Fogelman Professor and Student publishes a paper on Pricing in Journal of Retailing
For release: November 28, 2012
Balaji Krishnan, Associate Professor of the Department of Marketing & Supply Chain
Management in the Fogelman College of Business & Economics, along with Subhash Jha,
a visiting scholar from IBS Hyderabad and Sujay Dutta, Associate Professor of Marketing
at Wayne State University, Detroit, MI, have a forthcoming article on pricing titled
"Effectiveness of Exaggerated Advertised Reference PRices: The Role of Decision Time
Pressure," in the Journal of Retailing.
In this paper they argue that there is a prevalence of exaggerated discounts such
as "Upto 70% off" in retail ads. This leads to misleading consumers and making them
vulnerable to deceptive advertising. This paper demonstrates that such exaggerated
discounts are more effective in influencing consumers' perceptions of retail offers
when they feel time pressure. Further, it also demonstrates that even when advertisers
offer such discounts frequently, the consumers' are more likely to purchase products
if they are presented with a time pressure to make buying decisions.