In the world of shopping, there’s something undeniably exciting about finding a great deal. The allure of sales has captivated consumers for decades, and it continues to be a driving force behind purchasing decisions. This phenomenon extends beyond just the price tag; shoppers are more inclined to try a product when it’s on sale. If you are a consumer packaged goods (CPG) manufacturer and interested in creating coupon and/or rebate promotions, MPS can handle all of the work for your business while you focus on growth. Here are the a few reasons why sales, such as coupons and rebates are a powerful marketing strategy for your business.
- Cost-Savings and Value Perception:
One of the primary reasons why shoppers prefer trying products on sale is the desire to save money. The allure of a discounted price tag creates a perception of value, making the product seem more attractive. Consumers feel a sense of satisfaction when they believe they are getting a good deal, and this can positively influence their perception of the product’s quality and worth.
A study published in the Journal of Marketing Research by Nunes and Boatwright (2004) explored the influence of price on consumers’ perceptions. The researchers found that when a product is on sale, consumers tend to perceive the product as being of higher quality and value for money. This perception of value makes shoppers more willing to try the product, even if they were initially unsure about it.
- The Fear of Missing Out (FOMO):
The fear of missing out, or FOMO, is a powerful motivator for consumers. When a product is on sale, shoppers may feel a sense of urgency and pressure to take advantage of the limited-time offer. The fear of missing out on a good deal can push individuals to try a product they might not have considered under normal circumstances.
A study conducted by Cheema and Soman (2008) and published in the Journal of Consumer Research explored the impact of time-limited promotions on consumer behavior. The research revealed that consumers are more likely to try a product when they believe that the opportunity is scarce and time-sensitive. Sale promotions tap into this psychological phenomenon, prompting shoppers to make purchasing decisions they may not have otherwise made.
- Risk Mitigation:
Trying a new product can be risky for consumers. There is always a possibility that the product may not live up to their expectations, resulting in disappointment and wasted money. However, when a product is on sale, the perceived risk associated with trying something new diminishes.
According to a study published in the Journal of Retailing and Consumer Services by Kim, Park, and Forney (2017), discounted prices positively influence consumers’ perceptions of risk and the likelihood of trying new products. The researchers found that when products are on sale, consumers feel that the cost of trying something new is lower, thereby reducing their perceived risk. This risk mitigation factor encourages shoppers to take the plunge and try the product, knowing that they are getting a discounted price.
Understanding the underlying psychological and economic factors that make discounted products more appealing allows consumer packaged goods (CPG) companies to leverage this knowledge in their strategies. By using MPS, Inc. and our online portals, businesses can effectively utilize sales promotions, attract hesitant consumers, increase trial rates, and potentially convert them into loyal customers. Also, by partnering with Milano Promotional Services, we will make sure every coupon is accounted for with fraud being our #1 priority.