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Prof. Haiyang Yang
Associate Professor of Marketing
Johns Hopkins Carey Business School
Johns Hopkins University

ABSTRACT

How can brands make quantity discounts more attractive to consumers? This research proposes that, instead of providing only a target quantity discount (e.g., regular price: $6.99 each; buy two: $5.59 each), offering it along with an additional tier of discount (e.g., buy one: $6.79 each) can increase the likelihood that consumers take up the target quantity discount. This pattern occurs because the inclusion of the additional discount tier can lead consumers to perceive the target discount price as lower. Through a series of studies involving different consumption contexts, product categories, price points and discount levels, this research demonstrates the proposed effect, an underlying mechanism and key boundary conditions.