Consumer Price Perceptions Research Articles

Consumer Perceptions of Price (Un)Fairness

A series of studies demonstrates that consumers are inclined to believe that the selling price of a good or service is substantially higher than its fair price. Consumers appear sensitive to several reference points—including past prices, competitor prices, and cost of goods sold—but underestimate the effects of inflation, overattribute price differences to profit, and fail to take into account the full range of vendor costs. Potential corrective interventions—such as providing historical price information, explaining price differences, and cueing costs—were only modestly effective. These results are considered in the context of a four‐dimensional transaction space that illustrates sources of perceived unfairness for both individual and multiple transactions.

Reference Price and Price Perceptions: A Comparison of Alternative Models

Reference price effects on consumer price perceptions are often explained by Helson's adaptation-level theory, in which the cognitive representation of reference price is the prototype of the relevant category. However, recent conceptualizations and empirical evidence suggest the possibility of an exemplar model, which may be specified using Volkmann's range theory or Parducci's range-frequency theory. In two experiments, these three contextual models of reference price effects are pitted against one another. Based on the MANOVA and model fitting, range-frequency theory accounted for reference price effects that the other theories could not, suggesting that consumers compare the target price against specific members of the category rather than the category prototype. A third experiment demonstrated that range and frequency effects are moderated by the stimulus presentation condition, suggesting that consumers place greater weight on extreme prices anchoring the range for internal reference prices than for external reference prices.

Promotional Frames' Influence on Price Perceptions of Two Apparel Products

The way in which promotions are framed raises important questions about consumer price judgments. Promotional information may be presented or framed in many ways, each affecting consumers' behavioral responses differently. As promotions are costly, it is important to determine the effect of promotional frames on consumers' price perceptions both during and after the promotional period. This study explores the differences in price perceptions of two apparel products when promotions were framed as either a price discount or a gift‐with‐purchase. The majority preferred the off‐price promotion to the gift‐with‐purchase. Off‐price promotions lowered price perceptions more than did gifts‐with‐purchase, and participants with lower price perceptions were less likely to buy the apparel products at the original price after the promotional period ended. These results illustrate the importance of promotional framing in forming consumer price perceptions.

Consumer Perceptions of Price, Value and Satisfaction in the Hotel Industry:

The hotel industry faces the difficult task of managing the temporal demand for its product. Also, the supply of rooms has outpaced the demand over the last decade. Under this competitive environment, hotels have two basic means of achieving a sustainable competitive advantage within their product markets: (1) low price or (2) high quality. This study examines the relationships between price, value and satisfaction in regard to hotel services.

The Influence of Prior Beliefs, Frequency Cues, and Magnitude Cues on Consumers' Perceptions of Comparative Price Data

A widespread practice in grocery store advertising is to compare the advertised store's prices to a competitor's prices on multiple items. An important, but largely unexplored, issue is how this information is processed and used in conjunction with prior beliefs to influence price perceptions. In our initial studies we manipulated prior beliefs and two data-based cues—frequency of price advantage and magnitude of price advantage—to determine their relative influence on consumer price perceptions. Results indicate that prior beliefs affected price perceptions but that the frequency cue exerted a dominating influence. Several follow-up studies demonstrate the robustness of this phenomenon across a variety of presentational and instructional conditions.

The moderating role of brand familiarity in reference price perceptions

This article examines the moderating role of brand familiarity in the relationship between reference prices and transaction utility, shop-around saving, and shopping intention. An experiment was conducted in which levels of reference price and brand familiarity were manipulated in a MANOVA design. Results show that brand familiarity exerts a strong influence on consumer price perceptions. As hypothesized, subjects in the low familiarity condition perceived higher transaction utility, lower shop-around saving, and higher shopping intention when exposed to an implausible reference price than subjects in the high familiarity condition. Further, this study replicates recent findings on the effects of implausible reference prices.

Effect of Dealing Patterns on Consumer Perceptions of Deal Frequency and Willingness to Pay

Research has shown that brands with higher deal frequency obtain a smaller market share gain on deal and have a lower expected price. However, the level of dealing must be perceived by consumers before it can affect consumer response to promotions. Hence, perception of deal frequency may affect consumer price perceptions and deal response much more strongly than the actual deal frequency. The author determines how consumer perceptions of deal frequency for a brand may be influenced by the dealing pattern of that brand and of other brands. She shows that the price consumers are willing to pay for a brand is correlated more highly with perceived deal frequency than with actual deal frequency. She also shows that the price consumers are willing to pay is correlated with the actual deal frequency of the brand for certain dealing patterns, but not for others.

Consumer Normal Price Estimation: Market versus Personal Standards

In reference-price models, internal reference price is typically estimated from actual market prices. Given the generally poor price knowledge consumers have exhibited in prior research, the question is whether it is reasonable to use actual market prices to estimate consumers' internal reference-price standards. The initial answer provided in this research, surprisingly, is yes. Although internal reference prices are measurable and do affect consumer price perception, the gains in measuring and using those standards in predicting brand choice for frequently purchased products may not be worth the costs. Reasons why the surrogate price measure may work and implications for the measurement of internal reference-price standards are considered.

Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence

Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions about the concepts and their relationships are presented, then supported with evidence from the literature. Discussion centers on directions for research and implications for managing price, quality, and value.

Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence

Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions ab...

Contextual Influences on Consumer Price Responses: An Experimental Analysis

Presentation of price is a common form of retail advertising. The authors examine the influences of semantic, comparison, and store name cues on consumer price perceptions. The research, unlike earlier student-based pricing studies, involved 562 consumers from a major metropolitan area who were each exposed to one of 16 treatment conditions. Results indicate comparison cues produce positive results, whereas the effect of semantic cues depends on the particular stimulus. Findings underscore the necessity for broader price research beyond traditional quality implications and wider representation of product types.

Consumer Price Perception: A Multi‐Dimensional Analysis of Perceived Quality and Adaptation—Level Price as Determinants of Price Perception

Price is a significant determinant of consumers' purchase decisions. It is assumed in this study that the analysis of consumer price perception is of vital importance to understanding the effects of price information on purchase decisions. Earlier it has been studied experimentally in isolation, how a single price cue affects consumer perception of a product's quality. In this study there is the main difference that the influence of an array of prices for the product on the consumer's price perception is examined experimentally at the same time.