Abstract
This paper highlights the moderating effect of retailer CSR perception and CSR contribution type on the relationship between advertised reference price (ARP) and consumer evaluations. A two-by-three between-subjects factorial design is employed with the manipulation of ARP and CSR contribution type for hypothesis testing. Experimental results show that internal reference price, value of the deal, attitude towards the deal and purchase intention are higher for the exaggerated ARP than for the plausible ARP in the high CSR perception condition. Similar effects also occur when the retailer CSR contribution type is present in the reference price advertisement. Specifically, in-kind contribution exerts larger effects than money. This study contributes to a better understanding and crafting of integrative ARP and CSR strategies to influence consumers’ price perceptions, evaluations and intentions.
Highlights
The advertised reference price (ARP) is a powerful price-based sales promotional strategy, widely practiced in retail environment
Hypothesis 1 (H1) and Hypothesis 2 (H2) were tested by conducting a MANOVA with ARP and corporate social responsibility (CSR) perception as the main and interaction factors, respectively, followed by specific mean comparisons
The results show that the main effects of ARP (Wilks’ λ = 0.44, F = 55.25, p < 0.01, partial η2 = 0.56) and CSR perception (Wilks’ λ = 0.69, F = 19.96, p < 0.01, partial η2 = 0.31) were significant, as was the multivariate interaction effect (Wilks’ λ = 0.90, F = 4.73, p < 0.01, partial η2 = 0.1)
Summary
The advertised reference price (ARP) is a powerful price-based sales promotional strategy, widely practiced in retail environment. The strategy often involves a higher price mentioned in an advertising offer to the consumer along with a sale price of the promotional offers (e.g., regular price $39.99, sale price $29.99). The higher price mentioned in the advertisement is termed an ARP. The implication is that some consumers, who are relatively unknowledgeable of a product’s price or value, may use the relatively higher advertised price as a reference for assessing the accompanying sale price. The result of this price comparison makes the sale price more appealing and acceptable. Previous research has consistently found that ARP can substantially and positively affect consumer price estimates, value perception, and behavioral intentions (e.g., Bearden et al 1984; Monroe 1990; Biswas and Blair 1991; Grewal et al 1996; Chandrashekaran 2001; Chandrashekaran and Grewal 2003; Lii and Tseng 2005; Mazumdar et al 2005; Grewal and Compeau 2007; Krishnan et al 2013; Kan et al 2014; Sinha and Adhikari 2017)
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