The Role of the Internal Reference Price in the Perception of the Sales Price

Abstract

An understanding of how consumers perceive the objective signal of the sales price transmitted by firms through their communication strategies is fundamental in order for those firms to achieve their desire objectives, whether by way of prices, positioning, differentiation, etc. Within this process, a knowledge of the reference price used by consumers as a standard of comparison when evaluating the products/brands that exist in the market assumes a vital importance. The aim of this article is to analyse the nature of the past information used by consumers when forming their internal reference price, as well as the effects exerted both by this price and by the sales price to which these consumers react in their monetary perception. The results obtained demonstrate that the internal reference price can be inferred through direct measurements of the medium expected price, the maximum acceptable price and the minimum acceptable price. They further show that the two types of prices analysed, namely, the internal reference price and the sales price, exert positive and significant effects over the final monetary perception.