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This paper aims to clarify the effect of discount discrepancy (DD) on consumers’ purchase intention (PI). The authors propose, test and provide evidence and explanations about the moderation of justification in the relation between consumers’ perceived DD and PI.

The authors conducted three experimental studies with a 2 × 2 factorial design, focusing on consumers’ processing of price discounts. Participants were informed that this study aimed to gather opinions on fashion, clothing and retail sales promotions. They accessed the questionnaire via Qualtrics. Each participant took part in only one study. The experimental conditions were manipulated through scenarios.

Study 1 tested and supported the moderation of justification on the effect of DD on PI. Study 2 tested and supported the moderation of the type of justification for the effect of DD on PI. Study 3 confirmed the findings in Study 2 and revealed the more effective type of justification.

The authors focused on a typically hedonic product category (fashion clothing). Further research should include a wider variety of goods and services, which could lead to different explanations or generalizations.

Sales promotions must refrain from generating DD between the initial price discount and the subsequent smaller discounts. Practitioners must evaluate the gains of an initial, more considerable percentage discount to attract consumers to the store and sell them other products versus the cost of losing sales because of DD. Management should recognize the importance of giving the correct justification for perceived DD, aligning the firm’s justification with the consumer’s motivation to buy the product.

The authors offer subsidies for effective consumer protection policies.

By studying the influence of justification on the effect of DD on PI, the authors propose a mechanism that would reduce the negative effect of DD on consumers’ PI.

Discount food stores opened within days of each other in Welshpool and Porthcawl earlier this year. How have established retailers been affected in these two very difficult towns with their traditions of small independents (Welshpool) and larger supermarkets (Portcawl)? What has been the impact on shoppers from the surrounding countryside? Are the new stores nine‐day‐wonders or have they already attracted loyal customers? These are some of the questions investigated by the authors who are currently continuing their study of the effects of the discount stores on existing retail outlets in Welshpool and Porthcawl.

To investigate shoppers' decision‐making behaviour under conditions of expected and unexpected in‐store price discounts, using mental accounting theory as the analytical framework.

In an experiment manipulating expected and unexpected discounts on electronic organisers and portable audio players, data collected by questionnaire from 240 first‐year business administration students at a Korean university were used to test two hypotheses predicting the ways in which the savings would be used.

Recipients of unexpected discounts tend to spend the savings in store. If a choice of two products is available, the savings are more likely to be applied to the discounted one than the other. Shoppers commit more actively to planned purchases when price discounts are known in advance. The key factor in purchasing behaviour with respect to discounts is the existence or otherwise of predictions. Shoppers' decision‐making in these conditions is, therefore, context and frame dependent.

The experimental subjects were not representative of the general shopping population, and Korea is a distinctive culture. The findings should be interpreted with caution, but are indicative within limits. Aspects of the topic not investigated by the experiment are identified, and future research directions suggested.

Unadvertised discount available at the point of sale offer several potential benefits to retailers, including reduced costs and increased patronage. Pricing strategists need to understand the theoretical basis of customers' behaviour in response to discount offers, for effective planning.

Adds to the body of knowledge relating to crucial aspect of pricing strategy, and has potential applicability beyond retailing.

The purpose of this study was to examine the effects of price discounts on products perceived to provide hedonic value vs those perceived to evoke displeasure. Also examined were the effects of various discount levels on consumer intentions to purchase.

The study design was a 2 (emotion-evoked) × 2 (price) × 3 (level of discount) mixed-factorial design. In this study, 182 participants were presented with several products and indicated whether they would shop with a competitor offering various price discounts on pleasure- vs displeasure-evoking products.

ANOVA results indicated a significant main effect of price discounts on intention to purchase and a significant interaction between price discount and type/price of product. Discounts mattered more between certain levels (10 and 50 per cent) than others (50 versus 70 per cent). Discounts mattered more for hedonic products (pleasure-evoking) than those that evoked displeasure; however, price trumped all factors such that discounts mattered most when price of product is high.

Limitations include age range of participants and that intentions to shop were measured. Future research should examine price effects on other socio-demographic groups and actual behavior.

Retailers would benefit from using price discounts as a competitive strategy, with attention given to the “percentage-off” levels that are perceived to be steeper. Discounts are more effective when the product offers hedonic value or when price is high.

To our knowledge, this is the first study to examine the relationship between “percentage-off” price discounts on hedonic products. This study contributes to the literature on pricing affect.

Examines the effects of four factors (the bundle: pure or mixed, the price discount, the functional complementarity of bundle components, and the number of bundle components) on consumers’ intentions to purchase product and service bundles. The findings were relatively consistent across product (automobile) and service (automotive service) contexts, and illustrate that pure bundles are preferred to mixed bundles, and a greater price discount is preferred to a lesser one. The results also indicate that five component bundles generate greater purchase intention than either three or seven component bundles, and that “very related” bundle components result in greater purchase intention than either moderately or not related components. Additionally, several interactions are present.

Fringe, or “non‐wage”, benefits typically form an important part of the compensation package provided for employees, having grown considerably during the 20th century. One of the more traditional types of benefit, of interest in this article, is the provision of goods and services to employees at a price below that which they would normally expect to pay. More specifically, we are interested in the sale, at a discount, of a company's own products, rather than the provision of other goods and services, such as meals or private health insurance, at low rates made possible by company subsidy or the exploitation of its buying power or facilities. While a company may sometimes sell discontinued lines or damaged stock to its employees, our focus is on the sale of normal products. Our primary purpose is to show how, with an understanding of cost and revenue relationships, the problem of setting the rate of discount can be approached. The analysis draws on and extends previous work on shareholder concessions.

Consumers are less likely to purchase perishable goods when their expiry dates are near. For this reason, retailers frequently implement a discount pricing policy when the products have reached closer to their expiry dates. This paper introduces a simple methodology for helping the managers in their discount pricing decisions. Based on the expected value approach, the suggested method utilizes the probability values obtained from the past experiences and calculates an expected profit value for each alternative discount policy. Decision maker then selects the discount policy with the highest expected profit.

Commodities that have a fixed useful life are said to be perishable commodities. These commodities pose special problems to retailers and distributors as these have to be sold before their shelf‐life. Retailers offer discounts on perishable products nearing their shelf‐lives to encourage consumers to buy. In these situations, retailers would like to know when they should begin to offer the discount, what should be the quantum of discount, and how many units of the commodity they should stock on the shelf to maximize their expected profit. This paper aims to address these three issues.

A recently published paper has suggested a simple procedure based on expected profits to identify time and quantum of discount for perishable products. Extending this, a modified empirical procedure is suggested in this paper to identify the number of units to be stocked, discount period and the quantum of discount. A numerical illustration is used to explain the steps involved in the procedures.

It is shown that offering discounts results in higher profit compared to the profit with no discount.

For more complex situations where discounts are changed more frequently, simulation methodology or the yield management principles could be used. Game theory can be employed to identify the equilibrium strategies of price‐sensitive consumers and retailers.

Aids retailers and distributors with the special problems presented by the disposal of perishable commodities.

The application of an expected profit approach suggested earlier is extended to identify the number of items to be stocked. The results will be useful to retailer managers.

Venture capitalists typically use discount rates in the range of 30-70 percent. During the startup stage of venture-capital financing, discount rates between 50 and 70 percent are common. The discount rate decreases from the first through fourth stage: from 60 to 30 percent. These rates of return are high compared to historical returns on common stocks or small stocks (12.1 and 17.8 percent, respectively). Such high discount rates cannot also be explained in the context of any existing asset pricing theory; that is, any reasonable risk-adjusted discount rates are not consistent with discount rates in the order of 30-60 percent. The paper provides a rational economic explanation why venture capitalists (VC) use such high discount rates. The paper aims to discuss these issues.

Let the discount rate of a venture project be 15 percent; this discount rate depends on the systematic risk of the cash flows from the project given that the project is successful. Using the procedure, a VC who estimates the probability of eventual success of the project between 60 and 40 percent will impose a discount rate between 42 and 74 percent. These discount rates are quite similar to the discount rates charged by VC in their startup and first stages.

The high rates of return charged by VC reflect the fact that not all their projects succeed in that they have no net cash-inflows. Adjusting for the probability of success of the project provides estimates of discount rates comparable.

The paper argues that reported rates of return of common stock are relevant for projects that have succeeded in that they have net cash-inflows.