Discounting is the number one promotional tool that motivates panelists to purchase more designer handbags, luxury watches and fine jewelry. While most luxury goods manufacturers will recoil in horror at the idea of discounting their brand, it is important to note that our panelists were less concerned about the amount of the discount; they just wanted to receive “something.” Partly because of they acknowledge their position as luxury buyers in a global recession and partly because the Mainland Chinese love to bargain. Many Mainland Chinese obtain great satisfaction by feeling that they “got a good deal.” When interviewed, one panelist described an experience where she spent 10 minutes bargaining to buy a blanket and felt hugely accomplished when the vendor agreed to lower the price by $1 dollar.

However, it is important to note that not all brands will benefit from discounting. For brands such as Chanel, Hermes and Louis Vuitton, panelists said they would be motivated to buy more if these brands offered promotional items such as gift with purchase (GWP), frequent buyer points and tickets to special events. Buyers of these brands were much less likely to cite discounting as a potential motivating factor for future purchases. Therefore, luxury goods manufacturers need to figure out how make the Chinese customer feel as if he/she is getting a deal without denigrating their brand image.