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Article
Publication date: 15 March 2013

Jaekwon Chung and Dong Li

The purpose of this study is to compare the impact of multi‐period pricing, as an example of more dynamic pricing and discounting strategy with that of a present less dynamic…

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Abstract

Purpose

The purpose of this study is to compare the impact of multi‐period pricing, as an example of more dynamic pricing and discounting strategy with that of a present less dynamic alternative on customer satisfaction and consumers' willingness to make trade‐offs between price and remaining shelf‐life.

Design/methodology/approach

The authors conducted interviews with three food retail managers in South Korea to gather practical information about the management of perishable foods, which informed the design of a survey in which consumers in South Korea were questioned about their perceptions of the two strategies, with respect to nine perishable food products in three categories. The data collected were analysed by one‐way ANOVA and the t‐test.

Findings

The findings of this research present an improved understanding of the impact of a multi‐period pricing strategy on consumer satisfaction and customer behaviour for perishable foods. The conclusions have the potential to significantly assist food retailers to understand the consumers' perspective on the benefits of a more dynamic pricing strategy.

Practical implications

The findings suggest that food retailers can enhance customer satisfaction by offering an earlier but lower discount, and increasing it as perishable food items approach their expiry date, rather than a higher discount when the expiry date is imminent.

Originality/value

The findings in this study are significant since they serve as the first step in measuring the value of dynamic pricing approaches that provide better trade‐off options between price and remaining shelf‐life from consumers' perspectives.

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