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Rutgers Studies in Accounting Analytics: Audit Analytics in the Financial Industry
Type: Book
ISBN: 978-1-78743-086-0

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Article
Publication date: 25 October 2021

Marcus Wardley

This paper aims to examine the effects of a general service recovery effort in consumers who were not victims of the service failure.

Abstract

Purpose

This paper aims to examine the effects of a general service recovery effort in consumers who were not victims of the service failure.

Design/methodology/approach

This study uses a 2 × 2 between-subjects design comparing a service failure announcement with apology and an anniversary event announcement, either with a 15% discount or no discount on purchase intentions.

Findings

A service recovery effort involving an apology and 15% discount leads to higher purchase intention in consumers who were not victims of the service failure in comparison to a control. The unexpected apology generates surprise, which amplifies the effect of the discount, leading to higher purchase intention.

Practical implications

The results of this study suggest that apologizing and offering a discount for a minor service failure can have positive effects on consumers who were not victims of the service failure. Thus, if a company is unsure which consumers have been affected by a service failure, this study shows that issuing a general apology for the failure does not have negative effects in unaffected consumers.

Originality/value

To the best of the author’s knowledge, this paper is the first to examine the effects of a service recovery effort in consumers who were not victims of the service failure and the first to find evidence of a service recovery paradox in unaffected consumers.

Details

International Journal of Quality and Service Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1756-669X

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Article
Publication date: 6 September 2021

Nan Cui, Yu Xiao, Yujiao Hu, Lan Xu and Yi Hu

The aim of this research is to quantitatively synthesize empirical findings of the effect of discount level on consumer response to the coupon.

Abstract

Purpose

The aim of this research is to quantitatively synthesize empirical findings of the effect of discount level on consumer response to the coupon.

Design/methodology/approach

The authors used the meta-analysis method to synthesize coupons' discount level effects on consumer response. Meta-regression was used to examine the moderating factors that affect the relationship between discount level and consumer response.

Findings

The average effect size of the discount level is 0.331, indicating that higher discount levels lead to higher consumer responses. The effect of discount level on consumer response to the coupon is stronger when the discount is displayed in proportion format (vs amount format), when consumers are distant (vs near) to the coupon-issuing stores, and when consumers have not opted-in to receive promotional information. The discount level effect is weaker for coupons that can be redeemed online (vs offline only), for hedonic products (vs utilitarian products) and for products of real brands.

Originality/value

From information processing and cost–benefit trade-off perspectives, this research proposes a comprehensive research framework that synthesizes a variety of contextual factors. It identifies several contextual factors that may reconcile several inconsistent findings in the existing literature. It also addresses how the new-technology related factors affect coupon redemption under different discount levels.

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Journal of Contemporary Marketing Science, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2516-7480

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Article
Publication date: 1 April 1976

D.G. Watkin and M.E. Joseph

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…

Abstract

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.

Details

Retail and Distribution Management, vol. 4 no. 4
Type: Research Article
ISSN: 0307-2363

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Article
Publication date: 1 June 2006

Hwan Ho Ha, Jung Suk Hyun and Jae H. Pae

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

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1824

Abstract

Purpose

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

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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.

Originality/value

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

Details

Marketing Intelligence & Planning, vol. 24 no. 4
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 28 October 2014

Alexandra Luong and David Slegh

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…

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1446

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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.

Originality/value

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.

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Nankai Business Review International, vol. 5 no. 4
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 1 September 1997

Andreas Herrmann, Frank Huber and Robin Higie Coulter

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…

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12852

Abstract

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.

Details

Pricing Strategy and Practice, vol. 5 no. 3
Type: Research Article
ISSN: 0968-4905

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Article
Publication date: 1 May 1988

Christopher J. Cowton and Andrew Wirth

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…

Abstract

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.

Details

Personnel Review, vol. 17 no. 5
Type: Research Article
ISSN: 0048-3486

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Article
Publication date: 1 April 2004

Bülent Sezen

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…

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2479

Abstract

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.

Details

International Journal of Retail & Distribution Management, vol. 32 no. 4
Type: Research Article
ISSN: 0959-0552

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Article
Publication date: 1 February 2006

Ramakrishnan Ramanathan

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…

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1380

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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

Research limitations/implications

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.

Practical implications

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

Originality/value

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.

Details

International Journal of Retail & Distribution Management, vol. 34 no. 2
Type: Research Article
ISSN: 0959-0552

Keywords

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