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The Boomerang Effect of Online Low Discount: The Moderation Effect of Product Price and Category Interaction

DONG Xiao-song,LIU Ting-jie   

  1. (School of Economics & Management, Nanchang University, Nanchang 330031, China)
  • Received:2019-06-01 Online:2019-11-12

Abstract: Low discount boomerang effect is an important factor affecting consumers′ purchase decisions. Some businesses think that price reduction is an effective way to improve product sales, so that the actual effect goes against their wishes.Based on the data of 3626 users′ consumption behavior in China Telecom Wing payment platform, this paper empirically tests the boomerang effect of low discount on the sales of non necessities of life, and the moderation effect of online environment, product price and search products on the relationship between them.It is found that the boomerang effect of low discount exists widely in the online and offline environment of non essential consumption. Within the 15% discount level, there is a significant “U” shaped curve relationship between discount rate and product sales, while the online environment significantly strengthens the boomerang effect; both the product price and the product type significantly weaken the online boomerang effect of low discount, and the research conclusion remains unchanged after considering the self selection problem of the research sample.These conclusions broaden the research boundary and application scope of the relationship between low discount level and product sales, enrich the theoretical research on boomerang effect of low discount, and provide new empirical evidence for the price promotion strategy and channel selection strategy of marketing managers.

Key words: low discount, boomerang effect, online environment, product price, product type