The effect of various price markdowns on consumers' ratings of a new product
Hershey H. Friedman Ph.D., Linda W. Friedman M.S., Phillip E. Weingarten M.Ph., Ralph Gallay Ph.D.
Journal of the Academy of Marketing Science · 1982 · Volume 10 · Issue 4
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.
Keywords
Contrast Effect, Purchase Intention, Reference Price, Selling Price, List Price
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