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Article
Publication date: 1 January 2004

Mai Anttila

The membership in the European Union (EU) affected price perceptions of citizens in many European countries at the beginning of 2002. How did the transition from the…

2318

Abstract

The membership in the European Union (EU) affected price perceptions of citizens in many European countries at the beginning of 2002. How did the transition from the national currency to the Euro, the new single currency of EU, actually take place? Examines the confusion among Finnish consumers concerning internal reference prices in different product and service categories immediately after the transition to the Euro. Proposes tentatively and empirically tests a framework model. Provides the relationships between the paper's key constructs of consumer price perception and some attitudinal and behavioral variables shortly after transition to Euro currency. Basically price perception took place in similar way, when Markka and Euro scales were utilized. This result was shown, first, by analyzing price perception strategies of consumers, and, second, by showing with correlation analysis that as internal reference price increases, the width of price latitude increases, and, third, by modelling reference price perception on the basis of Volkmann's range theory. Money illusion effect was found to exist to some extent.

Details

Journal of Product & Brand Management, vol. 13 no. 1
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 June 2000

Rajiv Vaidyanathan, Praveen Aggarwal, Donald E. Stem, Darrel D. Muehling and U.N. Umesh

While there has been much debate in the reference pricing literature on the most appropriate conceptualization of internal reference price used by consumers in evaluating…

3196

Abstract

While there has been much debate in the reference pricing literature on the most appropriate conceptualization of internal reference price used by consumers in evaluating deals, the question of whether consumers may use different internal reference prices at different stages of the purchase process has not been addressed. In this article, we hypothesize that consumers may use one type of internal reference price to form their deal attitude and another to determine their purchase intentions. We also show that different dimensions of internal reference price are used to determine deal attitude and purchase intention and that price uncertainty moderates the relationship between these internal reference prices and deal evaluation.

Details

Journal of Product & Brand Management, vol. 9 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 24 February 2012

Rajesh Chandrashekaran

The purpose of this article is to investigate whether involved consumers utilize the same set of reference prices to evaluate an offer as compared to those who are less…

1473

Abstract

Purpose

The purpose of this article is to investigate whether involved consumers utilize the same set of reference prices to evaluate an offer as compared to those who are less involved. Additionally, this study aims to investigate whether the processes employed in the two groups are different.

Design/methodology/approach

A total of 200 students were enrolled to participate in a realistic shopping experience over a two‐week period. In the course of the study, subjects were asked to provide information on their reference prices. They were also asked to evaluate an advertised offer for a pair of jeans. The data were analyzed using a structural equations methodology.

Findings

Under high involvement, consumers utilize perceived normal price, an external market‐based reference price, to adjust their internal standards, which in turn is used to evaluate retail price. In contrast, low‐involvement consumers do not use their internal standards. Rather, they evaluate retail prices directly against external market‐based references.

Originality/value

Despite decades of research on the role of reference prices, the moderating role of involvement on reference price utilization has not been researched adequately. The findings reported here add to existing knowledge in the field and shed additional light on the process by which consumers evaluate posted prices. The findings also emphasize the need to segment the market on the basis of reference price utilization and to design appropriate communication strategies for each.

Details

Journal of Product & Brand Management, vol. 21 no. 1
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 24 July 2007

Tong Yin and Audhesh K. Paswan

This research paper aims to examine the relationships among the factors associated with changing shopping environment, consumer knowledge and reference price.

1966

Abstract

Purpose

This research paper aims to examine the relationships among the factors associated with changing shopping environment, consumer knowledge and reference price.

Design/methodology/ approach

A self administered online survey was used to collect data (final sample size was 265). After checking for non‐response bias, data was factor analyzed and checked for reliability and validity. Hypotheses were tested using structural Equation Modeling procedure.

Findings

Product search opportunity is associated with product and price knowledge. Price volatility is negatively associated with internal reference price. Further, consumers' price comparison propensity and price knowledge positively influence external reference price. Finally, price volatility has a significant negative influence on consumer knowledge and IRP orientation.

Research limitations/implications

The sampling frame is a major limitation, in addition to not including variables such as product type and other measures of price volatility. Future research should expand the sampling frame and include other variables as well as other aspects of price volatility.

Practical implications

These findings provide insights into advertised price claims in the information rich internet age. Managers also benefit from the finding that the internet, particularly price comparison, influences external reference price. Consequently, managers must be cautious with their advertised price claims and not exaggerate the value of offerings or cost savings too much.

Originality/value

This topic is important because retailers extensively use reference price or price comparison to increase consumers' perception of the product value. However, not much research attention has been given to this topic.

Details

Journal of Product & Brand Management, vol. 16 no. 4
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 31 May 2005

Danny Yuan‐Shuh Lii and Monle Lee

The purpose of this study is to examine differences in consumers’ perceptions of an acceptable price range and their responses to the advertised reference price in terms…

1066

Abstract

The purpose of this study is to examine differences in consumers’ perceptions of an acceptable price range and their responses to the advertised reference price in terms of internal reference price, price‐search intention, and perceived value between online and offline retail channels. This research uses a 2 (plausible and implausible reference prices) x 2 (online and offline retail channels) between‐subjects experimental design. A convenient sample of 151 Taiwanese graduate students that have prior experience shopping online are recruited as subjects. Results are shown and managerial implications and directions for future research are then discussed.

Details

International Journal of Commerce and Management, vol. 15 no. 2
Type: Research Article
ISSN: 1056-9219

Keywords

Article
Publication date: 3 July 2007

Sara Campo and María J. Yagüe

This paper seeks to incorporate the study of the effect of price promotions into the traditional scheme of perceived price.

9884

Abstract

Purpose

This paper seeks to incorporate the study of the effect of price promotions into the traditional scheme of perceived price.

Design/methodology/approach

The model is validated with an empirical analysis and applied to the study of the purchase behavior of a tour package.

Findings

The results point out that price promotions directly and indirectly affect the formation process of perceived price. Thus, some differences are observed in the intensity of the above‐mentioned relationship according to the tendency of the consumer to seek advantageous prices. The results obtained might therefore be of great help to service managers in scheduling their promotional activities.

Originality/value

A theoretical model that captures the effect of promotions in the consumer's price perception is configured.

Details

International Journal of Service Industry Management, vol. 18 no. 3
Type: Research Article
ISSN: 0956-4233

Keywords

Article
Publication date: 1 January 1993

Katherine Fraccastero, Scot Burton and Abhijit Biswas

Draws from various theoretical bases and empirical research tooffer managerial recommendations concerning the communication of saleprice information in advertisements…

Abstract

Draws from various theoretical bases and empirical research to offer managerial recommendations concerning the communication of sale price information in advertisements. Addresses the manner in which the manipulation of price cues, semantic cues and product cues in an advertisement can enhanceperceptions of utility via increases in the internal reference price, the perceived value implied by the offering price, and perceptions of product quality.

Details

Journal of Consumer Marketing, vol. 10 no. 1
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 21 November 2016

Jung Eun Lee and Leslie Stoel

Retailers are known to present tensile price claims (TPCs) stating high discounts to entice shoppers. Prior research on TPCs suggests that high TPC discounts increase…

Abstract

Purpose

Retailers are known to present tensile price claims (TPCs) stating high discounts to entice shoppers. Prior research on TPCs suggests that high TPC discounts increase purchase intentions. However, the current study proposes, first, that the TPC discount shifts expected price discount (EPD) and, second, that the gap between the actual price discount and the EPD influence perceptions of the discount deal. Support for these propositions would suggest that high TPC discounts will only be effective when they closely match the actual price discount. Therefore, the purpose of this paper was to evaluate the effectiveness of exaggerated maximum-discount TPCs.

Design/methodology/approach

Two experiments were used. Study 1 investigated the effect of exposure to a TPC on EPD. Study 2 examined discount discrepancy as a mediator of the relationship between a TPC and consumer perceptions (i.e. perceived savings and price fairness) and purchase intentions. PROCESS and ANOVA were used for the analysis.

Findings

This research showed that exposure to a TPC influenced consumers’ EPDs. As TPC discount increased, EPD increased and the discount discrepancy (i.e. actual price discount minus EPD) decreased (and, in some cases, became negative). The discount discrepancy influenced consumer perceptions of savings and fairness, as well as purchase intentions. Consequently, when the actual price discount encountered was not as large as the advertised TPC discount, the results showed a negative, indirect influence of exaggerated maximum-discount TPCs on consumers’ discount perceptions, mediated by the discount discrepancy.

Originality/value

Previous TPC studies found that the size of the TPC discount positively influences consumers’ discount perceptions, implying that larger discounts are more effective. However, this approach does not take into consideration the notion that larger TPC discounts increase consumer expectations about the size of discount and these expectations are used as a frame to evaluate a discount deal. The findings of the current research show a negative, indirect influence of exaggerated TPC discount on consumer perceptions and purchase intentions through discount discrepancy. Therefore, this study provides a new perspective to explain the influence of TPC discount size on consumer perceptions.

Details

Journal of Product & Brand Management, vol. 25 no. 7
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 March 2005

David M. Hardesty and Tracy A. Suter

The focus and intended contribution of this research are to understand better how retailers should strategically present external reference price information varying in…

2855

Abstract

Purpose

The focus and intended contribution of this research are to understand better how retailers should strategically present external reference price information varying in the context from which it originates (online vs bricks and mortar).

Design/methodology/approach

A two reference price environment (online e‐tail, bricks‐and‐mortar retail) × two external reference price ($252.99, low; $379.99, high) between subjects experimental design with a single control condition was employed.

Findings

Results from an experimental study provide empirical support, suggesting that consumers expect to pay less in online e‐tail settings than bricks‐and‐mortar retail settings. Additionally, results suggest that bricks‐and‐mortar retail external reference prices influence consumer e‐tail price expectations, price fairness, and satisfaction perceptions more than online e‐tail external reference prices when reference prices are high. When external reference prices are low, both online e‐tail and bricks‐and‐mortar retail external reference prices are equally effective.

Research limitations/implications

Price setters should use bricks‐and‐mortar external reference prices when the external reference price is high, as consumers are impacted positively by these reference prices.

Practical implications

The research results suggest a time to use bricks‐and‐mortar external reference prices and suggest that online external reference prices have similar impact regardless of the size of the external reference price.

Originality/value

This research is the first of its kind to evaluate the impact of the context of the reference price on consumer evaluations.

Details

Journal of Product & Brand Management, vol. 14 no. 2
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 20 November 2009

Yuan‐shuh Lii, Monle Lee, Ming‐ji James Lin and Hsin‐jen Trust Lin

The purpose of this paper is to examine the type and number of reference prices used and their formation process in consumers' price judgments across product and service…

650

Abstract

Purpose

The purpose of this paper is to examine the type and number of reference prices used and their formation process in consumers' price judgments across product and service categories.

Design/methodology/approach

A pretest of a group of 50 graduate students is conducted to determine the service and product stimuli. Questionnaires for shampoo and hair salons, respectively, are sent out to the employees in four different companies. The subjects are asked to provide information on five commonly used measures of reference price: price most frequently charged; lowest market price; fair price; normal price; and reservation price.

Findings

Although consumers use the same process to evaluate the retail price, the number and types of internal reference prices (IRP) used by consumers for their price judgments are different. In the case of shampoo, consumers use the fair price and the normal price to determine the offer value. In the case of hair salons, consumers use the price most frequently charged, the fair price, and the normal price for their evaluation. The findings suggest that the relative importance of IRP differs between product and service categories.

Research limitations/implications

This paper suggests that the relative importance of IRP differs between product and service categories. Further research is needed to determine if the findings also apply in different cultural environments.

Practical implications

These findings have important implications for managers when creating price communication strategies, they should pay close attention to the specific reference prices and maintain these IRPs within a standard range when determining offer value.

Originality/value

This paper supports a multi‐dimensional view of reference prices and suggests the need to consider multiple reference prices when examining consumers' responses to price information.

Details

International Journal of Commerce and Management, vol. 19 no. 4
Type: Research Article
ISSN: 1056-9219

Keywords

1 – 10 of over 58000