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Pricing is an essential element when it comes to marketing and selling goods and different price promotions are widely used tools to attract and retain consumers. However, the expected positive impacts of such price promotions on consumer perceptions have been increasingly questioned in recent years. In particular, with regard to quality perceptions and internal reference prices, a number of past research findings suggest that monetary price promotions might be more likely to result in unfavourable consumer perceptions than non-monetary promotions (Diamond & Campbell, 1989; Darke & Chung, 2005). Instead of only focusing on the short-term effects of different promotion methods, the aim of this study is to examine the long-term effects of the use as well as the choice of price promotions on consumers’ value perceptions. Using an internet-based survey, subjects’ long-term willingness to pay for three non-durable consumer goods (a pack of pasta, a toothpaste and a basic t-shirt) was investigated under the following three conditions: the post-promotional phase of a "buy one, get one free" offer, the post-promotional phase of an economically equivalent 50% discount and a situation in which no price promotion was applied at all. For the consumer non-durable pasta, the results suggested that consumers’ value perceptions would be significantly influenced by whether or not a price promotion was previously applied and if so, which one. Furthermore, for the noodles, the findings seemed to corroborate the hypothesis that consumers' willingness to pay is highest in the absence of any previous promotion. Surprisingly, no significant difference was found between the post-promotion phase of the discount offer and the post-promotion phase of the BOGOF offer for any of the three products. All in all, this research provides some meaningful insights on the potential long-term impacts of price promotions on consumers’ value perceptions and willingness to pay. Moreover, our findings could be of particular relevance for managerial decisions regarding the marketing of non-durables in the grocery sector.
People are surrounded by many offers every day, a discount, a gift or a special sale. A walk through a store can lead us to purchases which are not necessary but in our minds are worth it. Pricing may be one of the easiest ways to influence consumers and to make products more attractive.
This study compares the pricing practices “use of word free/free offers” for example buy one get one free and “discount.” Those two practices have different influences on the consumer behaviour and the product perception. A discount tends to be less worth it than a free offer if an average customer would be asked. A survey of over 200 people was made to witness this statement.
This number of people were divided into two groups which were asked different questions via an A/B testing survey. Group A was asked about a free product, and group B was asked about a discount. Additionally, this study includes a field validation in the form of observation. Customers of a transregional drugstore were observed when buying a product. This drugstore where the validation was made offers a bi-weekly brochure with promoted products. Among them are discounts and free offers. The number of sales was compared and analysed to confirm the results of the survey.