ARE DISCOUNTS KILING BRAND VALUE? A Study on Consumer Perception and Brand Loyalty in the Indian E-Commerce Market

Abstract

This major research project is titled “Are Discounts Killing Brand Value? A Study on Consumer Perception and Brand Loyalty in the Indian E-Commerce Market” assesses the increasing influence of discount culture on customer perception and the innate value of the brand specifically pertaining to the Indian context of online shopping industry. This report focuses on understanding whether continuous discounts improve buying behaviour at the cost of damaging the brand image, consumer loyalty, and perceived quality.

Overview of the Study • Indian e-commerce has been rapidly growing platform such as Amazon, Flipkart, Nykaa and Myntra has increased the utilization of aggressive discounting tactics. • Today’s customer are overly exposed to: Ø Flash sales Ø Cashback offers Ø Coupon codes Ø Festive/Limited discounts Ø Limited-time discount and promotional campaigns • The research study explores whether these recurring discounts and offers are create a negative impact on the long term “discount dependency” amongst customers.

Objectives of the Study This study was developed to fulfil these major objectives: • To observe the relationship between consumer trust and frequent discounting given by brands. • To investigate whether multiple recurring discounts possibly reduce perceived product quality. • To analyse the corelation between cart abandonment behaviour and discount expectations.

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• To understand the impact of discount-driven shopping behaviour on long-term brand loyalty. • To illustrate whether most online shoppers are more influenced by discounts and promotions rather than actual purchase intent.

Research Methodology

• The study is developed through an analytical and descriptive research design. • Primary data was put together utilizing a structured questionnaire through Google Forms. • Responses were gathered from original data of 53 online shoppers through convenience sampling • This study mainly focusing on younger age groups who are using online channels for shopping. • Tools used for statistical analysis included: Ø Percentage analysis Ø Frequency distribution Ø Spearman’s rho correlation Ø Regression analysis Ø Reliability analysis (Cronbach’s Alpha) • The value of Cronbach’s Alpha was 0.97 affirmed good internal consistency and reliability of the questionnaire items.

Major Findings of the Study

• Indian consumers are strongly influenced by discounts for their online purchases. • Most of the purchases carried out by the respondents are heavily influenced by the sale period or discounts. • The most effective promotional format was found to be flat percentage discounts among the respondents. • A direct correlation was found between the frequency of the online shoppers and their purchases because of discount.

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• Most of the consumers believe that excessive discounting negatively affect the perceived image of the brand and the product quality overtime. • Unavailability of the discount led to cart abandoning for most of the respondents • The study establishes clear evidence of increasing discount dependency amongst online consumers for shopping

Summary of Hypothesis Testing

Hypothesis Statistical Result Decision H1: Frequent discounting significantly reduces consumer trust p = 0.109 (Insignificant) H₀ Accepted H2: Frequent discounts significantly reduce perceived product quality p = 0.023 (Significant) H₀ Rejected H3: Discount-driven behavior significantly reduces brand loyalty p = 0.528 (Insignificant) H₀ Accepted H4: Discount expectation significantly increases cart abandonment p = 0.059 (Insignificant) H₀ Accepted H5: Frequent shoppers are more influenced by discounts p = 0.015 (Significant) H₀ Rejected

Regression Analysis Summary

• Regression analysis confirm that discounted purchases are positively influenced by the shopping frequency. • The P value is 0.012, which suggests that the model was statistically significant. • The study illustrate that frequent exposure to e-commerce promotions through various channels increases the consumers’ responsiveness towards discounts. • On the other hand, the relatively low R square value suggest that there are other behavioural and psychological factors that are related to the purchase decision that also affect them.