Relative importance of retail store image and consumers characteristics on the perception of value and willingness to pay a premium price

Abstract

Retail store image, customer evaluation of merchandise value and intention to purchase have been studied as a most important constructsof the retail domain. It is considered from previous research, that store image is expressed in terms of tangible and intangibledimensions as assessed by consumers. Consumers are affected by the store’s attributes and consider image associations in order toassess perceived benefits and attitudes. This study develops a proposition that store image makes an influence on the level of perceivedproduct value. As recent research has shown, perceived value is related to willingness to pay a higher price. Accordingly, thisstudy posits a path model of store image, product value perception and willingness to pay a premium price. The proposed theoreticalframework entails insights on the differences in retail image – customer attitude relationship according to customer characteristics –gender and income. Therefore I hypothesize the impact of gender and income on the perceived merchandise value and willingnessto pay a premium price. Analyzing the path model, this paper investigates the influence of retail image and customer characteristicson the important retail outcomes. The results suggest a link of retail store image and perceived value of merchandise, also the hypothesizedassumptions of the link of customer income and endogenous variables of perceived value of merchandise and willingnessto pay a higher price were supported by the results. Findings of the structural model do not support the effect of the gender on therelationship between retail image and resultant variables of perceived value of merchandise and willingness to pay a higher price. KEY WORDS: retail store image, perceived value of merchandise, willingness to pay a higher price. DOI: http://dx.doi.org/ 10.15181/rfds.v9i1.602