Direct discount on the price of a product is the type of promotion that harms brand image least programmatically.
Discounts are a tool to promote a brand or product, make it more attractive to the consumer and ultimately sell more.
But while it's a widely used tactic, it's also widely debated, and in recent years there's been a lot of talk that auctions can also be counterproductive for some companies' image.
Today, a new study published in the Journal of Advertising Research reiterates a recurring question: Are discounts good or bad for brands? The study, conducted by two researchers from the University of Dortmund, also examines the impact of different types of promotions on sales and brand perception. To do this, they considered both the sales figures of a high-end German car brand and information about consumer behavior.
They explain that “Price promotion is one of the most used tools by marketers and sellers to increase sales. It is characterized by reducing the price of a product or enriching a product by keeping the price constant.
. The first thing to notice is that the direct price reduction is the type of promotion that has the greatest impact on sales, which is not surprising, because a direct price reduction - or a gift to buy - is something very easy. More curiously, this type of promotion was also the one that would affect brand perception the least, compared to the same "disguised" discount based on the customer's prerequisites. it should only be done in contexts of indirect price reductions and with the objective of adding more value to the promoted product. In none of these cases are promotions harmful to the brand.
This is also true for premium brands, as the types of promotions most familiar to consumers (such as direct price discounts) minimize damage to the premium brand image. On the contrary, the new promotional formats, which aim to "hide" the discount, are not effective, as they negate the objective for which they were designed.
preferred by consumers
Another study on ATMs has already shown that the discounts that consumers value most are easy to understand. Customers don't want to go to the store to do calculations, or get discounts on their current purchases that they can't redeem until the future, or discounts that are subject to a set of conditions that they don't know if or not, are before to get home.
In the case of this report, it focused on the coupons that were most popular with consumers, being, in that order, those that offered a free item, those that reduced the price of an item by x, and those that offered 2 pt. 1.