Monetary discounts, metaphoric communication and mass prestige based branding: a comprehensive assessment

Purpose This study aims to examine the role of price discounts and how to communite such discounts for masstige brands. While a price discount might encourage potential (first time) customers seeking higher status to buy a masstige brand, it might deter existing (repeat) customers from purchasing the brand due to a decline in perceived status. Such paradoxical effect of price discounts on masstige brand’s purchase requires a detail investigation into whether masstige brands should offer price discounts and if so, how to communicate such discounts. Current research investigates this phenomenon. Design/methodology/approach Four experimental studies were executed. Study 1 investigated the impact of monetary discount (absent vs. present) on the purchase intention of masstige brands for different customer types (potential vs. existing). Study 2 investigated the mediating role of perceived status. Study 3 examined the effectiveness of metaphoric communication of monetary discounts (absent vs present) on masstige brand’s purchase. Study 4 tested the moderating effect of customers’ need for cognition. Findings Overall, monetary discounts positively affect purchase intention of masstige brand; however, the effect is negative for existing customers and positive for potential customers owing to differences in perceived status these customer groups experience (positive for potential and negative for existing customers). Metaphoric communications of monetary discounts restrict the declining purchase intention and status perception of existing customers besides keeping the potential customers’ purchase intention intact. Research limitations/implications This research is confined to a particular country limiting the gneralisability of the study’s findings. Furthermore, this research is cross-sectional in nature. Practical implications The findings of this research provide valuable insights and actionable recommendations for masstige brands to effectively leverage price discounts, especially in the emerging markets. Originality/value To date, a question of whether or not masstige brands should offer price discounts and if so, how to communicate such discounts remain opaque. This is the pioneering study exploring this phenomenon.