[Pricing Nugget #009] New Releases: Deep Thoughts About Deep Discounts

Imagine you are releasing a new product in the future, for example, a physical product, such as a tablet PC.

You plan to allow your customers to preorder those products, and you think about promoting them before release to increase demand and collect more preorders.

You have to make three decisions

  1. when do launch the preorder promotion (one or six weeks before), 
  2. the level of discount (low - e.g., 7% vs high - e.g. 22%), and
  3. the promotion format (price off vs. a gift).

What would you do?

But first, let us look into the theoretical explanation for what is happening here: Construal-level theory.

People think about objects or events (such as the release of a new product) in more abstract or concrete terms with more details.

What is the difference between “abstract” and “concrete” thought about objects or events?

“Moving from a concrete representation of an object to a more abstract representation involves retaining central features and omitting features that by the very act of abstraction are deemed incidental.

For example, by moving from representing an object as a “cellular phone” to representing it as “a communication device,” we omit information about size; moving from representing an activity as “playing ball” to representing it as “having fun,” we omit the ball.” (p. 441)

How can we influence whether people think about objects or events in more abstract or concrete terms? 

The reason is the psychological distance. The most important drivers behind the psychological distance are the physical, the social, and – in our case – the temporal distance.

Are you still with me 😊? In our case, the psychological distance to the new release should be greater if the time between the promotion and the release is longer.

This also means customers think about the new release in more abstract terms when the promotion is early (six weeks before) and in more concrete terms when the promotion is around the corner (one week before).

Here comes the final link, customers who think about a new release in more concrete terms have different concerns and look through “different glasses” on the promotion than those who evaluate the release more abstractly.

One week before, customers have “feasibility concerns” that focus on the details of the product and new release, such as how to get the product and what the price is.

Six weeks before, customers have “desirability concerns” that are about the overall attractiveness of the launched product.

Asking participants in a study about their thoughts, people mentioned different themes.

The researchers found that price promotions are only effective if consumers have feasibility concerns, but a gift (e.g., carrying case, cordless mouse, or charger) caters to feasibility concerns (price & discounts) and also increases the overall desirability (attractiveness & usefulness) of the preordered product and the new release.

Researchers uncovered fascinating findings through a series of experiments:

  • In general, price discounts increase purchase intentions more than free products (gifts).
  • A higher discount (22%) instead of a lower discount (7%) increases purchase intentions. I know this is not particularly surprising. But - this is only the case if the release is near, e.g., one week, instead of distant, e.g., six weeks before release.
  • If you plan a promotion six weeks ahead, do not waste your promotional budget with deeper discounts, as higher discounts do not raise purchase intentions compared to lower discounts if the time-to-release is still quite long. 
  • A high-value gift (monetary value: ~22%) raises purchase intentions compared to low-value gifts (monetary value: ~7%) when the release is near and when the release is distant.
  • If you run your promotion six weeks before release and your promotional budget is deep, consider a gift promotion instead of a high discount.


Jha, S., Deitz, G. D., Hart, P., & Royne Stafford, M. B. (2019). Sales promotions for preorder products: The role of time‐of‐release. Psychology & Marketing, 36(9), 875-890.