The effect of discount discrepancy on purchase intention: the moderation of justification

Abstract

Purpose This paper aims to clarify the effect of discount discrepancy (DD) on consumers’ purchase intention (PI). The authors propose, test and provide evidence and explanations about the moderation of justification in the relation between consumers’ perceived DD and PI. Design/methodology/approach The authors conducted three experimental studies with a 2 × 2 factorial design, focusing on consumers’ processing of price discounts. Participants were informed that this study aimed to gather opinions on fashion, clothing and retail sales promotions. They accessed the questionnaire via Qualtrics. Each participant took part in only one study. The experimental conditions were manipulated through scenarios. Findings Study 1 tested and supported the moderation of justification on the effect of DD on PI. Study 2 tested and supported the moderation of the type of justification for the effect of DD on PI. Study 3 confirmed the findings in Study 2 and revealed the more effective type of justification. Research limitations/implications The authors focused on a typically hedonic product category (fashion clothing). Further research should include a wider variety of goods and services, which could lead to different explanations or generalizations. Practical implications Sales promotions must refrain from generating DD between the initial price discount and the subsequent smaller discounts. Practitioners must evaluate the gains of an initial, more considerable percentage discount to attract consumers to the store and sell them other products versus the cost of losing sales because of DD. Management should recognize the importance of giving the correct justification for perceived DD, aligning the firm’s justification with the consumer’s motivation to buy the product. Social implications The authors offer subsidies for effective consumer protection policies. Originality/value By studying the influence of justification on the effect of DD on PI, the authors propose a mechanism that would reduce the negative effect of DD on consumers’ PI.