The effectiveness of tensile pricing tactics in the advertising of services

Previous research on the use of tensile pricing in advertising has not yet determined if services respond differently to tensile tactics than do products. Moreover, in the product studies of tensile tactics, minimum tested discount levels were based on local market conditions which were assessed in the early 1990's. This study examines the effects of tensile pricing tactics on services, and uses minimum discounts based on, broader current market conditions. Results suggest that advertisements for professional and retail services do not differ front each other in terms of performance in response to a tensile pricing tactic. Results also indicate that tensile pricing tactics may have different dynamics in services versus product advertising. Finally, the findings tend to indicate that consumers' generic perceptions of savings in response to the use of tensile tactics might be distinct from the specific intent to purchase certain services, given. the possible link in the customer's mind between discounts and subsequent perceptions of services quality in certain categories.