We　consider　the　price　promotion　in　a　supply　chain　comprising　one　manufacturer　and　one　retailer,　who　take　into　account　the　reference　price　effects　of　consumers.　The　problem　is　analyzed　as　a　manufacturer-lead　Stackelberg　game.　The　results　indicate　that　reference　price　effects　could　mitigate　＂double　marginalization＂　effects,　and　improve　the　channel　efficiency.　We　also　show　that　the　optimal　price　promotion　benefits　the　manufacturer,　retailer　and　consumers　in　consumer　promotion　model.　Furthermore,　we　provide　the　conditions　under　which　the　retailer　has　an　interest　in　offering　price　promotion　to　consumers.　Finally,　we　employ　numerical　analysis　to　demonstrate　more　managerial　insights.　©　2015　Elsevier　Ltd.