Quality perception and monetary sacrifice: a comparative analysis of discount and fixed prices
Abstract
In this article we analyze price discounts and fixed price offers in terms of their comparative impact on consumer valuation of products. Using a model of consumer valuation, we explore the interaction between the negative quality effect and the positive monetary sacrifice effect associated with price discounts. This model suggests that intermediate levels of price discounts will be more desirable than a fixed price offer. However, a fixed price offer may be more desirable than both high and low levels of price discounts. The results from an experiment conducted to test this model showed support for the predictions from the model.
Keywords
Citation
Madan, V. and Suri, R. (2001), "Quality perception and monetary sacrifice: a comparative analysis of discount and fixed prices", Journal of Product & Brand Management, Vol. 10 No. 3, pp. 170-184. https://doi.org/10.1108/10610420110395395
Publisher
:MCB UP Ltd
Copyright © 2001, MCB UP Limited