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Consumers choose BOGOF over bigger discounts

04 Jul 2012 10:22 BST Back
Consumers choose BOGOF over bigger discounts
DMA News

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Shoppers will choose buy one get one free (BOGOF) over an equivalent or higher discount because of a basic misunderstanding of maths and fractions, suggests a new study from The University of Minnesota’s Carlson School of Management, into attitudes to discounting.

Top line findings of the research reported in The Economist, show that in the majority of instances consumers prefer to get something free to getting something cheaper. 

In a retail experiment where researchers offered consumers the choice to purchase two packs of hand cream for the price of one or the same hand cream priced at an equivalent discount – 73% more of hand lotion was sold in the BOGOF offering. 

And the maths-blindness doesn’t stop there. The study showed that shoppers view a product that has been reduced by 20% and then by an additional 25% as more of a bargain that one which is being sold at a one-off discount of 40 %.

Mel Henson, retail copywriting specialist and author of Words that Sell suggests that alongside a basic fear of working out the maths, wording has a part to play. “Free is a powerful word and will always attract consumers’ attention,” she says. “There are also operational advantages to BOGOF, offering something at 50% off will incentivise people to buy, but they will only buy one, with BOGOF your consumers are buying two of your product at half price, which is better for volume sales and better for your bottom line.” 

The full study on consumer’s attitudes to discounting will be published in The Journal of Marketing.

Posted by Alison McClintock

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