Prices: What Discounts Do Consumers Prefer?

Discount promotions expressed in percentage terms rather than absolute values are typically those that consumers prefer when analyzing available purchase options.

Friday, July 26, 2019

Ariel Baños, a price management specialist and founder of, explains how consumers value discounts more, depending on how they are expressed in promotions at sales points and in advertising spaces.

Explains Baños: Suppose we have the opportunity to save $50 on our next purchase, and to achieve this, it is necessary to go through different businesses in search of the most convenient prices.

This savings opportunity will be much more likely to be taken advantage of if our goal is to buy a $10,000 ($200) television than if it were a $10,000 ($10,000) car. Why?

In the first case, the magnitude of "perceived savings" is 25% ($2,500 over $10,000), while in the second case it is "only" 0.5% ($2,500 over $500,000). As can be seen, in both situations the "pocket savings" is exactly the same: $ 2,500 (50 dollars).

In objective terms, and based on economic rationality, saving in money is equivalent, so the consumer should react in the same way, looking for savings or ignoring the opportunity, in both cases. However, in fact, there are more people who would seek savings in the first situation and not in the second.

How do you explain this situation? In practice, consumers prioritize the magnitudes of discounts in percentage terms when analyzing purchasing alternatives. This percentage indicates "perceived savings". However, the actual effect on the customer's budget would indicate that the relevant value is simply the difference in money: $50 is still $50, discounted from the price of a television, a car, or a luxury yacht.

See full publication at

Do you need more information about your business sector?

Request more information:

this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423

More on this topic

Prices: Intelligent Strategies to Improve Profitability

June 2019

Applying segmentation techniques, making comparisons with the prices of other products, and applying discounts to customers who have eco-friendly practices are some of the strategies that can help maximize the sales profitability.

Ariel Baños, a price management specialist and founder of, explains how simple techniques completely applicable to any business can be turned into intelligent and creative pricing strategies to maximize profitability.

Prices: Are There Several Ideal Margins?

April 2019

Because not all customers value the same proposal equally or are willing to pay for perceived benefits, sometimes the same product can have multiple ideal margins.

Ariel Baños, price management specialist and founder of, explains how there are myths about the "ideal margin" and what are the ideas to overcome these misperceptions.

Keys to Stop Competing for Price

April 2019

Identifying a segment that values the differentials of the product or service and charging a price aligned with the company's strategy are essential to avoid competing with the lowest prices in the market.

Ariel Baños, specialist in price management and founder of, explains how through the implementation of an appropriate strategy, it is possible to compete in a market where there are suppliers who charge derisory prices.

Pricing and Gender Equality

March 2019

Gender equality also has its space for discussion in relation to companies' pricing strategies.

Ariel Baños, price management specialist and founder of, explains the impact of price differences by gender and recommendations to avoid polemics between companies and consumers.

 close (x)

Receive more news about Marketing and Sales

Suscribe FOR FREE to CentralAmericaDATA EXPRESS.
The most important news of Central America, every day.

Type in your e-mail address:

* Al suscribirse, estará aceptando los terminos y condiciones

Organization that operates in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.
Phone: (0341) 156022290

Company Profile

Stock Indexes

(Apr 6)
Dow Jones
S&P 500


(Oct 26)
Brent Crude Oil
Coffee "C"