Discounts are perceived as disrespectful
Many companies aim to promote diversity and inclusion by offering products linked to stigmatized groups, such as “Black Lives Matter” water bottles or LGBTQ+ Barbie Dolls. However, Aydinli’s research shows that discounts on these identity-linked products often elicit negative reactions from members of these social groups. “For stigmatized consumers, a price reduction can signal that their identity is being devalued,” Aydinli explains. “As a result, the discount is interpreted as a form of disrespect toward their social group.” For example. back in 2010, Walmart faced significant backlash when it discounted Black Barbie dolls while keeping White Barbie dolls at full price.
Non-stigmatized groups react differently
The research, which focused on consumers in the United States, reveals that non-stigmatized consumers do not perceive a price discount on products linked to a stigmatized identity as disrespectful. “Our current understanding of price promotions reflects the perspectives of the non-stigmatized,” Aydinli notes. “Therefore, business practitioners who are not members of stigmatized group need to be especially mindful when offering discounts on products linked to stigmatized groups, as they may encounter unanticipated negative reactions from stigmatized consumers.” Aydinli’s research also demonstrates that the negative reaction is less pronounced when the discount comes from a company perceived to be part of the stigmatized group’s own social group, such as a minority-led business. Additionally, the adverse effect tends to diminish if the company applies discounts to a broader range of products, including those not linked to stigmatized identities.
Tips for companies: choose alternative price promotions
These findings have significant implications for companies that prioritize diversity and inclusion in their marketing strategies. Aydinli advises companies to be cautious with discounts on products linked to stigmatized groups. “Instead of price reductions, companies may opt for alternatives like 'buy one, get one free' offers or free shipping,” suggests Aydinli. “This way, you can prevent well-intentioned promotions from being misinterpreted as a sign of disrespect.” Moreover, she emphasizes the importance considering the broader context of the promotion. “When consumers see that the discount is applied to a range of products, including non-stigmatized identity-linked products, they feel less targeted regarding their identity,” Aydinli adds.
More Information
Want to learn more about this research from VU School of Business and Economics? Contact press officer Mika Linse at m.linse@vu.nl or +31 6 81388961. Read more about the research here.