The discount framing in different pricing schemes: Combined versus partitioned pricing

Abstract

Pricing is one of the most sophisticated and critical issues which managers have to face. It is obvious that managers have been undervaluing the behavioural and psychological perspective of pricing for many years. With a clear understanding of behavioural pricing, managers are able to make extra profit for their firms. In the current study, I was interested in investigating exactly how manipulation of discounts in the combined pricing scheme and partitioned pricing scheme affects the purchase decisions of consumers, such as consumers' purchase intentions, value perceptions and motivation to purchase. In the experiment of this paper, the four scenarios were based on different pricing schemes and price discount framing, namely Combined/Non-discounted condition, Combined/Discounted condition, Partitioned/Non-discounted condition and Partitioned/Discounted condition. The ultimate goal of this study is to provide further insight for managers so as they can identify and understand consumers' reactions from psychological and behavioural perspectives under different pricing schemes, as well as how consumers frame price discount in order to ethically capture additional profit from their businesses.