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Trapping Fake Discounts as Drivers of Real Revenues and Their Impact on Consumer’s Behavior in India: A Case Study

Author

Listed:
  • Iqbal Thonse Hawaldar

    () (College of Business Administration, Kingdom University, Riffa 40434, Bahrain)

  • Mithun S. Ullal

    () (Department of Commerce, Manipal Academy of Higher Education, Manipal 576104, India)

  • Felicia Ramona Birau

    () (Faculty of Social Science, University of Craiova, 200585 Craiova, Romania)

  • Cristi Marcel Spulbar

    () (Faculty of Economics and Business Administration, University of Craiova, 200585 Craiova, Romania)

Abstract

This empirical study contributes towards identifying the effect of both fake and real discounts in the Indian marketing environment. A common but unsustainable practice in India is to increase the selling price and then offer a discount on the product. Increasing sales based on fake discount pricing strategy is a primary business development objective in India. The discounts, however, vary across store type and time and are based on product features. The selected databases were collected from the top five Indian e-commerce portals in terms of volume of sales, and from popular brick and motor outlets of tier 2 and tier 3 cities in India. The empirical results indicate that offers based on price in India had an impact of 2.8 times higher than the actual quality of the product. The outcomes suggest that marked price has a significant impact on consumer’s behavior. The results also indicate the existence of a strong correlation between trapping fake discounts and purchase by deceiving and persuading customers in India. Research is empirical in nature and respondents have been selected based on purposive sampling. The study is limited to tier 2 and 3 cities of India for 250 days, and the results are applicable to online and offline retail stores.

Suggested Citation

  • Iqbal Thonse Hawaldar & Mithun S. Ullal & Felicia Ramona Birau & Cristi Marcel Spulbar, 2019. "Trapping Fake Discounts as Drivers of Real Revenues and Their Impact on Consumer’s Behavior in India: A Case Study," Sustainability, MDPI, Open Access Journal, vol. 11(17), pages 1-20, August.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:17:p:4637-:d:261047
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    References listed on IDEAS

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    More about this item

    Keywords

    advertising; prices; fake discounts; malls; e-commerce; consumer behavior; marginal cost; Indian middle-class; promotion technique;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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