When do price discounts become attractive? A study comparing discount strategies on consumer perceptions
Asia Pacific Journal of Marketing and Logistics
ISSN: 1355-5855
Article publication date: 22 August 2022
Issue publication date: 26 May 2023
Abstract
Purpose
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/approach
Analysis 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).
Findings
Analysis 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/value
GPD 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.
Keywords
Acknowledgements
This research is supported by the Taiwan’s Ministry of Science and Technology under Grant MOST 108-2410-H-110-062.
Citation
Tan, W.K. (2023), "When do price discounts become attractive? A study comparing discount strategies on consumer perceptions", Asia Pacific Journal of Marketing and Logistics, Vol. 35 No. 6, pp. 1404-1424. https://doi.org/10.1108/APJML-06-2021-0456
Publisher
:Emerald Publishing Limited
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