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Comparing the effectiveness of fixed and discounted prices in the US and South Korea

Comparing the effectiveness of fixed and discounted prices in the US and South Korea Building on research that has studied cultural differences between South Korea and the USA, the authors' conceptualization suggests that products associated with fixed and discounted price formats would be evaluated differently in these two countries. The differences in product evaluations were expected to lead to differences in perceptions of quality, monetary sacrifice and value of offers between the two pricing formats. These predictions were tested using laboratory experiments conducted in South Korea and the USA. Results showed that Korean subjects’ evaluated a product that was discounted in price to be superior in quality and value and lower in monetary sacrifice than when it was the full price. The US subjects however, reacted in an opposite manner and evaluated products with discounted prices as inferior in quality and value in comparison to a fixed price. These findings were robust across two discount conditions (15 percent and 20 percent off). http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Retail & Distribution Management Emerald Publishing

Comparing the effectiveness of fixed and discounted prices in the US and South Korea

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References (44)

Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0959-0552
DOI
10.1108/09590550410538033
Publisher site
See Article on Publisher Site

Abstract

Building on research that has studied cultural differences between South Korea and the USA, the authors' conceptualization suggests that products associated with fixed and discounted price formats would be evaluated differently in these two countries. The differences in product evaluations were expected to lead to differences in perceptions of quality, monetary sacrifice and value of offers between the two pricing formats. These predictions were tested using laboratory experiments conducted in South Korea and the USA. Results showed that Korean subjects’ evaluated a product that was discounted in price to be superior in quality and value and lower in monetary sacrifice than when it was the full price. The US subjects however, reacted in an opposite manner and evaluated products with discounted prices as inferior in quality and value in comparison to a fixed price. These findings were robust across two discount conditions (15 percent and 20 percent off).

Journal

International Journal of Retail & Distribution ManagementEmerald Publishing

Published: Jun 1, 2004

Keywords: International pricing; National cultures; Research; United States of America; Republic of Korea

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