The effects and mechanism of discounting unit price
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(Published version)
Date
2024
Authors
Khan, H.
Saeed, M.R.
Bellman, S.
Lee, R.
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Journal article
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European Journal of Marketing, 2024; 58(8):1941-1967
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Abstract
Purpose: Supermarket promotions typically use a standard label, which displays the regular price, discounted price and discounted unit price. Visits to supermarkets across multiple countries found that none used a price label that also contains the regular (i.e. pre-discounted) unit price. This study aims to investigate the effectiveness of a dual unit-price label that includes the regular unit price as a reference price, and what underpins its efficacy in enhancing promotion attractiveness.
Design/methodology/approach: The authors executed four studies, supported by three supplemental studies. Study 1 established external validity through a natural instore experiment. Studies 2 and 3 tested the dual unit-price label with different pack sizes and assortment sizes, respectively. Finally, Study 4 tested the underpinning mechanism of the efficacy of the dual unit-price label.
Findings: In Study 1, daily sales records over four weeks showed that dual unit-price label promotions had larger sales volume than standard-label promotions. Study 2 showed a larger pack size, a heuristic cue for greater economy and increased preference for dual unit-price label promotions. Study 3 similarly found that the dual unit-price label was preferred more as cognitive load was increased by assortment size. Finally, Study 4 demonstrated the dual processing of the dual unit-price label, using a conscious preference measure (information provided) and an unconscious implicit attitude test.
Research limitations/implications: Unit-price research has mainly considered a cognitive process. The authors demonstrated the importance of considering a heuristic process.
Practical implications: Supermarkets can use this simple and yet effective tool to improve promotion effectiveness.
Originality/value: This study demonstrates that the dual unit-price label is a new and easy tool to enhance sales promotions, which academic research and managerial practice had never considered previously.
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Copyright 2024 Emerald Publishing
Access Condition Notes: Accepted manuscript is available open access