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Amount off versus percentage off—when does it matter?

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  • González, Eva M.
  • Esteva, Eduardo
  • Roggeveen, Anne L.
  • Grewal, Dhruv

Abstract

This research explores the impact of discount framing on consumer perceptions of value and purchase intentions. An amount off discount frame results in higher perceptions of value and purchase intentions for higher-priced products (priced over $100). Three studies consistently support this prediction. Experiment 1 examines the interactive effects of amount off versus percentage off deals as a function of higher versus lower-priced products. For a higher-priced product, consumers prefer the offer more in terms of both value and purchase intentions when the discount is presented as amount off rather than the percentage off. For a lower-priced product (less than $100), the results, though not statistically significant, indicate a reverse pattern. Experiment 2 demonstrates that the result (amount off is better than percentage off) generalizes across higher price levels. Finally, Experiment 3 affirms that the result (amount off is better than percentage off for higher-priced products) generalizes across discount levels.

Suggested Citation

  • González, Eva M. & Esteva, Eduardo & Roggeveen, Anne L. & Grewal, Dhruv, 2016. "Amount off versus percentage off—when does it matter?," Journal of Business Research, Elsevier, vol. 69(3), pages 1022-1027.
    • Handle: RePEc:eee:jbrese:v:69:y:2016:i:3:p:1022-1027
    DOI: 10.1016/j.jbusres.2015.08.014
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    References listed on IDEAS

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    1. Grewal, Dhruv & Marmorstein, Howard & Sharma, Arun, 1996. "Communicating Price Information through Semantic Cues: The Moderating Effects of Situation and Discount Size," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 23(2), pages 148-155, September.
    2. Puccinelli, Nancy M. & Chandrashekaran, Rajesh & Grewal, Dhruv & Suri, Rajneesh, 2013. "Are Men Seduced by Red? The Effect of Red Versus Black Prices on Price Perceptions," Journal of Retailing, Elsevier, vol. 89(2), pages 115-125.
    3. Grewal, Dhruv & Roggeveen, Anne L. & Lindsey-Mullikin, Joan, 2014. "The Contingent Effects of Semantic Price Cues," Journal of Retailing, Elsevier, vol. 90(2), pages 198-205.
    4. Janiszewski, Chris & Lichtenstein, Donald R, 1999. "A Range Theory Account of Price Perception," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 25(4), pages 353-368, March.
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