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Introducing new products through pre-order price promotions is a time-honored strategy, but how deep should those discounts be and what factors induce consumers to make the leap of faith needed to plunk down money for a brand-new model? A trio of researchers provides some answers in "Regular Price $299; Pre-order Price $199: Price Promotion for a Pre-ordered Product and the Moderating Role of Temporal Orientation," appearing in the Journal of Retailing's March 2017 issue.
Marketing Professors Amaradri Mukherjee and Ronn J. Smith of the Walton College of Business at University of Arkansas and Subhash Jha of the Indian Institute of Management in Udaipur explored how consumers with different mindsets react to pre-order price promotions. Specifically, the authors designed a series of studies to assess the purchase behavior of people who were future-oriented versus those who focused on the present and to gauge how third-party ratings might also affect their buying decisions.
Studies - Discounts - People - Skepticism - Buyers
Their initial two studies showed that deep discounts appealed more to present-oriented people but appeared to generate skepticism in more future-minded buyers. In a third study, the authors probed the ratings factor through a mock advertisement for a new smartphone that was to be released in one week. Both small and...
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