The Greater the Hierarchy, the Less Prone to Coupons

Power distance belief (PDB) indicates the extent to which individuals accept and endorse inequality and hierarchy (Hofstede 2001). In the present research, we examine coupon proneness as a novel consequence of PDB. Coupon proneness refers to the propensity to use coupons or to positively respond to a purchase offer because of a coupon (Lichtenstein, Netemeyer, and Burton 1990). We propose that quality sensitivity is a key mechanism underlying the effect of PDB on coupon proneness. People high (vs. low) in PDB are more likely to be quality sensitive. First, high (vs. low) PDB perceive a hierarchy within society (Hofstede 2001) and more sensitive to status (Kim and Zhang 2014), which is closely associated with quality (Dawar and Parker 1994). Second, those high (vs. low) in PDB are less price sensitive (Lee and Lalwani 2017), which implies that they may be more concerned about quality over price. As a result, they are willing to pay top dollar for higher quality (Lalwani and Forcum 2016). Third, collectivists (high in PDB) are more risk-averse than individualists (low in PDB) in the social domain and may care about guaranteed brands. Individuals high (vs. low) in PDB have a higher bar for quality, and thus they may be likely cues such as price (Lalwani and Forcum 2016), celebrities (Winterich et al. 2018), store name (Lee and Shavitt 2006), or brand name to judge the quality of the brand. Since a coupon means a price cut or lower price, high (vs. low) PDB will judge a brand that offers a coupon with lower quality. Second, high PDB has also been associated with a need for closure (Lee and Lalwani 2018), which has been associated with the use of heuristics (Kruglanski 2004). High (vs. low) PDB may be more likely to use the heuristic that coupons indicate low quality. Third, repeated promotions, including coupons, damage brand equity (Yoo, Donthu, and Lee 2000). Thus, coupons may be associated with the belief that brands that offer coupons are of lower quality. Hypothesis 1 PDB is negatively associated with coupon proneness. Hypothesis 2 The relationship between PDB and coupon proneness is serially mediated by quality sensitivity and the coupons = low quality lay belief. Experiences are known to be greater in perceived quality variance than material purchases due to their heterogeneity and intangibility (Lovelock and Gummersson 2004). Hypothesis 3 When evaluating experiential (vs. material) purchases, the tendency of low PDB individuals to use coupons will sign