The effects of multiple discounts on consumers’ product judgments

The concept of multiple discounts refers to the situation when two or more discounts are combined together resulting in a discount larger than any of the individual discounts. Despite the increasing popularity of this practice in the marketplace, past research provides little evidence about the relative effectiveness of such discounts. For instance, compared to single discounts, offers using multiple-discounts generally require more cognitive effort by consumers to process price information. This research presents a conceptualization that explains the effect of multiple discounts on consumers’ evaluation of discount offers by examining the economic, informational, and affective dimensions of such discounts. A set of hypotheses were developed regarding multiple discounts’ effect on consumers’ perception of savings and product quality, compared to an economically equivalent single discount.Two experimental studies investigated the way that double discounts affect product evaluations. Participants who encounter price information along with discount(s) information evaluated perception of savings, product quality, monetary sacrifice, and value. The following are some major findings:1. The product’s price level may motivate different evaluation processes of the double discounts. Specifically, participants seemed to rely more on the anchoring-andadjustment heuristic when the price level is high, which results in lower perceptions of savings with double discounts than with a single discount. When the price level is low, participants process the double discounts information more thoroughly and hence no difference on perceptions of savings was found between a single discount and double discounts.2. Double discounts interrupt the price-perceived quality linkage by making the price information more complex and harder to process. In contrast, a single discount still maintains a positive relationship between price and perception of product quality. Therefore, a high price point led to higher perceptions of product quality than a low price point.3. Emotional reactions partially mediated the effect of discount format on perceptions of savings, especially for hedonic products. Double discounts created lower positive emotions than a single discount, which led to lower perceptions of savings.