The impact of discount pricing strategies on perceived product quality and customer loyalty: A case study of a retail chain in Abuja.
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Background of the study
Discount pricing strategies are commonly used by retail chains to stimulate sales, particularly during periods of economic stress. In Abuja, retail chains employ discount pricing to attract budget-conscious consumers. However, such strategies can have unintended consequences on consumer perceptions of product quality. Research has shown that while discounts may increase short-term sales, they can also signal lower product quality, thereby undermining brand image and reducing long-term customer loyalty (Okafor, 2023). The challenge lies in balancing the need to offer attractive discounts with the necessity of maintaining a premium perception of quality. This study investigates how discount pricing strategies affect perceived product quality and customer loyalty in a retail chain in Abuja. It examines whether discounting erodes consumer trust or if it can be structured in a way that reinforces perceived value. The study also explores the moderating factors that influence this relationship, such as brand reputation and consumer awareness, to provide actionable insights for retail marketers (Ibrahim, 2024; Adebayo, 2025).
Statement of the problem
Retail chains in Abuja face the dilemma of implementing discount pricing strategies that attract consumers without compromising perceived product quality. Heavy discounting can lead consumers to question the inherent quality of products, resulting in diminished customer loyalty and reduced long-term sales (Okafor, 2023). This challenge is particularly acute in competitive markets where price sensitivity is high and brand reputation is fragile. The misalignment between discount pricing and quality perception poses a significant risk to customer trust and loyalty. This study seeks to understand the impact of discount pricing on both perceived quality and customer loyalty, and to identify strategies to balance these factors effectively (Ibrahim, 2024; Adebayo, 2025).
Objectives of the Study
To assess the impact of discount pricing on perceived product quality.
To evaluate the effect of discount pricing on customer loyalty.
To propose strategies to optimize discount pricing without eroding quality perceptions.
Research Questions
How does discount pricing influence perceived product quality?
What is the effect of discount pricing on customer loyalty?
What strategies can balance discount offers with maintaining product quality?
Significance of the study
This study is significant as it explores the complex relationship between discount pricing strategies, perceived product quality, and customer loyalty in the retail sector. The findings will provide retail managers in Abuja with insights on how to implement discount pricing without undermining brand reputation and consumer trust (Okafor, 2023; Ibrahim, 2024). The recommendations will help in designing pricing strategies that stimulate sales while sustaining long-term loyalty (Adebayo, 2025).
Scope and limitations of the study
The study is limited to a retail chain in Abuja and focuses on the impact of discount pricing on perceived product quality and customer loyalty. It does not extend to other pricing strategies or regions.
Definitions of terms
Discount pricing strategies: Methods of reducing prices to attract customers.
Perceived product quality: Consumer assessment of a product’s excellence relative to its price.
Customer loyalty: The tendency of consumers to repeatedly purchase from a brand.
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