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Comparing the effectiveness of fixed and discounted prices in the US and South Korea

Rajneesh Suri (Assistant Professor of Marketing, Drexel University, Philadelphia, Pennsylvania, USA)
Rajesh V. Manchanda (Associate Professor of Marketing, University of Manitoba, Winnipeg, Manitoba, Canada)
Sungho Lee (Associate Professor of Marketing, The University of Seoul, Seoul, Korea)

International Journal of Retail & Distribution Management

ISSN: 0959-0552

Article publication date: 1 June 2004

Abstract

Building on research that has studied cultural differences between South Korea and the USA, the authors' conceptualization suggests that products associated with fixed and discounted price formats would be evaluated differently in these two countries. The differences in product evaluations were expected to lead to differences in perceptions of quality, monetary sacrifice and value of offers between the two pricing formats. These predictions were tested using laboratory experiments conducted in South Korea and the USA. Results showed that Korean subjects’ evaluated a product that was discounted in price to be superior in quality and value and lower in monetary sacrifice than when it was the full price. The US subjects however, reacted in an opposite manner and evaluated products with discounted prices as inferior in quality and value in comparison to a fixed price. These findings were robust across two discount conditions (15 percent and 20 percent off).

Keywords

Citation

Suri, R., Manchanda, R.V. and Lee, S. (2004), "Comparing the effectiveness of fixed and discounted prices in the US and South Korea", International Journal of Retail & Distribution Management, Vol. 32 No. 6, pp. 328-336. https://doi.org/10.1108/09590550410538033

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited