), the total population of Pakistan was 198.8 million, in which 35.1million
were internet users and 31 million were active on the social media, among them 28 million were active on the
social media through their mobile, but only 1% people were involved in the constructive activities. Educated,
as well as uneducated people waste their time on some useless and immoral activities. Global businesses have
had the widespread aim of strengthening their brand images (Nasar et al., 2012). However, the cost of
attracting new customers is more than retaining the existing customers so, companies use different promotion
tools to retain their customers loyal to them. There have been different ways of increasing sales by promotions
like discounts, coupons, one get one free, free trail events by promoting different sources of use for the
promotion like newspaper, magazines, TV ads, billboards, Blogs, websites; and one of the most effective
sources to grab youngster is social media. Promotion has been mostly used to enhance sales and profits.
Promotion grabs the consumers’ intentions, and motivates them to purchase without plan, it has been
reported that more than 60% of purchases have been unplanned in organized retail stores because of the
promotion. Sales promotion enhances company’s profits in a specific time, and social media plays a significant
role in sales’ promotion and consumers’ purchase intention.
Literature Review

Sales’ promotion and consumers’ purchase intention

Promotion is a key component and a valuable tool for marketers, and it has been widely used to get a
competitive edge and increase the sales and attract the consumers’ intention. Promotions influence the
consumers’ purchase quantity and reduce the time for decision-making. Sales’ promotion is a short-term
encouraging strategy to increase sales or purchase of brands (Kotler, 2000). Moreover, it is a strategy which
demands short time to increase profits (Banerjee, 2009). This strategy has the ability to attract and retain the
customers and build a strong link with the sellers (Oly Ndubisi & Tung Moi, 2006). It also motivates the staff
to play a fair role in selling (Brassington & Pettitt, 2006). Furthermore, sales’ promotion includes three main
strategies namely, push, pull and the combination of pull and push. Push means the product is pushed from
distributors to the consumer by different promotions like discounts, personal selling, buy back guarantee, free
trail, allowances, and contests; and pull means the consumer pulls the product from the distributors through
different ways like samples, games, coupons, premiums, loyalty rebates and cash refund (Dolak, 2010). Sales’
promotion plays an important and significant role in the consumers’ purchase intention and their making a
decision for purchasing a specific product (Neha & Manoj, 2013). Prior studies have shown that there has
been a mixed relationship between the sales’ promotion and the consumers’ purchase intention (Neha &
Manoj, 2013; Nochai & Nochai, 2011). So, there has been a need to introduce another variable between the
sales’ promotion and the consumers’ purchase intention to strengthen this relation more and more; therefore,
social media has been used as a moderator in this relation.
H1: Sales’ promotion has a significantly positive influence on the consumers’ purchase intention
H2: Social media significantly moderates the relationship between the sales’ promotion and the consumers’
purchase intention.
Price discount and the consumers’ purchase intentions
Price is a very important factor to influence and attract the consumers’ consideration and intentions to
purchase a product. Discounted price means not only the reduced price, it also means to get the same services
by differentiating price for the same product; it is a deduction of specific money from the total price for the
short time period to enhance the sales and profits of the consumers. Price discount has a great influence on
the high price products, and affects the consumers, and increases the value of the products (Chen et al., 2012).
Research has proven that price affects on the consumers’ purchase intention (Alford & Biswas, 2002; Biswas
et al., 2002; Jiang & Rosenbloom, 2005; Tarkiainen & Sundqvist, 2005). Moreover, price discount promotion

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enhances the product’s value by attracting the consumers by offering discounted price (Lichtenstein et al.,
1990; Zeithaml, 1988). Furthermore, price discount influences the consumers’ purchase intentions, and it also
affects buying quantity, that is, if the price discount is offered on the same product, the customers buy more of
that product. Price discount has a significant positive effect on the consumers’ purchase intention (Rizwan et
al., 2013).
H3: Price discount has a significant positive influence on the consumers’ purchase intention.
Social media’s effects and the consumers’ purchase intention
Social media plays an important role in daily life (Arif et al., 2017; Bhatti, Maryam, & Arif, 2017). Moreover,
social media is an important tool for today market, and it makes a close connection between the customers
and companies (Bhatti, Maraim, & Arif, 2017). Social media affects on the consumers’ intention to purchase,
and approximately 88% of marketers use social media to promote their business (Smith, 2011). Social media
gives an opportunity to people as well as companies to interact with each other (Bhatti et al., 2017).
Furthermore, research has shown that the world’s largest source of promotion is social media including
Facebook, Google, other websites (Duffett, 2015). According to AURORA (2017, May 24), social media
increases the revenues continuously. Google was the 1st rank in Pakistan with Rs. 1000 million, and
Facebook was the second rank with 700 million. Some of the studies have shown that there has been a
significant positive relationship between the social media marketing and the consumers’ purchase intentions
(Bilal, Ahmed, & Shehzad, 2014; Husnain & Toor, 2017; Saher et al., 2016) (See Figure 1).
H4: Social media significantly and positively influences on the consumers’ purchase intentions.

Figure 1. Theoretical Framework

Research Methodology
The aim of this study was to examine the influence of the sales’ promotion and price discount on the
consumers’ purchase intention with the moderating role of the social media. Quantitative approach was used
in this study, and the data were collected by using random sampling from the students of the universities in
Gujranwala Pakistan. The suitable sample size range for a good research must be 30 to 500 (Roscoe, 1975). In
the current research, two hundred fifty (250) questionnaires were distributed among the students in
Gujranwala universities. The data were collected using the simple random sampling technique. To collect
the data from the respondents, a questionnaire which was adopted from the various studies, was used. The
price discount was consisted of three items and was adopted from (Yoo et al., 2000). Sales’ promotion was
consisted of ten items and was adopted from (Festus, 2016). Social media consisted of twelve items which
were adopted from (Parveen etr al., 2016). Furthermore, the consumers’ purchase intention consisted of three
items which were adopted from (Thananuraksakul, 2007). The questionnaires after being adopted, were
distributed among the students including the Likert scale ranging from 5 (strongly agree) to 1 (strongly
disagree).
Findings
Demographic profile
From 250 students that filled the questionnaire, 116 (46.4%) were males and the remaining 134 (53.6%) were
females. Regarding the age group of the students in this study, the majority of the respondents belonged to up

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to 25 years group including 211 (84.4%) students, and the remaining respondents belonged to the age group
between 26 and 45 years old. Moreover, in the study sample, most of the respondents were the master degree
holders including 177 (70.8%), 17.2% of the respondents were bachelor degree holders, 10% of the respondents
were Ph.D. degree holders, and 2% of the respondents were of the other degrees which were not specified.
Reliability Test
The reliability test was conducted to see that the data was reliable for further analysis or not. To calculate the
reliability of the data, Cronbach’s alpha was measured for the items of the variables. According to Nunnally
(1978), the standardized value of Cronbach’s alpha should be at least 0.7. Table 1 shows Cronbach’s alpha of
the variables.
Table 1: Reliability Results
Constructs Items Cronbach’s Alpha
Sales Promotion 10 0.899
Price Discount 03 0.751
Social Media 12 0.905
Consumer Purchase Intention 03 0.839

Table 1 shows that Cronbach’s alpha values of the sales’ promotion, price discount, social media, and
consumers’ purchase intention were greater than the standard value that is 0.70 as suggested (Nunnally,
1978). Therefore, the reliability requirement was fulfilled, and the data was found to be reliable for further
analysis.
Normality Test
After reliability test, it was time to see whether the data was normal or not, and for this purpose, the
normality test was conducted. To test the normality of the data, the Skewness and Kurtosis concept that was
presented by (Meyers et al., 2016), was followed. According to Meyers et al. (2016), the skewness value must
be within ± 1.00 and the value of kurtosis must be within ± 3.0. In the current research, the findings revealed
that the data met the requirements as mentioned above, and the data was normal for the further analysis.
Confirmatory Factor Analysis
To calculate the convergent validity of the items of the variables, three items including factor loading, average
variance extract, and finally the composite reliability (CR) were assessed. Factor loading was calculated to
find out the confirmatory factor analysis (CFA) to estimate the measurement model of the study. CFA
technique was used to refine the variables’ items that were used in the questionnaire to access the validity of
the constructs. According to Hair, Ringle, and Sarstedt (2011), the validity of the items is convergent when
the factor loadings of the items are at least 0.50.
In the current research, sales’ promotion factor’s loading was within the range of 0.649 to 0.850. Moreover,
the price discount factor’s loading was within the range of 0.826 to 0.913. Furthermore, the minimum factor
loading of the social media was 0.577, and the maximum factor loading was 0.806. Meanwhile, the range of
the factor loading for the consumers’ purchase intention was 0.768 to 0.859. Hence, the requirement of the
factor loading met the variables’ items. AVE values of the sales’ promotion, price discount, social media, and
consumers’ purchase intention were 0.563, 0.765, 0.505, and 0.678; respectively. Hence, all the values of AVE
of the variables met the criteria, since the values were greater than 0.50. The composite reliability of the sales
promotion, price discount, social media, and consumer purchase intention were 0.928, 0.907, 0.924, and 0.863;
respectively. Hence, all the values of CR met the requirement, and all the values were greater than 0.80.
Descriptive & Correlation Analysis
Table 2 shows the descriptive as well as the correlation analysis of the variables that were used in this study.
The findings elucidated that all the variables were significantly correlated with each other. The correlation
table shows that the sales’ promotion was highly and significantly correlated with the consumers’ purchase
intention (r=.685, p<.01).

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Table 2. Descriptive & correlations analysis

Variable Mean SD SP PD SM CPI
SP 3.86 .778 1
PD 4.24 .823 .387** 1
SM 3.90 .695 .607** .531** 1
CPI 3.99 .789 .685** .399** .655** 1
Note: **P<.01; SD= standard deviation; SP= sales promotion; PD= price
discount; SM= social media; CPI= consumer purchase intention

Hypothesis Testing
The sales’ promotion, price discount, social media, and the consumers’ purchase intention were taken into
consideration.
Structure Equation Modeling (Direct Effects)
Table 3 shows that the sales’ promotion was significantly and positively related to the consumers’ purchase
intention (β= 0.459; p<.05) and the first hypothesis was supported. Meanwhile, the findings elucidated that
the price discount had an insignificant influence on the consumers’ purchase intention (β= 0.029; p>.05) and
the third hypothesis was not supported. Furthermore, social media had a significant and positive influence on
the consumers’ purchase intention (β= 0.413; p<.05) and the fourth hypothesis was supported.

Table 3. Standardized estimates of the direct effects

An indication of relationship of the constructs Standardize estimate S.E C.R P-value Results
SP -------> CPI 0.459 0.054 8.455 .000 Significant
PD -------> CPI 0.029 0.048 0.604 .546 Not significant
SM -------> CPI 0.413 0.066 6.258 .000 Significant

Testing the moderator hypothesis and results

In the section above, the direct relationship between the sales promotion, price discount, social media, and
consumer purchase intention was discussed. In this section, the moderating role of the social media between
the sales’ promotion and the consumers’ purchase intention was discussed. The moderation effect of the
moderating variable on the interaction between the independent and dependent variables, should be
measured (Holmbeck, 1997), therefore, to test the moderation hypothesis, a separate model was developed, in
which the moderating variable was used between the independent and dependent variables to test the impact
of the standardized moderating score. In this study, SmartPLS 3.0 was used to test the moderation
hypotheses, and throughout this process, the consumers’ purchase intention was expressed in the sales’
promotion, the social media served as the moderating variable. Moreover, the interaction term multiplied the
scores that were obtained from the sales’ promotion and social media. The standardized values of these
constructs were used as suggested by (Aiken et al., 1991) to avoid the problem of Multicollinearity. By doing
this process, the significant correlation between the constructs and the interaction term did not make any
kind of problem in testing the moderating variable (Bahar Ozdogan & Hakan Altintas, 2010).
Moderator: Social media
In this study, the moderating influence of the social media was tested considering the relationship between
the sales’ promotion and the consumers’ purchase intention. Table 4 elaborates the findings of the social
media’s effects on the relationship between the sales’ promotion and the consumers’ purchase intention. In
the SmartPLS 3.0, during the structural equation, the modeling analysis of the moderation effect existed
when the t-value of the interaction effect equaled to or was more than 1.96, or the p-value was less than 0.05
(Hair et al., 2011). To test the moderation effect of the social media, all the variables including (the
standardized sales’ promotion), the moderating variable (standardized social media), and the interaction term
(sales promotion standardized score x social media standardized score) were regressed on the consumers’
purchase intention. To confirm the moderating hypothesis that the moderation between the independent and

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dependent variables exists or not, all the effects such as sales promotion on the consumers’ purchase
intention, social media on the consumers’ purchase intention, and sales promotion x social media (interaction
term) on the consumers’ purchase intention were specified.
Table 4. Regression
Hypotheses Model Constructs Estimate S.E P-value Results
SP ----> CPI 0.235 0.059 0.001
H2 SM -----> CPI 0.132 0.047 0.000 Supported
SP*SM (interaction) ----> CPI 0.149 0.051 0.003

Table 4 shows that the sales’ promotion (SP) had a significant and positive influence on the consumers’
purchase intention with (β= 0.235; p<0.05), and the social media had a significant and positive influence on
the consumers’ purchase intention (β= 0.132; p<0.05). Meanwhile, there was a significant and positive
influence of the interaction term on the consumers’ purchase intention (β= 0.149; p<0.05). Hence, the second
hypothesis was supported.

Discussion

The objective of current research was to examine the effect of the sales’ promotion and price discount on the
consumers’ purchase intention. Moreover, the purpose of the current research was to determine the
moderating effect of the social media on the relationship between the sales’ promotion and the consumers’
purchase intention. The findings elucidated that the sales’ promotion had the significant and positive
influence on the consumers’ purchase intention, and H1 was supported. The findings were consistent with the
findings of (Neha & Manoj, 2013). Moreover, the findings revealed that the price discount had an insignificant
effect on the consumers’ purchase intention, and H3 was not supported. The findings were consistent with the
work of (Mir, 2012). Meanwhile, the social media had a significant and positive influence on the consumers’
purchase intention, and H4 was supported. The results were consistent with the results of (Bilal et al., 2014;
Husnain & Toor, 2017). Furthermore, social media moderated the relationship between the sales’ promotion
and the consumers’ purchase intention, and H2 was supported.
Limitations and Recommendations
The current study covered a lot but still, there were some limitations in it, that must be considered in further
studies. First, the current study covered only Gujranwala university students and the results of the current
study were not generalizable to the other cities. Second, the sample size of the current study was 250
students, and in the future research studies, the sample size can be enhanced in order to get better results.
Third, due to the time constraints in the current study only two independent variables were used, and
researchers can increase the independent variables in future studies. However, other variables like the
government’s role, psychological factors, social factors, culture, brand equity, and the electronic word of mouth
can be examined in the future studies. In the current study, the focus was only on the consumers’ purchase
intention, and due to the changes in purchasing trends caused by the modern technology, in future studies,
the online shopping behavior must be considered. Future studies should be conducted in both developing
countries and developed countries on the consumers’ purchase intention and online shopping behavior.
Conclusion
The current research was conducted to determine the influence of the sales’ promotion and the price discount
on the consumers’ purchase intention in Pakistan. This research contributed to the literature of the sales’
promotion, price discount, social media, and the consumers’ purchase intention. The current study overcame
some issues such as the sales’ promotion and the social media that had an influence on the consumers’
purchase intention. The major objective of the current research was to test the hypotheses and provide the
support on the relationship between the sales’ promotion, price discount, and social media on the consumers’

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purchase intention. The findings revealed that the sales promotion and the social media had an influence on
the consumers’ purchase intention. However, discount had no effect on the consumers’ purchase intention.
The findings elucidated that the social media moderated the relationship between the sales promotion and the
consumers’ purchase intention.
Significant Statements
This research contributed to the literature on the sales promotion, price discount, social media, and the
consumers’ purchase intention. In Pakistan, the consumers’ purchase intention has been an ignored area, and
the current research filled this gap to work on the consumers’ purchase intention along with some indicators.
This research provided benefits to the academicians and retailers.

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