Can a Small Discount be Big Discount?

Car manufacturers are always trying to solve a conundrum; how do you make a small car feel less small? Everyone knows that big cars are associated with all the positive stuff; power, comfort, luxury, status, indulgence.

Small cars are associated with practicality, frugality, compromise, convenience.  Worthy, certainly. But truly desirable?

To overcome this car manufacturers do one of two things.

They make small cars physically bigger until they reach a point where no one can pretend it’s still a small car. Then, at some point, they have to bring out a new model that really is small again.

Or else their marketing tells us that their small car is really a big car in a small body so it’s OK to buy it and not feel bad. "Honestly", they say, "you'll never realise that this car is small once you're inside."
 
Of course no one is suggesting that when they use the "tell consumers that the small car is actually big" ploy anyone really thinks it is bigger. 

This is, of course, just a simile: the car might have some qualities that you associate with a bigger car, so you can feel better about owning it. The car is physically whatever size it physically is – that's fixed.

However, when it comes to numbers (and therefore discounts), recent research has shown that the way in which people perceive a number has much to do with how it’s expressed.  What everyone would say is equal if they were considering it rationally causes them to behave differently when they encounter it.

This is another of those fascinating insights that show our behaviour is largely a by-product of unconscious mental processes.

Turn the page for the surprising details of this study and its implications for product pricing and discounting...»

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