The mediation effects of sticker shock

Abstract

Purpose – This study aims to extend prior studies by examining the mediation effects of sticker shock on the relationship between price discount and buying intention. Sticker shock refers to the discrepancy between a brand’s sale price (SP) and an individual’s internal reference price (IRP) (Winer 1985). Design/methodology/approach – Prior marketing research on sticker shock is primarily model-based. The authors employed a between-subject experimental design, and hypotheses were tested using a series of regression functions (Baron and Kenny 1986). Findings – The results suggest the effect of price discount on buying intention is partially mediated by sticker shock. Practical implications – The research results suggest that consumers take into account price messages from different sources, such as advertised reference price, SP and IRP. IRP is a key reference point that consumers use to develop the “gain” or “loss” perception. Firms may apply different strategies to influence consumers’ internal reference point and, in turn, influence the perception of the attractiveness of the sale product. Originality/value – This study contributes to the literature by first testing the mediation effects of sticker shock on the relationship between price discount and buying intention.