The Situation

Recently while shopping with my Mother in Reliance Trends, I noticed a curious reaction of
hers towards the discount coupons that were being distributed by the store.
Reliance trends is a well-known retail outlet that has a good presence all over the country.
The store offers apparels, suits, dresses etcetera from well-known brands like 109 degrees,
denim. Being frequent visitors we proceeded straight to the tees department, without much
attention to other details. After the purchase we proceeded to the billing counter, to pay a sum
of around Rs.2500/-. It was then that the billing person informed us that we had qualified for
a discount coupon for Rs.1000/- on the purchase of Rs.2000/- or more from the next week.
Like all its competitor the store also conducts two yearly sale, one in autumn and the other in
winter. Therefore the coupons were quite unexpected and useless as well, since neither my
mother nor I had anymore shopping planed in the near future.
We were further informed that the Store was offering discount coupons of Rs.2000/- to every
customer on the purchase of Rs.4000/-. I was just confirming the purchase stating that we did
not wish to shop any more when my mother suddenly requested the biller to hold the bill, and
proceeded to shop for Rs.1500/- more.
This buying decision of my mother baffled me a lot and hence I decided to make this the
topic of my study.

Introduction:
1) Types of discounts
To understand this particular nature of consumer I first decided to understand the different
types of discounts offered by the stores to attract customers. A few types of discount offers
that can be commonly seen around us being used by the shopkeepers are as follows:1) 50% +20% off known as the percentage off or Rs. Off discounts.
2) BOGO (Buy One Get One Free) - generally a 25% discount, effective in moving
products.
3) Quantity Discounts - Discount valid only on purchase of a certain quantity of product.
4) Discount Coupons - Coupons can be redeemed at next purchase. Used to encourage
buyers to purchase again.

Literature Review
It is a common knowledge that Discounts attract consumers towards the product resulting in
increased sales for the shopkeeper, but how do different consumers react to the different
discounts that come their way is not a very common knowledge. A few of the papers that I
researched for my study gave deep insights into the nature and behaviour of the consumer.
They are as follows:
1) Discounts may lead to a consumers developing a self-concept about them called egoexpressive. Paying a low price for a particular item might lead a consumer to feel
proud, smart, or competent (Holbrook et al. 1984). There might be a sense of
accomplishment or a thrill of feeling of achieving a victory over large corporations.
This feeling of being a smart shopper motivates the consumer to purchase more and
that also at the duration of the sale or discount regardless of the requirement or not.
However the feeling of the being a smart shopper is not equally important for each
and every consumer. The paper goes on to say that this feeling is most important or
plays a dominant role in the lives of those consumers who, do not have sufficient roles
or responsibilities that might give them the satisfaction of being efficient and
competent. This requirement is satisfied by them being a smart shopper. Examples of
such consumes could be non-working mothers, retires could be another example. This
particular hypothesis has even been proved by (Narasimhan 1984; Kingsbury 1987)
and Bawa and Shoemaker (1987). There have been two theories put forth by each of
them for this particular nature:
a) Non-working women are more deal prone, because they have more time on their
hands.
b) Non-working women are more deal prone, because shopping forms a part of their
daily activities.
These discounts also have an implication for the retailers; first of all consumers rather than
optimising their purchase decision go for satisficing themselves. Of all the available items for
purchase their might be none to the liking of the consumer, or their might be a situation
where the consumer is stuck with two products where he cannot decide which to buy due to
the discount factor. The consumer does not out rightly likes the product but just to take the
benefit of the discount might purchase a product that is almost to his liking. This gives a huge

opportunity to the retailers to move their product which otherwise would have ended up in
their inventory.
2) Another interesting find was that though consumers are highly motivated by the
discounts that are offered on the product, they are not often convinces of the
discounted price; i.e. they discount the discounted prices. Though true for all the retail
stores, the level of discounting of price varies from store to store. This is a factor of
size of the store, the brand name of the store, the perception that the consumer may
have about the store. Therefore, a similar discount may not produce the same buying
motivation for two different stores.
An important implication for the marketers from this study is that competing on discounts
could be tricky for them. There are two major reasons for this:
1) The consumer might not perceive the shop to be at the same level as that of the
competitor, hence giving an equal amount of sale at the same time, may increase
the sale but will not meet its full potential. If the objective is of solely competing
then the true value of the shop must be determined and discounting must be done
as per the results.
2) If the shop is perceived inferior to the competitor, the shop might have to offer a
bigger discount. This might be matched by the competitor. Even if it is not,
discounting more will lead to higher stress on the margins and lesser profitability.
3) Another interesting find was that consumers reacted differently to different formats of
discounts even if they were giving the same value to the consumer. To understand this better
consider the following Discounts:
1) Rs 200 of Rs1000 tee.
2) A TEE worth 1500/- available for Rs.1150 /3) Buy a shirt worth Rs.1500 and get the second one @ 50% off.
A study conducted on similar lines revealed that most of the consumers thought that the third
one was a better deal, however, if proper number crunching is done it will be revealed that the
second is a better deal. The first one provides a discounts of 25% or less whereas the second
one provides a discount of 30%. On a more in-depth analysis it was found that the figures that
stare at the consumers faces is what affects their decision. Thus even the framing of discounts
can have a huge effect on consumer buying decision.

The marketing implication of this study is that though discounts do help in attracting more
customers, yet the way in which the discount is presented also has an effect on the customer
Hence the retailers must experiment with the framing of discounts and determine which one
is better for their product before taking out offers.

Back to the problem

After reading so many researches on discount it became a lot easier for me to discern my
mothers nature in the mall on the day. Initially I thought of my mothers nature as irrational,
wholly motivated by the huge discount offered. The reason being that if the discount is
critically reviewed, it is not a 50% discount but a 25% discount on the entire purchase.
Further there was no requirement for the products that were purchased due to the discounts
coupons.
However, after the reports above, I can confidently say that the following factors contributed
to my mothers purchase the other day:
1) Most of the products on sale were branded, and hence perceived of high value by my
mother. To be able to shop for them at a lower price than that available in the market
gave her the feeling of efficacy and competence and hence a smart shopper.
2) My mother being a home-maker could have brought the products because:a. Shopping efficiently is one of the activities that give her the feeling of
accomplishment and competence. The very fact that many non-working
women join social charitable causes also proves this point.
b. Shopping for the family is one of the dominant activities performed by my
mother, therefore she has a very good insight into the requirements of the
family on the long term basis. Hence seeing the sale she might have planned
ahead, and made the decision.
3) There was also a framing effect of the discount that came into the picture. The store
was actually offering a minimum discount of 25%. However the framing Rs.2000/- of
on purchase of Rs.4000/- made the offer look like a 50% off. This had a bigger
motivation on my mothers buying decision, than it otherwise would have.
After the purchase in reliance trends we came across a similar store Maxx. A similar kind of
sale was going on in the store. Just to test my mother, I jested with her to go for another
shopping spree. The answer startled me and left me further confused than before. She said
the clothes here are not from big brands, and none of them would be according to my

liking. At the time I pretty much concluded that my mother had spent enough for a day and
did not want to spend any more.
But that was not the case. In reality the clothes available in Maxx are less expensive when
compared to reliance trends. Also my mother did not perceive the material to be very fine as
compared to that of reliance trends. Therefore as per my mothers perception there was a
huge difference between the two stores. Thus the discount offer on Maxx was not sufficient to
motivate my Mother to go and purchase something, perhaps Maxx should have increased the
offer value, or decided to conduct the offer at some other time. This difference coupled with
the recent purchase led to the other buying decision.

Other Observations
During discounts many consumers end up satisficing rather than optimising is also true; I
witnessed this first hand, when I and my mother were trying to make a purchase for the rest
of the amount. We ended up buying a dress that both of though was good. Had it been some
other day, neither of us would have brought the products.

Discounts- the tool to sell all products at all times?

The answer to this could be answered by a very popular phrase: Too much of anything is
bad. Occasional discounts do increase the quantity of the products that are brought in the
discount period. This increases the revenue for the store for that period but frequent discounts
make the consumer to expect discounts, and they stop purchasing product in the normal
times. This can hardly be good for any store.
Frequent discounts also affect the trust a consumer places in a particular shop. If a shop gives
frequent discounts then the consumer may begin to think that the shop maintains a high mark
up, and hence products without a discount must not be brought from that particular shop.
Koutons suffered from such a problem and now are forced to sell all products at a discount.
Therefore marketers must use this tool strategically and make the most out of it.

References
1) Robert M. Schindler (1989) ,"The Excitement of Getting a Bargain: Some Hypotheses
Concerning the Origins and Effects of Smart-Shopper Feelings", in NA - Advances in
Consumer Research Volume 16, eds. Thomas K. Srull, Provo, UT : Association for
Consumer Research, Pages: 447-453.
2) The Discounting of Discounts and Promotion Thresholds Sunil Gupta and Lee G.
Cooper Pages 401-411
3) Lee, L. and Tsai, C. (2014). How Price Promotions Influence Postpurchase
Consumption Experience over Time. Journal of Consumer Research, 40(5), pp.943-959.
4) Manish Mittala & Poojae Sethi The Effectiveness of Sales Promotion Tools among
Indian Consumers: An Empirical Study Journal of Promotion Management Volume
17, Issue 2, 2011
5) Isabella, G., Pozzani, A., Chen, V. and Gomes, M. (2012). Influence of discount price
announcements on consumer's behavior. Revista de Administra\cc\~ao de Empresas,
52(6), pp.657--671.