Identifying effectiveness of volume increase/cost discounts across utilitarian and hedonic products

Abstract

Motivation – We wondered in a marketing environment, where offers have become an everyday norm which of the two offers – “ 20% extra volume” and the like vs “20% off” on the MRP will be more effective to increase the purchase intention of the customer & hence we decided to take this topic up for our project study. Process – We made three surveys each for Normal item, discounted item & volume excess item and surveyed customers about their likeliness to buy each of these three products. We also asked them about brand loyalty to eliminate confounding effects. We repeated this process for both hedonic & utilitarian product categories Findings – We found that for utilitarian products offers like Volume increase work better for categories like detergent and in for hedonic products like chips also the offers like Volume increase work better. When we tested chocolates under hedonic category however, we found that cost discounts work better. For the utilitarian item shampoos, we found that there is no effect of any offer on the purchase intention.