Effectiveness Of Price Discount Levels And Formats In Service Industries | Hsin-Hui “Sunny” Hu HG Parsa Maryam Khan

Price promotions are an integral and essential part of marketing in the service industry. Most service firms often depend on price discounts as pull strategies. However, effectiveness of type of formatting and levels of discounts while using price discounts is least understood. Results from the current study indicated that the consumers? perceptions of the format of price discounts (dollar off and percentage off) are significantly different for high-end and low-end services. Moreover, consumers perceive discount levels differently depending on high and low-end services. The differences between dollar format and percentage format over different discount levels are more consistent in the high-end services but not in the low-end services. Finally, industry effects are significant across the types of discount formats and discount levels. Hospitality firms are different from non-hospitality firms at the high-end and at the low-end. This paper presents a discussion of these differences.