Sustainably Produced but Unsustainably Destroyed: Effective Price Promotion for the Sustainable Management of Unsold Inventory in Korea

Abstract

Focusing on sustainable fashion brands’ effective price promotion, this experimental study developed two sets of stimuli, ‘discount’ and ‘disclosure’ strategies, and tested consumers’ evaluations of price fairness, product attractiveness, quality, and brand trust based on each strategy. Subsequently, this study compared consumers’ evaluations of the discount and disclosure strategies. An analysis of 961 Korean samples revealed that a high discount rate increased price fairness and product attractiveness, and the highly promotion-focused consumers were more likely to perceive product attractiveness and quality when positive framing was presented. In the disclosure strategy, the reference point effect was prominent; when the conventional markup rate was provided, consumers showed greater price fairness, product attractiveness, and brand trust. Furthermore, it was noteworthy that disclosing conventional markup along with the firm’s markup showed the same price fairness perceptions as that of a high markup rate. Built on reference point and regulatory focus fit, this study empirically proved the effectiveness of the price promotions of sustainable fashion brands to whom quality and trustworthiness are greatly important, extending the academic originality of this study. Practically, effective use of price promotion strategies can help fashion management handle inventory problems in a sustainable way without massive investment in technologies.