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Effectiveness of monetary discounts: comparing quantity scarcity and time restriction

Subhash Jha (Purdue University Northwest, Hammond, Indiana, USA)
Sujay Dutta (Marketing and Supply Chain Management, Wayne State University, Detroit, Michigan, USA)
Ahmet Koksal (Department of Management and Marketing, College of Business Education and Human Development, Louisiana State University Shreveport, Shreveport, Louisiana, USA)

Journal of Consumer Marketing

ISSN: 0736-3761

Publication date: 11 November 2019

Abstract

Purpose

This study aims to examine whether adding a quantity scarcity message to a monetary discount helps to improve consumers’ offer-related perceptions and intentions, and how the effectiveness of that message compares with adding time restriction to the offer.

Design/methodology/approach

Two experiments, where participants evaluated retail ads and responded to relevant measures, were conducted in two country markets.

Findings

Adding either a quantity scarcity message or time restriction to a monetary discount increases the potency of a retail offer. Further, when an offer ad emphasizes product and price-related cues in a balanced manner, time restriction results in more favorable consumer perceptions than scarcity. However, this difference in the messages’ efficacy disappears when the offer strongly emphasizes price-related cues.

Research limitations/implications

The US market sample is more homogeneous than the Indian one. Discounts were presented in terms of advertised reference prices; further research with other discount formats is desirable.

Practical implications

Understanding the relative efficacy of quantity scarcity message and time restriction in discounted retail offers can give managers flexibility in the use of these tools.

Originality/value

This paper addresses scholars’ call for theory-grounded research that provides guidance to retailers on the use of sales promotional tools.

Keywords

Acknowledgements

The authors acknowledge the non-monetary resource-based support provided by Purdue University Northwest, Wayne State University, and Louisiana State University Shreveport for this research. Indian Institute of Management Udaipur provided monetary support for the field research reported in Study 1. No direct or separately identifiable monetary support was provided for this research by the other institutions mentioned.

Citation

Jha, S., Dutta, S. and Koksal, A. (2019), "Effectiveness of monetary discounts: comparing quantity scarcity and time restriction", Journal of Consumer Marketing, Vol. 36 No. 7, pp. 901-910. https://doi.org/10.1108/JCM-07-2018-2763

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Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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