Consumer Reaction To Conditional Rebate On Purchase Of Apparels From Retail Stores In Lucknow

Abstract

This paper aims to investigate into the reaction of consumers on purchase of apparels when conditional discounts prevail in the market. When a deal is presented with a price discount or a conditional spending requirement, the experimental studies have shown consumers tent to spend more to avail the benefits of the discounts. Conditional discounts have been classified into three different types, buy 1 get 1 free, cash back facility and fixed amount discount. To study this behaviour research was conducted among the consumers in Lucknow to examine how they make their purchase decision with respect to such discounts. Also, how brand loyal consumers react to conditional discounts in the market.

The study shows that deal-prone consumers are induced to overspend. On comparing the three types of discounts it is seen that percentage discount outperforms the buy 1 get 1 free and cash back facility. Conditional discounts adopted by the sellers lead to overspending by the buyers over what would have been spent when the prices were normal or the market price which eventually benefits the seller. Furthermore, it was also found that conditional discounts improve consumer welfare and satisfaction leading to a win-win situation for both the buyers as well as sellers.

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