The Availability and Use of Internal Reference Prices in Evaluating Advertised Deals

Abstract

The marketing literature has provided considerable evidence concerning consumers' use of external reference prices in the context of advertising deal evaluations, with little emphasis placed on internal reference prices. This study focuses on the internal reference price construct and presents a multidimensional conceptualization with historical/market-based and aspirational dimensions. Furthermore, recognizing the practical need to consider consumer antecedent variables, the authors advance a 2×2 Price-Information Matrix designed to profile consumers' utilization of market-based or aspirational internal reference prices in evaluating advertised deals under varying levels of product knowledge and price consciousness. Theoretical and practical implications of the matrix for retail advertisers are discussed.