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The effect of various price markdowns on consumers' ratings of a new product

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Abstract

The purpose of the current study was to determine whether the magnitude of a price markdown affects consumers' purchase intentions and/or price perception. Four groups of subjects were all shown a brochure for a new TV video game selling for $49.95. Three different list prices were used: $200, $100, and $75. A fourth group, the control, was shown only the selling price. The results of the experiment indicated that the group shown the $200 list price (i.e., a 75% markdown) had greater intent-to-purchase the product than did the control group. There were no differences among the groups with respect to price perception.

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Authors and Affiliations

  1. Fordham University, New York, USA

    Hershey H. Friedman Ph.D. & Phillip E. Weingarten M.Ph.

  2. Baruch College, New York, USA

    Linda W. Friedman M.S.

  3. Rider College, USA

    Ralph Gallay Ph.D.

Authors
  1. Hershey H. Friedman Ph.D.
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  2. Linda W. Friedman M.S.
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  3. Phillip E. Weingarten M.Ph.
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  4. Ralph Gallay Ph.D.
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Friedman, H.H., Friedman, L.W., Weingarten, P.E. et al. The effect of various price markdowns on consumers' ratings of a new product. JAMS 10, 432–437 (1982). https://doi.org/10.1007/BF02729345

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  • DOI: https://doi.org/10.1007/BF02729345

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