Plausible vs. Implausible Tensile Price Claim: Selective Accessibility Model Approach

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2017-01-01
Authors
Lee, Jung Eun
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Abstract

Given three types of tensile price claims (TPCs; Save 30% or more, Save up to Y%, and Save 30-Y%), when Y is a plausible discount (60%), the results showed that max expected price discount (EPD) was lower and perceived savings and price fairness were higher for the TPC stating a min savings than one that states a max or a range of savings. In contrast, when the Y% is implausible (90%), the consumers' EPD was not adjusted depending on the TPC, resulting in no difference in perceptions of price discount across the different types of TPCs. If high and plausible discount percentages are used in a TPC and only a few products are discounted at that high level, this may decrease overall sales per customer for the majority of the products with lower discounts. Thus, marketers should select appropriate price promotion ads carefully.

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