Thesis Proposal
Title:
The Influence of Discounts and Offers on Customer Purchase Decisions
Submitted By:
Rojina Siwakoti
Master’s in Business Studies (MBS)
Kankai adarsha campus, Tribhuvan University
Date of Submission:2082/07/22
1. Introduction
In a highly competitive marketplace, businesses constantly seek innovative ways to
influence consumer behavior and enhance sales performance. Among various
marketing strategies, promotional pricing through discounts and offers has emerged as
a widely adopted tool for attracting and retaining customers. These strategies are often
seen in both traditional retail stores and the ever-growing e-commerce sector.
Modern consumers are bombarded with various forms of promotional stimuli such as
price reductions, buy-one-get-one-free deals, cashback schemes, festive offers, and
loyalty discounts. While these tactics are aimed at increasing customer footfall and
boosting sales, their actual influence on purchase decisions remains a subject of
investigation. Some consumers are highly driven by these promotions, while others
remain indifferent or skeptical.
This thesis proposal aims to explore how such marketing tactics—particularly
discounts and offers—influence customer purchase behavior. It seeks to identify the
types of promotions that work most effectively and assess whether such strategies
foster short-term attraction or contribute to long-term customer loyalty.
2. Background and Rationale
The increasing application of sales promotions has changed how consumers perceive
pricing and value. With the rise of online shopping and mobile applications, the
accessibility of offers has grown exponentially. Consumers are increasingly trained to
wait for discounts before making a purchase, which raises concerns about the
sustainability of regular pricing and brand equity.
Many companies offer discounts seasonally or during specific occasions to increase
demand. However, there is a risk that customers may associate the product's value
solely with its discounted price. In contrast, well-designed promotional campaigns
have been shown to increase brand awareness, encourage repeat purchases, and
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enhance overall customer satisfaction.
From a business standpoint, understanding how customers respond to discounts is
essential for formulating pricing strategies that not only increase sales but also build
loyalty and trust. Thus, this research is important to provide valuable insights into
customer psychology, brand positioning, and revenue management.
3. Statement of the Problem
Despite being a common and frequently used marketing tactic, the real effect of
discounts and offers on customer purchase decisions is still under debate. Some
believe these tactics merely generate impulsive buying, while others see them as a
loyalty-building tool. Additionally, different customer demographics may respond
differently to promotional campaigns.
Thus, this research aims to address the following central problem:
“To what extent do discounts and offers influence customer purchase decisions, and
how do these influences vary based on customer demographics and shopping
platforms?”
4. Objectives of the Study
General Objective:
- To examine the influence of discounts and offers on customer purchase decisions in
both traditional and online retail contexts.
Specific Objectives:
1. To analyze the types of discounts and promotional offers that most strongly
influence customer behavior.
2. To study customer perceptions and attitudes toward frequent discount-based
promotions.
3. To assess whether discounts drive brand loyalty or promote temporary impulse
buying.
4. To evaluate how demographic factors such as age, gender, and income affect
responses to promotional strategies.
5. To compare the effectiveness of discounts in online vs. offline shopping
environments.
5. Research Questions
1. What is the impact of discounts and offers on consumer purchase decisions?
2. Which types of promotional campaigns are perceived as most attractive and reliable
by customers?
3. Do repeated discounts improve customer loyalty or diminish perceived product
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value?
4. How do customer demographics influence responsiveness to discounts?
5. Are discounts more effective in online platforms than in physical retail stores?
6. Significance of the Study
This research will have significant implications for:
Marketers and Retailers:
- Understanding which promotional strategies are most effective in driving sales and
retaining customers.
Consumers:
- Becoming more aware of how their decisions are influenced by external marketing
stimuli.
Researchers and Academicians:
- Adding to the body of knowledge in marketing, consumer psychology, and pricing
strategies.
Policy Makers and Economists:
- Providing insights into consumption behavior trends that may inform consumer
protection policies and fair trade practices.
7. Scope and Limitations
Scope:
- The study will focus on the retail and e-commerce sectors within urban areas.
- It will include participants from diverse age groups and socioeconomic backgrounds.
- Both qualitative and quantitative data will be collected for a holistic analysis.
Limitations:
- Limited time and financial resources may restrict the sample size.
- The findings may not be fully generalizable to rural populations.
- Responses may be influenced by recent purchasing experiences or seasonal offers.
8. Research Methodology
Research Design:
- The study will adopt a descriptive and analytical research design.
Research Approach:
- A quantitative approach will be primarily used, supported by limited qualitative
insights.
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Data Collection Methods:
- A structured questionnaire will be distributed to 150–200 customers via both online
and offline channels.
- Semi-structured interviews with selected marketing professionals may be conducted
for deeper insight.
Sampling Technique:
- Random sampling method will be employed to ensure diverse and unbiased
representation.
Data Analysis Tools:
- Statistical tools such as SPSS or Microsoft Excel will be used for data analysis.
- Descriptive statistics (mean, frequency) and inferential statistics (regression,
correlation) will be applied to test hypotheses.
9. Literature Review
Several researchers have studied the effect of promotions on consumer behavior.
Kotler and Keller (2016) emphasize the psychological pricing tactics and their impact
on consumer mindsets. According to Schiffman and Kanuk (2010), impulse buying is
largely triggered by limited-time offers and emotional appeals. In contrast, Nagle et
al. (2016) caution that overuse of discounts may result in brand devaluation.
This research builds upon existing literature while contributing new findings specific
to local shopping behavior, digital influence, and post-pandemic retail trends.
10. Expected Outcomes
- A clear understanding of customer preferences regarding types of discounts and
promotions.
- Evidence of whether discounts result in lasting loyalty or short-term purchasing.
- Identification of demographic patterns in discount responsiveness.
- Actionable recommendations for retailers to design efficient and consumer-oriented
promotions.
11. Tentative Chapter Outline
Chapter 1: Introduction
- Background, Problem Statement, Objectives, Significance, Scope
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Chapter 2: Literature Review
- Theoretical Framework, Review of Past Studies, Research Gap
Chapter 3: Research Methodology
- Research Design, Sampling, Tools, Limitations
Chapter 4: Data Analysis and Interpretation
- Presentation of Findings, Statistical Analysis
Chapter 5: Summary, Conclusions, and Recommendations
- Conclusion of Key Findings, Managerial Implications, Suggestions for Future
Research
12. References
- Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
- Schiffman, L. G., & Kanuk, L. L. (2010). Consumer Behavior (10th ed.). Prentice
Hall.
- Nagle, T. T., Hogan, J. E., & Zale, J. (2016). The Strategy and Tactics of Pricing.
- Monroe, K. B. (2003). Pricing: Making Profitable Decisions.
- Dodson, J. A., Tybout, A. M., & Sternthal, B. (1978). Impact of Deals and Deal
Retraction on Brand Switching. Journal of Marketing Research, 15(1), 72-81.
