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When do price discounts become attractive? A study comparing discount strategies on consumer perceptions

When do price discounts become attractive? A study comparing discount strategies on consumer... While regular price discount (RPD) promotions remain popular, marketers have also introduced gambled price discounts (GPDs) in recent years. There is a need to understand the performance and limitation of the relatively novel GPD, because the importance of pricing and the surprise element inherent in GPD could cause the promotions to backfire when inappropriately applied. This study compared the performance of GPD and RPD via consumers' perception of their attractiveness through quality cues of product types (experience and search goods) and word-of-mouth (WOM) content (affective and cognitive).Design/methodology/approachAnalysis of variance (ANOVA) was applied on a 2 (product type: experience goods [hotel rooms] vs. search goods [printers]) × 2 (word-of-mouth type: affective vs. cognitive) × 2 (price promotion type: GPD vs. RPD) between-subjects scenario experimental design (resulting in eight conditions).FindingsAnalysis of the 600 returns revealed that RPD does well for both search and experience goods, but GPD is more attractive for the marketing of experience goods. GPD works better with cognitive than with affective WOM.Originality/valueGPD is a relatively new domain in marketing research. This study contributes to GPD literature and behavioral pricing literature. The study also adds to a better understanding of the dynamics, usefulness and limitations of GPD by considering the roles played by surprise element inherent in GPD and comparing it with RPD. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia Pacific Journal of Marketing and Logistics Emerald Publishing

When do price discounts become attractive? A study comparing discount strategies on consumer perceptions

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References (94)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1355-5855
DOI
10.1108/apjml-06-2021-0456
Publisher site
See Article on Publisher Site

Abstract

While regular price discount (RPD) promotions remain popular, marketers have also introduced gambled price discounts (GPDs) in recent years. There is a need to understand the performance and limitation of the relatively novel GPD, because the importance of pricing and the surprise element inherent in GPD could cause the promotions to backfire when inappropriately applied. This study compared the performance of GPD and RPD via consumers' perception of their attractiveness through quality cues of product types (experience and search goods) and word-of-mouth (WOM) content (affective and cognitive).Design/methodology/approachAnalysis of variance (ANOVA) was applied on a 2 (product type: experience goods [hotel rooms] vs. search goods [printers]) × 2 (word-of-mouth type: affective vs. cognitive) × 2 (price promotion type: GPD vs. RPD) between-subjects scenario experimental design (resulting in eight conditions).FindingsAnalysis of the 600 returns revealed that RPD does well for both search and experience goods, but GPD is more attractive for the marketing of experience goods. GPD works better with cognitive than with affective WOM.Originality/valueGPD is a relatively new domain in marketing research. This study contributes to GPD literature and behavioral pricing literature. The study also adds to a better understanding of the dynamics, usefulness and limitations of GPD by considering the roles played by surprise element inherent in GPD and comparing it with RPD.

Journal

Asia Pacific Journal of Marketing and Logistics – Emerald Publishing

Published: May 26, 2023

Keywords: Experience-search goods; Affective-cognitive word-of-mouth; Gambled price discount; Regular price discount

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