Purchase intent is considered an important construct in marketing

Purchase intent is considered an important construct in marketing. It refers to the degree of perceptual conviction of a customer to purchase a particular product. There are numerous studies that examined the impact of price discounts on consumers’ purchase intentions. For example, Folkes and Wheat (2013) in two experiments examined how perceptions of various framing types of promotions significantly affect consumers’ price perceptions. Their study found that offering the same product with a coupon lowered consumers’ perceptions of price to a larger extent than offering it in the form of a rebate in the context of a sale. Additionally, Raju and Hastak (2012) investigated the impact of the deal’s magnitude on the consumer’s purchase intention. According to them, coupons appear to function as an effective distracting element that might send a negative image regarding the brand. According to Chen et al. (2014) the presence of framing promotions affects purchase intentions.
Research has shown that there is heterogeneity in consumer knowledge of prices and deals. In addition, it has been found that buyers’ purchase behaviour can be influenced not only by the current price of a product, but also by what prices they expect in the future. The author builds a purchase quantity model to contrast normative behaviour of consumers who have knowledge of future price deals with that of those who do not. Implications from the model are derived concerning consumer deal response for the consumer’s preferred and less preferred brands. These implications show that normative purchase behaviour is very different between
With the freebies and discount culture spreading widely in the Zimbabwean
microfinance context, brands should take into consideration the possible implications
before embarking on a discount strategy either for the long or short term. Price discounting
not only affects the profitability of brands but also the equity of the concerned brand. For
example, the kind of impression that would be conveyed to consumers when two major
brands of detergents cut their prices by significant levels is an important implication from the
viewpoint of marketing, Kumar (2013). Chen, Monre and Kou (2012) and Koekemoer, (2014) postulate that a price reduction or price off is a reduction in the brand`s normal regular price. The others share the same notion that a price discount is a short term reduction of the listed price of a service or product when buyers are equally eligible for the price reduction. Straydom, et al, (2016), and Koekemoer,(2014) have the same perspective on the benefits accrued by both parties thus the marketer and the consumer. The marketer establishes a repeat purchase pattern after an initial trial. Stoner, Freeman and Gilbert (2013) differ in their perspective of sales promotion price-offs, the authors are of the opinion the effectiveness of a national price reduction strategies require the support of all intermediaries.
Service products require a systematic scheme of setting the price off in order to avert from
possible negative consequences in the long run, for example brand switching. Shi, Cheung
and Prendergast (2015) postulate that price discounts have a short term effect on sales
promotion which can be elaborated by a “sale bump”, both brand-loyal and non-loyal buyers
responds to a discount promotion. The effects of a price off on sales promotion are explained further by an analysis of baseline sales, incremental sales, and sales promotional lift. Estimates of baseline sales establish benchmark for evaluating the incremental sales generated by specific marketing activities. This baseline also helps isolate incremental sales from the effects of other influences, such as seasonality or competitive promotions.
Massy and Frank (2013) cited in Hoek and Roelants (2015) investigated the short term effects
of temporary price discounts and found that both brand-loyal and non-loyal buyers responded
to a discount promotion. Hinkle (2015) argued that a brand’s age may influence the extent to
which a price discount can increase its share. He postulated that price discounts were
most effective with new brands, which tended to achieve higher gains with smaller price
reductions than more established brands. Dodson,Tybout and Sternthal (1978) cited in Hoek
and Roelants(2015) corroborated Hinkle’s findings and concluded that price discounting
increased the market share of the promoted product, at least in the short term. Furthermore they suggested that a high discount led to a greater increase in market share than a low
discount. Although the short-term effect of a price promotion is almost invariably measured by its increase in sales, over longer periods management becomes concerned about the percentage of sales on deal and the percentage of time during which a product is on deal. In some industries, list price has become such a fiction that it is used only as a benchmark for
discussing discounts.