Purchase decision regret: Negative consequences of the Steadily Increasing Discount strategy |
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| Institution: | 1. College of Business, Copeland Hall 530, Ohio University, Athens, OH 45701, United States;2. Department of Marketing, Saunders College of Business, Rochester Institute of Technology, 105 Lomb Memorial Dr., Rochester, NY 14623, United States;3. Department of Management and Marketing, Culverhouse College of Commerce, The University of Alabama, Box 870225, Tuscaloosa, AL, United States;1. Ehrenberg-Bass Institute for Marketing Science, Business School, University of South Australia, Adelaide, Australia;2. Communicado Pty LTD, Melbourne, Australia;1. Culverhouse College of Commerce, University of Alabama, P. O. Box 870225, Tuscaloosa, AL 35487-0225, United States;2. College of Business, Florida State University, 307 RBA, Tallahassee, FL 32312, United States;3. Carroll School of Management, Boston College, 140 Commonwealth Ave., Chestnut Hill, MA 02467, United States;4. School of Hotel Administration, Cornell University, 545 Statler Hall, Ithaca, NY 14853, United States;1. Haskayne School of Business, University of Calgary, Canada;2. Faculté des Sciences de l''Administration, Université Laval, Canada;3. College of Business, the University of Texas at Arlington, United States;1. Department of Marketing, University of Bremen, Hochschulring 4, 28359 Bremen, Germany;2. ESCP Europe Business School Berlin, Heubnerweg 8-10, 14059 Berlin, Germany;3. Department of Marketing, Goethe University Frankfurt, Theodor-Adorno-Platz 4, 60323 Frankfurt/Main, Germany;4. Institute of Business-to-Business Marketing, University of Muenster, Koenigsstraße 47, 48143 Muenster, Germany |
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| Abstract: | The Steadily Increasing Discount pricing strategy pits product scarcity against a future discount and forces consumers to make a choice between cost savings and the potential risk of missing the purchase opportunity. Dual non-student samples provide insight into the regret associated with this decision. The first study finds that product scarcity increases both action regret (purchase) and inaction regret (non-purchase) while the level of discount only influences inaction regret. In study two, the individual characteristics of materialism and price consciousness both impact the decision to buy, only materialism influences purchase decision regret. Theoretically, the results reverse the omission bias, demonstrating that regret from inaction is more salient than regret from action in this purchase situation. The studies underscore the high-risk, high-reward nature of multi-period pricing for managers. While firms control product availability and discount levels, they cannot control their customers' personality traits. Therefore, they should make every effort to understand their customers before embarking on such a strategy. |
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