The Effects of Discount Location and Frame on Consumers’ Price Estimates
2009, Journal of Retailing
Devon Delvecchio, Arun Lakshmanan, H. Shanker Krishnan
A discount may be defined by the location in which, and frame by which, it is communicated. Discount framing, particularly the differences between cents-off and percentage-off discounts, has been widely studied. Discount location (e.g., proximate to or distal from regular price info) has received considerably less attention. We employ the proximity-compatibility principle and tenets of human memory to demonstrate that discount framing (cents-off, percentage-off, and revised price) and discount location (proximal, distal) interact to differentially affect both the immediate value and the persistence of consumers’ price estimates. The implications of these results for retailers and manufacturers are highlighted in the discussion.
Delvecchio, Devon, Arun Lakshmanan, and H. Shanker Krishnan (2009), "The Effects of Discount Location and Frame on Consumers’ Price Estimates," Journal of Retailing, 85 (3), 336-346.