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When less is better than more: Just-below discount in tensile price promotions |
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| Institution: | 1. Peter T. Paul College of Business and Economics, University of New Hampshire, 10 Garrison Avenue, Durham, NH 03824-2602, United States;2. School of Business and Information Technology, University of Ontario Institute of Technology, Oshawa, Ontario, Canada;3. Marketing School of Management, The Sage Colleges, 140 New Scotland Ave, Albany, NY 12208, United States;1. Department of Business Management, Qazvin Branch, Islamic Azad University, Qazvin, Iran;2. Department of Business Management, Science and Research Branch, Islamic Azad University, Tehran, Iran;1. Newcastle Business School, University of Newcastle, Australia, UONS Singapore, 355 Jalan Bukit Ho Swee, Tiong Bahru 169567, Singapore;2. QUT Business School, Queensland University of Technology, 2 George Street, PO Box 2434, Brisbane, Queensland 4001, Australia |
| Abstract: | Retailers often use Tensile Price Claims (TPC) such as “upto 40% off” or “from 10% to 40% off” to promote a line of merchandize. This enables them to have a salient communication while allowing specific level of discount on particular items. Recently, retailers have started using just-below TPC frames such as “upto 39% off”. This research explores the influence of TPC framed with “just-below” numbers on consumers’ perceived benefits through three studies. The results indicate that just-below temporal frames have a more favorable impact on consumer perceptions than round frames; this is contrary to left digit salience heuristic but is in line with anchoring and adjustment theory. The effect of just-below framing disappears both for deep discount levels and with sequential TPC discounts. This study has important managerial implications for the use of TPC as a promotional tool. The study also contributes to theory in multiple ways. |
| Keywords: | Tensile Price Claims Just-Below discounts Anchoring and adjustment Numerical precision Sequential discounts |
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