Effect of price-discount distribution in multi-unit price promotions on consumers' willingness to pay, sales value, and retailers' revenue

Faical Akaichi, Rodolfo M. Nayga, Jr, José M. Gil

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

Using multi-unit auctions, we examined the effect of different distributions of price discount across multiple units of a relatively new product on consumers' Willingness to Pay (WTP), sales value and retailers' revenue. We found that allowing the price discount to be increasing in the number of units increases willingness to pay, sales value and retailers' revenue and that a price discount that is uniformly distributed across units also has the potential to motivate consumers to buy more units of the product. However, multi-unit price promotions that concentrate all the amount of price discount on the last unit only generate a weak positive effect on sales value.

Original languageEnglish
Pages (from-to)14-32
Number of pages19
JournalAgribusiness
Volume31
Issue number1
DOIs
Publication statusPublished - 2015 Jan 1
Externally publishedYes

Fingerprint

willingness to pay
sales
revenue
income
promotion
Values
auctions
auction
new products
concentrates
distribution
effect
price
Price discount
Price promotions
Retailers
Willingness-to-pay
Revenue
product

ASJC Scopus subject areas

  • Agronomy and Crop Science
  • Economics and Econometrics
  • Food Science
  • Animal Science and Zoology
  • Geography, Planning and Development

Cite this

Effect of price-discount distribution in multi-unit price promotions on consumers' willingness to pay, sales value, and retailers' revenue. / Akaichi, Faical; Nayga, Jr, Rodolfo M.; Gil, José M.

In: Agribusiness, Vol. 31, No. 1, 01.01.2015, p. 14-32.

Research output: Contribution to journalArticle

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