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The Effects of Discount Location and Frame on Consumers’ Price Estimates

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  • DelVecchio, Devon
  • Lakshmanan, Arun
  • Krishnan, H. Shanker

Abstract

A discount may be defined by the location in which, and frame by which, it is communicated. Discount framing, particularly the differences between cents-off and percentage-off discounts, has been widely studied. Discount location (e.g., proximate to or distal from regular price info) has received considerably less attention. We employ the proximity-compatibility principle and tenets of human memory to demonstrate that discount framing (cents-off, percentage-off, and revised price) and discount location (proximal, distal) interact to differentially affect both the immediate value and the persistence of consumers’ price estimates. The implications of these results for retailers and manufacturers are highlighted in the discussion.

Suggested Citation

  • DelVecchio, Devon & Lakshmanan, Arun & Krishnan, H. Shanker, 2009. "The Effects of Discount Location and Frame on Consumers’ Price Estimates," Journal of Retailing, Elsevier, vol. 85(3), pages 336-346.
    • Handle: RePEc:eee:jouret:v:85:y:2009:i:3:p:336-346
    DOI: 10.1016/j.jretai.2009.05.010
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    2. Ho, Edward & Kowatsch, Tobias & Ilic, Alexander, 2014. "The Sales Velocity Effect on Retailing," Journal of Interactive Marketing, Elsevier, vol. 28(4), pages 237-256.
    3. Wei, Zhiyong & Dou, Wenyu & Jiang, Qingyun & Gu, Chenyan, 2021. "Influence of incentive frames on offline-to-online interaction of outdoor advertising," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    4. Büyükdağ, Naci & Soysal, Ayşe Nur & Ki̇tapci, Olgun, 2020. "The effect of specific discount pattern in terms of price promotions on perceived price attractiveness and purchase intention: An experimental research," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    5. Mead, James A. & Richerson, Rob & Li, Wenjing, 2020. "Dynamic Right-Slanted Fonts Increase the Effectiveness of Promotional Retail Advertising," Journal of Retailing, Elsevier, vol. 96(2), pages 282-296.
    6. Breugelmans, Els & Campo, Katia, 2011. "Effectiveness of In-Store Displays in a Virtual Store Environment," Journal of Retailing, Elsevier, vol. 87(1), pages 75-89.
    7. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    8. Choi, Pilsik & Coulter, Keith S., 2012. "It's Not All Relative: The Effects of Mental and Physical Positioning of Comparative Prices on Absolute versus Relative Discount Assessment," Journal of Retailing, Elsevier, vol. 88(4), pages 512-527.
    9. Attari, Amin & Chatterjee, Promothesh & Singh, Surendra N., 2022. "Taking a chance for a discount: An investigation into consumers’ choice of probabilistic vs. sure price promotions," Journal of Business Research, Elsevier, vol. 143(C), pages 366-374.
    10. Barone, Michael J. & Coulter, Keith S. & Li, Xingbo, 2020. "The Upside of Down: Presenting a Price in a Low or High Location Influences How Consumers Evaluate It," Journal of Retailing, Elsevier, vol. 96(3), pages 397-410.
    11. Gelbrich, Katja, 2011. "I Have Paid Less Than You! The Emotional and Behavioral Consequences of Advantaged Price Inequality," Journal of Retailing, Elsevier, vol. 87(2), pages 207-224.

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