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

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...

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Bibliographic Details
Published in:Journal of consumer psychology 2019-07, Vol.29 (3), p.483-491
Main Authors: Gong, Han, Huang, Jianxiong, Goh, Kim Huat
Format: Article
Language:English
Subjects:
Deal appeal
Double‐discount
Double‐discount sequence effect
Price framing
Reference points
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Summary: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.
ISSN:1057-7408
1532-7663
DOI:10.1002/jcpy.1102