EFFECTIVENESS OF PRICE DISCOUNT LEVELS AND
FORMATS IN SERVICE INDUSTRIES
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.