Price Discount Calculator

Most firms offer consumers one of two things during marketing campaigns and sales to boost sales -: i) Price discounts, like a 50% off on prices; ii) Extra Volume, like 50% extra volume for the same price. But, is a 50% increase in quantity equal to a 50% discount on prices? Actually, no! A 50% increase in quantity is only equal to about a 1/3rd or 33.333% discount on prices.

But according to an article in The Economist (2012) (Something Doesn’t Add Up), and research by behavioural scientists (Chen et al (2012)), people fail to realise the difference between the two and often end up viewing them as the same.

One of the researchers, Akshay Rao of the University of Minnesota’s Carlson School of Management, offered his undergraduate students a choice between two a deals when buying loose coffee beans – 33% extra for free, or 33% off on the price. While the discount on the price is the clearly better deal, the students viewed both deals as the same!

For equivalent deals (like a 33.33% price discount vs 50% extra quantity), researchers found that consumers mostly went for the extra quantity (about three quarters of them), even though the deals were numerically equivalent.

This tool helps you to not fall into this numerical blindspot by calculating what price discount (%) corresponds to extra quantity (%) and let’s you make informed decisions on purchases.

Please find below the link for the app:

Leave a Reply

Your email address will not be published.


© 2019 Sujan Bandyopadhyay

Theme by Anders NorenUp ↑