Canadians Divided on the Authenticity of Sale Pricing

Posted on June 15, 2015

Queen’s School of Business study reveals retail promotions and sales create great happiness for consumers, yet many are skeptical about actual savings with the rise of the strategic consumer 

KINGSTON, ON - June 15, 2015 – The key to customer satisfaction lies in a good deal, reveals a recent survey commissioned by Queen’s School of Business. According to the survey, 91 per cent of Canadians say they receive “great happiness or pleasure” from a good sale or discount, yet when it comes to the sale itself, Canadians are divided on whether they are actually getting a deal.

Half of Canadian consumers (49 per cent) believe that they are saving money when a product is discounted, yet nearly the same fraction (45 per cent) believe stores inflate the regular price in order to discount a product.

“While the majority of consumers will be drawn to sales or discount pricing, the Internet has created an entirely new strategic consumer that companies need to be aware of,” says Yuri Levin, Queen’s School of Business professor and expert in dynamic pricing and revenue management. “The rise of social networking helps consumers share information and figure out pricing patterns; as businesses become more sophisticated, so too do consumers.”

Confusing Prices & Hidden Charges
Canadians feel that there are certain goods and services that end up costing more than advertised due to confusing pricing or hidden charges. Nearly two-thirds (63 per cent) of Canadians believe that mobile phone plans end up costing more than the discounted price quoted. Approximately half of Canadians feel the same way about airline tickets, automobiles, TV packages, and long distance/roaming phone charges.

“Transparency of pricing is perhaps the most immediate impact of the internet and social networking,” says Professor Levin. “Companies accustomed to practicing differential pricing now have their prices exposed either officially through their own Web sites or unofficially, through consumer networking. Customers are jumping the ‘fences’ that companies have carefully set up between market segments.”

Dynamic Pricing and the rise of the Strategic Consumer
The survey reveals that deal seekers are no longer focused solely on occasional big-ticket items, such as televisions and furniture, but are regularly comparison shopping on day-to-day items like groceries and household supplies (82 per cent). Furthermore, 89 per cent of shoppers who receive a good sale or discount say they positively communicate it to other individuals.

“Research has shown retailers that different customers will pay different amounts for the same or similar products,” says Professor Levin. “At the same time, it has also shown that consumers can resent differential pricing and regardless of their desire for achieving a good deal, the influence of the discount will be lost if consumers feel deceived in the process.”


Professor Yuri Levin can comment on the following:

• The results of surveys
• The science of pricing: understanding customer behavior and maximizing revenue
• Mark-down management: how retailers should implement markdowns and by how much
• The rise of the strategic customer and how companies need to respond
• How big data helps companies to micro-market sales to customers

About Queen's School of Business
Queen’s School of Business is one of the world’s premier business schools—renowned for exceptional programs, outstanding faculty and research, and the quality of its graduates. Canadian executives regard Queen’s as Canada’s most innovative business school, offering students academic excellence and a superior overall experience. Queen’s School of Business—where Canada’s first Commerce program was launched in 1919—is located at Queen’s University in Kingston, Ontario. The School also delivers programs at locations across Canada, as well in the U.S., the Middle East and North Africa (MENA) region and China.

Survey Methodology:
The survey was completed online between April 20 and 24th, 2015 using Leger’s online panel, LegerWeb, with a sample of 1516 Canadians. A probability sample of the same size would yield a margin of error of +/-2.5%, 19 times out of 20.

To arrange an interview or obtain additional information please contact:

Natasha Boeck 
Environics Communications

Amber Wallace
Queen's School of Business