Brand evaluations: a comparison of fixed price and discounted price offers

Abstract

While fixed price offers are quite common in the marketplace, there is limited empirical evidence that documents the effectiveness of these offers in comparison to price discounting tactics. Drawing on information processing theory we provide a conceptual framework that explains the differential impact of fixed price and price discounting tactics. The empirical study shows that consumers’ perceptions of quality and value for the product were higher when price information was presented in a fixed format (versus a discount). Furthermore, perceptions of sacrifice were higher in the discount format than the fixed price format. Overall, this study finds empirical support for the notion that fixed price formats may be more effective than price discounts.