Brand choice and deep price discounts

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Abstract
Whenever price is presented in a discount format it can perform an informative role in brand choice. This article postulates the occurrence of an “attribution” process to account for the possibility that a very deep price discount produces a decrease in the desirability of the discounted brand under choice conditions involving unfamiliar brands and/or discount store (as opposed to department store). Hypotheses derived from the theoretical analysis are tested in a laboratory experiment. The results of the study support the proposition that the desirability of a discounted unfamiliar brand does not continue to increase as the size of the price discount increases. Predictions concerning the effects of store type and size of price discount were not confirmed. The article concludes with a brief discussion of the implications for marketing management.

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