Bargain effectiveness in differentiated store environments: When a good deal goes bad

Abstract

Differentiation is necessary to survive in today’s homogeneous retail landscape. One way to differentiate is by making use of store atmospherics. However, other marketing tools such as offering a bargain might conflict with this store differentiation strategy. In study 1, an experimental consumer lab survey (n = 50) confirms that store environment differentiation generates positive consumer affect, evaluations and approach behaviour. In study 2, a 2x2 between-subjects lab experiment (n = 121) furthermore demonstrates that in a highly differentiated store the presence of bargains negatively affects consumer reactions, supporting the assumption that bargains do not fit with a premium strategy.