The influence of regular price level (low, medium, or high) and framing of discount (monetary or percentage) on perceived attractiveness of discount amount

Aku Ville Lehtimäki, Kent B. Monroe, Outi Somervuori

Research output: Contribution to journalArticle

Abstract

Generally, discounting prices increases unit sales but decreases profit margins. If presenting a discount more attractively, will profits increase with sales? We tested discounts presented to customers in euros or percentages at three regular price levels (low, medium, or high). Store visitors were surveyed to determine the discount that would make a promoted product attractive to them. Results align with previous literature: the normal (or regular) price influences the discount attractiveness when the discount is presented in absolute (monetary) terms. However, percentage discounts were perceived similarly between price levels. The amount saved was not only considered: the discount attractiveness was also compared to some reference discount. Second: relative and absolute promotions’ references differ: the evaluations in absolute terms led to higher attractive discount levels.

Original languageEnglish (US)
Pages (from-to)76-85
Number of pages10
JournalJournal of Revenue and Pricing Management
Volume18
Issue number1
DOIs
StatePublished - Feb 14 2019

Keywords

  • Discount
  • Framing
  • Pricing

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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