A reference price is the comparison point a customer carries in their head for what a product should cost. The struck-through price in a discount display, competitor prices and the customer's own past purchases all set that point. The entire perception of a discount forms against this reference, and once it has been pulled down it takes a long time to lift again.
A product kept permanently on discount moves its reference price to the discounted level and stops selling when it returns to full price; this is the most common mechanism behind campaign dependency. In a discounted price display, the struck-through amount has to be a price the product was actually sold at before; an inflated reference is risky under consumer regulation and damages brand trust once noticed. On entry into a category the reference has not settled yet and positioning is free; moving it up later is far harder.
A product kept permanently on discount moves its reference price to the discounted level and stops selling when it returns to full price; this is the most common mechanism behind campaign dependency. In a discounted price display, the struck-through amount has to be a price the product was actually sold at before; an inflated reference is risky under consumer regulation and damages brand trust once noticed. On entry into a category the reference has not settled yet and positioning is free; moving it up later is far harder.
A product kept permanently on discount moves its reference price to the discounted level and stops selling when it returns to full price; this is the most common mechanism behind campaign dependency. In a discounted price display, the struck-through amount has to be a price the product was actually sold at before; an i…
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