Correspondence: Rajagopal, Department of Marketing Business Division Monterrey Institute of Technology and Higher Education ITESM, 222, Calle del Puente Tlalpan, Mexico DF 14380. Tel: +52 55 5483 2251; Fax: +52 55 5483 1341; E-mail: rajagopal@itesm.mx

¹is Full Professor in the Department of Marketing at Monterrey Institute of Technology and Higher Education (ITESM), Mexico City Campus and Fellow of the Royal Society for Encouragement of Arts, Manufacture and Commerce, London. He holds doctoral degree from Ravishankar University, India and has been conferred the membership (level-II) of Mexican National System of Researchers. He teaches various topics of marketing in the under-graduate, post-graduate and doctoral programmes of the Institute. Dr Rajagopal was associated with University of Birmingham, UK and held key positions in many premier management institutes in India including Administrative Staff College of India.

Received 18 January 2007; Revised 18 January 2007.

Abstract

Consumer responses to clearance sales, both in terms of consumer satisfaction with the decision process and subsequent store choice behaviour, are explored in the paper through controlled experiments conducted involving clearance sales in a consumer choice and decision satisfaction context. The results suggest that consumer response to clearance sales is driven to a large extent by two factors: the effect of a clearance sale on the available options of goods and the degree of store loyalty. Response to a clearance sale was found to be a function of two primary forces — the degree to which a consumer was personally committed to the discount sales alternative, and changes in the difficulty of making a decision due to limitation of buying options. Overall, the discussion of results of the two studies presented in the paper demonstrates that consumer response to clearance sales, both in terms of decision satisfaction levels and observed store-loyalty behaviour, are strongly influenced by the variables of price sensitivity, attractiveness of products, store loyalty and perceived value on available brands.