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“Pay 80%” versus “get 20% off”: The effect of novel discount presentation on consumers’ deal perceptions

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  • Hyeong Kim
  • Thomas Kramer

Abstract

Consumers often undervalue price promotions because they discount the discounts. In this research, we examine the effect of using a novel type of discount presentation (e.g., “Pay 60% of the regular price”) on deal evaluations, and compare it to that of an equivalent discount presentation commonly used in the U.S. (e.g., “Get 40% off the regular price”). In three experiments we show that the former discount presentation results in higher perceived savings and higher purchase likelihood than the latter. Using process measures, we demonstrate that this effect is due to increased systematic processing induced by the novelty of the discount presentation, which improves calculation accuracy and hence decreases the underestimation of discounts. We also report a boundary condition of the effect of discount presentations on deal evaluations by showing that it is eliminated when consumers do not need to expend effort to accurately process price information. Copyright Springer Science + Business Media, LLC 2006

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  • Hyeong Kim & Thomas Kramer, 2006. "“Pay 80%” versus “get 20% off”: The effect of novel discount presentation on consumers’ deal perceptions," Marketing Letters, Springer, vol. 17(4), pages 311-321, December.
    • Handle: RePEc:kap:mktlet:v:17:y:2006:i:4:p:311-321
    DOI: 10.1007/s11002-006-9309-7
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    References listed on IDEAS

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    2. Elizabeth Chinomona, 2019. "Modelling the Drivers of Impulsive Buying Behaviour: A Case of South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 11(1), pages 27-38.
    3. Carlson, Jeffrey R. & Kukar-Kinney, Monika, 2018. "Investigating discounting of discounts in an online context: The mediating effect of discount credibility and moderating effect of online daily deal promotions," Journal of Retailing and Consumer Services, Elsevier, vol. 41(C), pages 153-160.

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