Posted by Bob on July 19, 2003
In Reply to: Deal depth? posted by ESC on July 19, 2003
: : Looking for the meaning of "Deal Depth"
: I don't know. From a paper online, it looks like it is a business term that means the percentage of the "deal" or discount a customer gets. Maybe someone else can explain further.
: Effects of dealing patterns on consumers' internal reference ...
: "...When manufacturers or retailers plan on offering deals on a particular brand with a
: fixed amount of promotional budget, what aspects of dealing patterns should they consider?
: Perhaps, the most common one is in a combination of frequency and depth of deals in a
: certain dealing period. Frequency refers to how often discounts are conducted in a certain
: period and depth indicates, in terms of percentages, how deep or varied the deals are within the period.
: Basically, there are two dealing patterns in such a combination; one is to offer
: deals on a brand with a large number of small discounts (high frequency & small depth
: pattern; HFSD) and the other one is to offer deals with a small number of large discounts (low frequency & large depth pattern; LFLD). Alba et al. compared two stores employing
: each strategy in terms of their relative influence on consumers' estimates of the total basket price on sixty items at each store and found that the influence of HFSD was stronger than LFLD. Subsequently, Alba et al. investigated under what conditions each strategy
: became more influential on price perceptions at brand level and store level. Based on a series
: of experiments, they found that HFSD was more influential when sets of inter-store or
: inter-brand comparative prices exhibited complex and overlapping distributions and LFLD
: was more influential when prices fluctuated between a constant regular price and single sale
: www.hicbusiness.org/BIZ2003Proceedings/ Miyuri%20Shirai.pdf
Yes, deal depth refers to the size of the discount in % terms. Having many small discounts is perceived to be more important than fewer larger discounts. The psychological underpinning is this: offer me something more often, and I am more inclined to purchase. The frequent repetition is a reinforcement of the overall branding.