Effectiveness of monetary discounts: comparing quantity scarcity and time restriction

Abstract

Purpose: This study aims to examine whether adding a quantity scarcity message to a monetary discount helps to improve consumers’ offer-related perceptions and intentions, and how the effectiveness of that message compares with adding time restriction to the offer. Design/methodology/approach: Two experiments, where participants evaluated retail ads and responded to relevant measures, were conducted in two country markets. Findings: Adding either a quantity scarcity message or time restriction to a monetary discount increases the potency of a retail offer. Further, when an offer ad emphasizes product and price-related cues in a balanced manner, time restriction results in more favorable consumer perceptions than scarcity. However, this difference in the messages’ efficacy disappears when the offer strongly emphasizes price-related cues. Research limitations/implications: The US market sample is more homogeneous than the Indian one. Discounts were presented in terms of advertised reference prices; further research with other discount formats is desirable. Practical implications: Understanding the relative efficacy of quantity scarcity message and time restriction in discounted retail offers can give managers flexibility in the use of these tools. Originality/value: This paper addresses scholars’ call for theory-grounded research that provides guidance to retailers on the use of sales promotional tools.

Publication Title

Journal of Consumer Marketing

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