As consumers, most of us love a bargain. But common wisdom also suggests that getting a discount can adversely affect our enjoyment of what we buy. For example, we may not appreciate a discounted chocolate as much, because the reduced price makes us less motivated to experience its delight to the fullest. Brand new research by Leonard Lee and Claire Tsai, about to be published in the Journal of Consumer Research, investigates these positive and negative effects. They show that enjoyment is not just a matter of getting a good deal or not, but also the timing of consumption. This is evident in a series of clever experiments involving hedonic products – chocolate truffles, music and orange juice.
In one of the reported studies, two groups of experimental participants used their own money to buy chocolates.One group of people were allowed to eat the chocolates immediately, the other group only after a one week delay. In addition, half of the people in each of the two experimental conditions had to pay full price ($1) for each truffle, while the other half were given a 50% discount. They were then all asked how much they enjoyed the chocolates. In the no-delay condition, chocolates were rated more highly when they were discounted than when they were bought at full price. When consumption happened a week later, the reverse occurred, as chocolates were enjoyed less when they were discounted.
Why this reversal? Further experiments with music and orange juice shed some light on this question. The answer, in a nutshell, is that enjoyment depends on how we feel and how much attention we pay to what we consume. The influence of mood and attention changes over time. In the case of immediate consumption, a discount’s feel-good factor is stronger than its negative effect on our motivation to pay attention to the consumption experience. When consumption is delayed, the good feeling has dissipated, but we’re still less likely to be mindful of our experience. Lee and Tsai illustrate this with the example of a vacation. A consumer who pays full price for a trip “may be more motivated to make the trip worthwhile by visiting more places of interest and paying closer attention to them during the visits than a consumer who receives a 40% discount for the trip.”
The results of this research do not suggest that consumers should spend more money by avoiding discounts or resorting to immediate gratification for discounted products. Rather, they should base purchasing decisions for products that are not for immediate consumption more on factors related to enjoyment than price discounts.
There are also some important implications for those who sell products. Past research in marketing has shown that discounts have a positive effect on short-term sales, but often do not lead to more repeat purchases or customer loyalty in the long run. For products consumed later, the negative effect of price promotions on enjoyment may at least partly explain this problem.
Lee, L., & Tsai, C. I. (2013). How price promotions influence postpurchase consumption experience over time. Journal of Consumer Research, http://www.jstor.org/stable/10.1086/673441.