It's Not All Relative: The Effects of Mental and Physical Positioning of Comparative Prices on Absolute versus Relative Discount Assessment

Choi, Pilsik; Coulter, Keith S.

doi:10.1016/j.jretai.2012.04.001

Cited by 29 publications

(23 citation statements)

References 52 publications

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“…Consumers use a variety of price‐related visual cues as they evaluate the prices of products (Grewal, Roggeveen, & Nordfält, 2014). Past research has shown several cues, such as the size of the fonts in which prices are presented (Coulter & Coulter, 2005), types of the fonts (fluent vs. disfluent) in which prices are presented (Mead & Hardesty, 2018; Motyka, Suri, Grewal, & Kohli, 2016), the distance between regular and sale prices (Coulter & Norberg, 2009), the presence of cents and commas in prices (Coulter, Choi, & Monroe, 2012), the presence of numbers that are of personal relevance to consumers (e.g., birthdate; Coulter & Grewal, 2014), vertical versus horizontal placement of prices (Choi & Coulter, 2012; Feng, Suri, Chao, & Koc, 2017), rounded versus precise prices (Thomas, Simon, & Kadiyali, 2010), and colors of prices (Puccinelli et al, 2013) among others. Particularly, the use of color red with prices is widely prevalent in retail.…”

Section: Conceptual Backgroundmentioning

confidence: 99%

Red price? Red flag! Eye‐tracking reveals how one red price can hurt a retailer

Bhatt

Jeong

et al. 2020

Psychology and Marketing

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Retailers present prices in red color to signal savings. Past research has shown that presenting all prices in red increases perceived savings from the store. However, in practice, retailers often present just one price in red in promotion materials with multiple prices. Will consumers perceive higher savings from the store even if only one price is presented in red? This research examines this prevalent retail practice using a theoretical lens. The theoretical framework predicts that two unique learned associations with red color (red: Savings and red: Stop) play a key role in shaping consumers' perception of savings from stores that highlight only one price in red. This research proposes and empirically demonstrates that consumers perceive lower savings from stores that present only one price in red. The theoretical framework is validated using a multi-method approach that combines the strengths of behavioral and physiological (eye-tracking) methods. Findings from this research suggest that presenting only one price in red lowers perceived savings from the store, which may hurt sales.

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Section: Conceptual Backgroundmentioning

confidence: 99%

Red price? Red flag! Eye‐tracking reveals how one red price can hurt a retailer

Bhatt

Jeong

et al. 2020

Psychology and Marketing

View full text Add to dashboard Cite

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“…Consumers are easily influenced by the presentation formats of price‐based promotions (e.g., Cai et al., ; Chen, Monroe, & Lou, ; Kim, ; Krishna, Briesch, Lehmann, & Yuan, ). Prior research has revealed that various factors affect the appeal of promotional offers, and these factors include number representation (Kruger & Vargas, ); relative size of discount (Darke & Dahl, ); placement of prices (Choi & Coulter, ); and price‐item order (Bagchi & Davis, ). Among various ways of framing discount promotions, double‐discount has gained much attention from practitioners and researchers.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

The Illusion of Double‐Discount: Using Reference Points in Promotion Framing

2019

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Double-discount is an effective format for promoting purchase decisions. However, extant literature has overlooked how temporal order of discounts applied affects consumers' purchase decisions. In this paper, we show that the sequence of discount magnitude (e.g., 10% followed by 40% vs. 40% followed by 10%) leads to biases in consumer judgment and influences the perceived appeal and purchase intention of the deal. We term this the double-discount sequence effect. Using four experiments, we showed that double-discount in an ascending sequence (e.g., taking 10% off, then an additional 40% off) is preferable over that in a descending sequence. We also found that discount application sequence-but not the presentation order-matters to consumers. Consumers anchor on the first discount they encounter and evaluate the second discount with respect to this first one.

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“…Some studies have demonstrated that whether consumers evaluate the difference between two prices in absolute vs. relative terms may depend upon the manner in which the information is presented (Bonini and Rumiati 2002;Bartels 2006;Peters et al 2006;Choi and Coulter 2012) or how the specific task is framed (Thomas and Morwitz 2009)]. For example, consider a high (regular) price of $12.00, and a low (sale) price of $8.99.…”

Section: The Four Fundamental Conceptsmentioning

confidence: 99%

“…These findings indicate that consumers are capable of arriving at relative (i.e., percent) discount assessments without expending significant cognitive effort. Further, a recent number comparison study using reaction time manipulations demonstrated that consumers are able to accurately estimate (if not "compute") relative differences with minimal cognitive effort, and in a matter of milliseconds (Choi and Coulter 2012). Finally, research has demonstrated that consumers may be more likely to estimate discounts in relative terms as computational difficulty increases (Thomas and Morwitz 2009).…”

Section: The Four Fundamental Conceptsmentioning

confidence: 99%