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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.

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.

Discounting has become the crack cocaine of senior management with terrifying effects on both revenue and profits. The purpose of this paper to show managers how and where to put a stake in the ground to kick the discounting habit and move to a more effective and disciplined approach to pricing.

The author leverages his research on trust in buyer seller relationships with extensive experience with real world pricing to provide insights in why and when discounting is not appropriate and how business can benefit in terms of both profits and revenue growth by adopting more appropriate pricing tactics.

Prior research has shown that more effective pricing can lead to an 11 percent improvement in a firm's profitability. By focusing on eliminating unnecessary discounting, managers can improve profits by more than 20 percent. Specific management tactics are identified which reflect the realities of doing business in today's world of increased competition, product commoditization and sophisticated buyers.

Provides insights in why and when discounting is not appropriate and how business can benefit in terms of both profits and revenue growth by adopting more appropriate pricing tactics.

A study of the price discounts granted by Morton Salt Company and other producers of table salt in the U.S. on their sales of table salt to grocery wholesalers and retailers. The discounts were found to be illegal under the Robinson-Patman Act by the Federal Trade Commission and the Supreme Court. The Commission and the Court believed that the discounts were unjustified price concessions granted to “large” buyers, consistent with the concerns of the Robinson-Patman Act. However, the evidence indicates that the most common discount – the “carload discount” – was received by virtually all buyers, regardless of the buyer’s size; the other discounts – “annual volume” discounts – though received primarily by “large” buyers, were likely cost based. The history of the discounts and likely reasons why they were granted are explored in detail.

While regular price discount (RPD) promotions remain popular, marketers have also introduced gambled price discounts (GPDs) in recent years. There is a need to understand the performance and limitation of the relatively novel GPD, because the importance of pricing and the surprise element inherent in GPD could cause the promotions to backfire when inappropriately applied. This study compared the performance of GPD and RPD via consumers' perception of their attractiveness through quality cues of product types (experience and search goods) and word-of-mouth (WOM) content (affective and cognitive).

Analysis of variance (ANOVA) was applied on a 2 (product type: experience goods [hotel rooms] vs. search goods [printers]) × 2 (word-of-mouth type: affective vs. cognitive) × 2 (price promotion type: GPD vs. RPD) between-subjects scenario experimental design (resulting in eight conditions).

Analysis of the 600 returns revealed that RPD does well for both search and experience goods, but GPD is more attractive for the marketing of experience goods. GPD works better with cognitive than with affective WOM.

GPD is a relatively new domain in marketing research. This study contributes to GPD literature and behavioral pricing literature. The study also adds to a better understanding of the dynamics, usefulness and limitations of GPD by considering the roles played by surprise element inherent in GPD and comparing it with RPD.

Contracting is an important issue in supply chain management. In this paper, the authors aim to discuss and compare the manufacturer's contracting options when the retailer faces a traditional newsvendor problem with a fixed retail price: a wholesale price only contract, a wholesale price discount contract, a returns policy contract, and a returns policy with the wholesale price discount contract. The paper also aims to examine how these contracting options affect decisions of the manufacturer and the retailer, as well as the supply chain efficiency.

Models are developed based on the manufacturer's four contracting options. The manufacturer's optimal wholesale prices have been obtained. The ordering decisions of the retailer are discussed in each of the manufacturer's four contracting options. The paper also uses numerical examples to illustrate the author's managerial insights and results.

As compared to the wholesale price only contract, it is found that implementing a wholesale price discount policy effectively encourages the retailer to order more product and enhances the retailer's profit at the expense of lowering the manufacturer's profit. It is also found that when the manufacturer offers a returns policy and if this policy cannot enhance the retailer's profit, a returns policy with the wholesale price discount contract can lead to a win‐win situation for both the manufacturer and the retailer.

The research provides managerial insights on how different contracts affect decisions and efficiency of the supply chain.

To analyze the impact of temporary retail price discount on a consumer goods product category using semiparametric regression and considering different promotional price discount characteristics as well as brand characteristics.

A semiparametric regression model using Support Vector Machines, which aim to evaluate retailers' decisions about temporary price discounts, has been developed. The model is derived from the analysis of historical sales data, which provide precise evaluation of previous temporary price discounts periods. The model is also consistent with ample empirical evidence showing that historical retail sales data can be used to evaluate the impact of past promotions.

Provides an estimation of the shape of the deal effect curve, indicating which temporary price discounts are more effective to increase sales and showing the existence of different threshold and saturation levels. Confirms that promotional price discounts accelerate sales especially during week ends. Evidences that promoting high‐priced (high‐quality) brands has a stronger impact on sales of low‐priced (low‐quality) brands than the reverse and that cross‐price effects are stronger on the sales of brands with similar prices. Suggests the convenience of the use of the proposed semiparametric methodology to the study of the promotional effects considered.

It is not possible to generalize the modelled shapes of the deal effect curves. There is no information available on feature advertising nor displays. It is important to determine the generalizability of these results to the study of additional promotional effects. It would also be interesting to assume that the retailer's deal policy is exogenous.

Provides a relevant tool to assess the set of price promotional periods by the grocery retailer. With a more precise and accurate knowledge about the performance of past temporary price cuts, retailers can implement more effective promotional periods.

Retailers are known to present tensile price claims (TPCs) stating high discounts to entice shoppers. Prior research on TPCs suggests that high TPC discounts increase purchase intentions. However, the current study proposes, first, that the TPC discount shifts expected price discount (EPD) and, second, that the gap between the actual price discount and the EPD influence perceptions of the discount deal. Support for these propositions would suggest that high TPC discounts will only be effective when they closely match the actual price discount. Therefore, the purpose of this paper was to evaluate the effectiveness of exaggerated maximum-discount TPCs.

Two experiments were used. Study 1 investigated the effect of exposure to a TPC on EPD. Study 2 examined discount discrepancy as a mediator of the relationship between a TPC and consumer perceptions (i.e. perceived savings and price fairness) and purchase intentions. PROCESS and ANOVA were used for the analysis.

This research showed that exposure to a TPC influenced consumers’ EPDs. As TPC discount increased, EPD increased and the discount discrepancy (i.e. actual price discount minus EPD) decreased (and, in some cases, became negative). The discount discrepancy influenced consumer perceptions of savings and fairness, as well as purchase intentions. Consequently, when the actual price discount encountered was not as large as the advertised TPC discount, the results showed a negative, indirect influence of exaggerated maximum-discount TPCs on consumers’ discount perceptions, mediated by the discount discrepancy.

Previous TPC studies found that the size of the TPC discount positively influences consumers’ discount perceptions, implying that larger discounts are more effective. However, this approach does not take into consideration the notion that larger TPC discounts increase consumer expectations about the size of discount and these expectations are used as a frame to evaluate a discount deal. The findings of the current research show a negative, indirect influence of exaggerated TPC discount on consumer perceptions and purchase intentions through discount discrepancy. Therefore, this study provides a new perspective to explain the influence of TPC discount size on consumer perceptions.

Price is an important variable because it has a direct impact on a company’s profitability. However, there is limited evidence to support the effectiveness of competing strategies of fixed pricing and discounted pricing. As a result, both strategies are practised extensively in the industry. This paper draws on theories on affect, information processing, and pricing to provide a conceptual framework. The aim is to examine the effect of fixed pricing and discounted pricing on consumers’ affect and evaluation of products. Results from an experiment indicate that a fixed price format elicits more positively valenced thoughts and stronger positive affect than a discounted price format. This affective response, in turn, results in a less thorough processing of price information and, consequently, higher perceptions of quality and value for the fixed price format. Managerial implications of these findings are discussed.

This research examines the effects of bundling format (partially‐bundled attributes vs. unbundled attributes) and framing of promotional discounts (rebate, discount and free‐options) on perceived quality, price acceptability, perceived value and subsequent purchase intentions. The results indicate that price reductions that are framed as providing “free” product options are perceived more favorably than conventional discounts which, in turn, are more favorable than rebates, holding the total amount of a price reduction constant. The results also suggest that unbundling of deals (or segregation of gains) enhances these perceptions.