How impactful were product discounts on customer questions?

Product discounts, or 'promotions,' are often available for purchase. With the many discounts, products may be offered at a lower price. However, these offers are only sometimes clear to all customers. To provide clarity, customers ask questions about their offer and expect the seller to take care of their concerns while offering them additional items for free in return for their loyalty. This will ensure that they return repeatedly and make your company an easy decision for future purchases.

Here is a more detailed explanation of how impactful customer product discounts were on customer questions. "Let's explore."

Price Sensitivity

Regarding price sensitivity, customers would enquire widely about different degrees of it. Remember, there are two different types of customers. Those who are willing to spend on one high-quality product in cases where producers equate quality with cost. The other type would boast more price sensitivity and consider less than the incumbent firm's price.

This means the discounted product would affect the customer's attitude because they would consider the brand equity negatively. So, some customers would ask whether the discounted product is quality. Is it worth buying? Yet others would feel like there was no correlation between quality and price. Therefore, positive-minded customers would ask more questions like;

How long is the time between their purchases and discounts when the difference between the two products is large?

Does the quality of the product fail when price sensitivity is high?

From these questions, customers would then perceive some degree of fairness in their purchasing behavior.

Note that the degree of customer loyalty towards a certain company's product also affects their attitude towards the discounted product. If their loyalty is high, they become more sensitive; if it is low, they would show less sensitivity.

Again, customers would show more sensitivity towards both temporary and permanent discounts. Before buying the discounted product, they would ask if the discount is permanent or temporary. If it is temporary, they would shy away from purchasing the product. Yet, if the temporary discount came with a significant value differential between the two products, they would buy it.

Since consumers are more likely to buy when they perceive a product to have an increased quality or utility value, a price increase would increase sales. However, sales would only decrease if it were just a price increase with a simultaneous increase in quality or utility.

Brand Awareness

How impactful were product discounts on customer questions when it comes to brand awareness? Well, brand awareness refers to how much the customer knows about a certain brand product. There is always a relationship between product discounts and brand awareness. For instance, when customers were more enlightened about discounts and made fewer purchases, the discounts greatly impacted their questions.

On the other hand, when they are very aware of the two products and would purchase both regardless of the price differences, any discount would be much less impactful on their questions. Again, customers with high brand awareness would give more credit to quality than price. Such customers are inclined to purchase based on quality rather than price. Any discount on the product would not greatly impact their questions.

However, customers who have low brand awareness would consider price even more than quality. So they would ask more questions to justify any discount on the discounted product.

Given that when it comes to brand awareness, price sensitivity would increase. This would make customers ask more questions than before before purchasing the two products.

For example, an alcoholic drink company producing products for purely female customers launched years ago and introduced a non-alcoholic drink in the market. Their main aim was to target women who never fancied alcohol. The brand was mainly targeted at women because it was a premium brand. So, their objective was to keep the overall merchandise price at a premium range. On the other hand, their products were well-rated by customers and became quite popular among female customers.

But the company's brand name would not significantly impact customer questions about the quality of its reduced-price product or any lack of confidence in its non-alcoholic drink. So, the impact on their customers' questions was very low.

This proved that the difference in price sensitivity would increase for customers aware of discounts on their products. This is a result of the fact that the quality of the product was not compromised by product discount. Thus, it would have a high impact on customer's questions.

Bargaining Power

Regarding bargaining power and discounts, customers' questions about price sensitivity also increase. That is because customers with very little bargaining power would not make purchases if they had doubts about the discounted products' quality. They would also most likely ask for discounts if the two products were in the same category: size, quality, and utility.

In this manner, discounts would impact them more than customers with high bargaining power. If the customer could not bargain for price sensitivity increased, then their purchasing behavior would more likely be unaffected by any product discount or price wars. But, if they had bargaining power, then any product discounts would have a severely negative impact on them.

How impactful were product discounts on customer questions clearly shows in this example? one such case is selling a food company's yogurt products at a discount. Before, the product's sales prices were $2.20 per unit, and then it went to $1.80 per unit. There was quite strong competition in this industry, and product sales were lower than normal. Hence, there was a price decrease to the mentioned level.

In this case, customers were unaffected by discounts or price wars because they had bargaining power. However, those who did not have bargaining power or would not make purchases at any of the given prices would ask various questions about product quality. Moreover, they would also become very sensitive to reduced-priced products.

Payment Method

Payment methods may affect the sensitivity of asking questions to customers about product discounts or price discounts. Customers with credit cards would ask more questions than cash or cheque customers. This is because credit card users could pay for the full price of the products and then get a refund from their bank.

But, when it comes to cash or cheque, customers with no credit card would be more likely to ask questions about the product discount. This resulted from the fact that they had to make payment in full and go without the product. Thus, there was just no benefit from any discounts for them. So, they would not ask any questions about that either.

This is a unique case because many people still need a credit card and yet pay the full price of a product anyway. Thus, they would be more sensitive to discounts because they had no bargaining power.

Region/Regionality

Country-wise differences would impact customers' questions about product discounts or price discounts. For example, if a country was relatively affluent and price-conscious, customers would be more likely to ask questions about product discounts or price discounts than those in the country who were not as well off or as price-conscious.

This is because customers in a country well off and with a high purchasing power would only be bothered a little about discounts. But, those in another country with more problems faced in their daily life would be more likely to ask questions about product discounts or price discounts.

On the other hand, customers living in a poverty-stricken region would also feel stiff due to needing more money and thus be more sensitive to product or price discounts.

Household Income

Household income would greatly affect how customers would ask questions to justify product discounts. It is because some countries were very price-conscious, and high-income countries tended to be satisfied with the prices of their products. Hence, any company discounts were likely to affect them little.

But, in some countries where there were fewer wealthy people, the prices of products were much lower than in high-income countries. Thus, they would be asking more questions about any discounts or cost versus quality of products.

Moreover, if there were no products intended for costlier customers, then the companies would lower the prices of their other products to have a greater market share. This means they could have a greater market share in those countries where their consumers had lower purchasing power.

Gender

Gender would also play a significant role in asking questions about product discounts. For example, it was seen that women would be more sensitive to price discounts than men. This is because they were more concerned about their husbands' impatience and ensuring the quality and utility of products for their families. So, it was very likely for them to ask questions about price discounts or product quality if they were given any discounts.

So, women were more aware of the benefits of having discounts and were more sensitive to them than men. Thus, companies offering discounts would have a greater market share in the hands of women customers.