Price Recall Research Articles

No Effect of Hunger on the Memory of Food Images and Prices

Abstract Purpose Food acquisition is an adaptive problem resolved via both physiological and psychological processes. Hunger could serve as a coordinating mechanism for these processes. When hunger increases, it may be beneficial to shift cognitive resources away from other adaptive problems and towards functions that increase the chances of acquiring food, such as memory for food information. However, there is limited research exploring the impacts of hunger on food-related memory, and the results are mixed. We conducted two studies investigating whether increased hunger levels improve memory for food images and prices – but not non-food images and prices – in image recognition and price recall tasks, respectively. Methods Study 1 was an online, observational study (N = 91) using self-reported hunger as a continuous measure. Study 2 was an in-person, between-subjects interventional study (N = 102) where participants were randomly allocated to a hungry or sated condition. We predicted that higher levels of hunger would improve participants’ ability to discriminate between food images they have and have not seen before and correctly recall food prices. Results We found no evidence of a hunger-related memory enhancement for food stimuli in either study in image recognition or price recall tasks. Conclusion Our findings contrast with older research but support more recent work, suggesting that the effect of hunger on food memory may be sensitive to study design and not as broadly generalisable as first thought.

All-Inclusive v. Partitioned Pricing in Sports: The Effects of Pricing Format on Ticket Purchasers’ Response

Abstract: Sport organizers may employ one of two common pricing strategies—partitioned pricing (PP) and all-inclusive pricing (AIP)—to present the price of the ticket and associated fees to potential consumers. The study examines differences in spectators' price recall, perceived value, and search intentions when purchasing tickets to attend a regular-season Major League Baseball game based on the pricing format experienced (PP v. AIP), as well as the moderating effect of price tier selected, and participants' level of team identification on the impact of the pricing format. Findings point to both theoretical and managerial implications associated with the significant effect that the pricing strategy has on the outcome variables. Although the moderating effect of price tier and team identification were nonsignificant, both variables had a direct influence on the dependent variables considered.

Price recall: Brand and store type differences

Price is among the most important choice criteria for customers, whose price knowledge is often surprisingly inaccurate. This study aims at providing new insights into differences in price recall across brands and store types, and their potential effect on marketing efficiency and customers’ store choice. Towards this aim, we analyze the price recall of consumers for 51 food items by a random-effects panel estimation employing a survey with 715 participants. Our results show that customers recall national brand prices better than private labels, almost irrespectively of the store type; consumers overestimate store brand prices in both store types; the effect, however, is much higher for the convenience store. These outcomes have consequences for the marketing strategy: despite a price-matching guarantee for the store brands in the convenience store, the price image is still in favor of the discounter. This result raises doubts on the effectiveness of the price-matching guarantee, at least in this context. The everyday low price strategy of the discounter seems to pay off in terms of the price image. Though both stores charge the exact same prices for their store brands, prices at the discounter are on average perceived to be significantly lower.

Am I Getting a Good Deal? Reference‐DependentDecision Making When the Reference Price Is Uncertain

Models of consumer decision making commonly incorporate reference dependent preferences. In these models, the reference point is typically assumed to be known by the consumer. However, research on price recall and the reference formation process reveals that the reference price is often uncertain at the time of purchase. Reference price uncertainty creates ambiguity for the consumer about whether they are getting a good or bad deal. This paper develops a model of consumer choice in the presence of reference dependent preferences when the reference price is uncertain. Data from two empirical studies that vary the product category and order of the elicitation of reference prices show that the new model generally outperforms conventional discrete choice models that either ignore reference prices or treat reference prices as certain. The new model provides insights into the effect of reducing reference price uncertainty on consumer choice, and reveals that high uncertainty smoothes the kink in the demand curve that is present in traditional reference‐price demand models.

Price Font Disfluency: Anchoring Effects on Future Price Expectations

Novel, unique, or otherwise disfluent fonts are often used to draw consumer attention. However, disfluent fonts may also create metacognitive processing challenges. Therefore, consumers may devote more cognitive resources to process disfluent price fonts and will consequently be more likely to accurately recall and anchor on disfluent price displays when forming their future price expectations. Three experiments demonstrate that disfluent sale prices can reduce future price expectations, while disfluent manufacturer-suggested retail prices (MSRPs) can increase future price expectations. Additionally, price recall accuracy mediates the effect. Moderation analysis demonstrates that disfluent MSRP displays are more likely to affect price-conscious and less-involved consumers.

End of 9-endings, price recall, and price perceptions

Prices that end with 9, also known as psychological price points, are common, comprising about 70% of the retail prices. They are also more rigid than other prices. We take advantage of a natural experiment to document an emergence of a new price ending that has the same effects as 9-endings. In January 2014, the Israeli government passed a new regulation prohibiting the use of non 0-ending prices, bringing an end to 9-ending prices. We find that seven months after 9-ending prices have disappeared, 90-ending prices acquired the same status as 9-ending prices had before the new regulation was adopted. Thus, 90-ending prices became the new psychological price points, partially eliminating the regulation’s intended effect.

When Remembering Disrupts Knowing: Blocking Implicit Price Memory

Does explicit recall help or hurt memory-based comparisons? It is often assumed that attempting to recall information from memory should facilitate—or at least not disrupt—memory-based comparisons. Using the domain of price comparisons, the authors demonstrate that memory-based price comparisons are less accurate when consumers first attempt to recall the past price versus when they do not try to do so. Attempting—and failing at—explicit price recall focuses attention on metacognitive experience, resulting in a feeling-of-not-knowing, which then blocks the implicit memory that people could otherwise use to make accurate price comparisons. Drawing attention to this metacognitive feeling-of-not-knowing increases the blocking effect of recall on implicit memory, whereas drawing attention away from the feeling reduces the blocking effect. The results identify a new type of memory blocking—metacognitive memory blocking—in which the feeling-of-not-knowing blocks implicit memory during judgments. They also provide further evidence of dual representations of price memory and demonstrate that most memory-based price comparisons are based on implicit memory and do not entail explicit recall of the reference price.

Unit Pricing in Supermarkets: Review of Past Evidence from Academic and Industry Studies

Unit Pricing in Supermarkets: Review of Past Evidence from Academic and Industry Studies

Effects of Working Memory Capacity and Domain Knowledge on Recall for Grocery Prices.

Hambrick and Engle (2002) proposed 3 models of how domain knowledge and working memory capacity may work together to influence episodic memory: a "rich-get-richer" model, a "building blocks" model, and a "compensatory" model. Their results supported the rich-get-richer model, although later work by Hambrick and Oswald (2005) found support for a building blocks model. We investigated the effects of domain knowledge and working memory on recall of studied grocery prices. Working memory was measured with 3 simple span tasks. A contrast of realistic versus fictitious foods in the episodic memory task served as our manipulation of domain knowledge, because participants could not have domain knowledge of fictitious food prices. There was a strong effect for domain knowledge (realistic food-price pairs were easier to remember) and a moderate effect for working memory capacity (higher working memory capacity produced better recall). Furthermore, the interaction between domain knowledge and working memory produced a small but significant interaction in 1 measure of price recall. This supported the compensatory model and stands in contrast to previous research.

PRICE PERCEPTION AND LONG-TERM PRICE KNOWLEDGE OF BUYERS OF ORNAMENTAL PLANTS IN GERMANY

In recent years, specialized retail stores for flowers and plants more and more have to compete against new distribution channels like food retail stores, especially with respect to pricing and scale effects, in Germany. Many shop managers are convinced that they have to adapt competitors’ prices because of customers’ price-dominated perception of the distributed products. Against this background, it is the target of this study to analyze the long-term price knowledge of customers of ornamental plants in German retail stores. For this purpose, with Pelargonium and Poinsettia two of the most common ornamental potted plants have been chosen as object of investigation. Customers’ price knowledge includes reference prices perceived in long-term memory and is affected by several factors around the product (category) and by the consumer itself (e.g., buying behavior, socio-demographics, buying intention). Additionally, different factors of price perception of the buyers of plants can influence the long-term price knowledge that can be measured by scanning the explicit price recall accuracy of consumers entering the retail store. In our study, 253 customers in six horticultural retail stores were interviewed face-to-face in May and November 2011 concerning aspects of their buying behavior, price perception issues, and their product price estimations related to Pelargonium and Poinsettia. Based on a foregoing literature review of previous studies, the coherency of potential impact factors on the price recall accuracy of the interviewed consumers is analyzed within this paper.

The flip side of drip pricing

Purpose – The purpose of this paper is to elaborate on the differences between price partitioning and drip pricing with regard to their influence on price recall, purchase intentions and fairness perceptions. In many industries, sellers advertise low prices and reveal other surcharges sequentially as the customer goes through the buying process. To date, little is known about how these sequential, or drip-pricing, techniques influence consumer behavior. Design/methodology/approach – The study is based on an experimental between-subjects design (N = 95) with two groups. The data collection was conducted with a mixed scenario/stimuli-based online survey for a virtual travel agent. Findings – The findings reveal that underestimation of the total price of an offering is significantly weaker when prices are presented sequentially rather than partitioned. In addition to reduced purchase intentions, drip pricing may negatively affect fairness perceptions when consumers feel deceived by the seller. Originality/value – The study replicates findings of previous research on price partitioning but is one of the first empirical studies to examine the influence of sequence in price presentations. With this focus, the study opens up new avenues for pricing research.

Children’s price knowledge

Purpose – This research aims to evaluate young consumers’ knowledge of everyday product prices. Despite a large body of research on the child as consumer, few studies examine price. Design/methodology/approach – The study employs a quantitative methodology and administered questionnaires that target a sample of 224 primary school French children. Findings – The various employed measures help shed light on the pricing aspect of children’s consumption processes. In particular, the results show that although price recall is relatively weak, children become familiar with the order of price magnitudes and classify products according to their price level. Research limitations/implications – A future research could integrate that the children should be affected by internal reference price in the various tasks. Future studies could introduce other variables in the tests, such as children’s commercial experience and their experience with the stores they know. Practical implications – Firms should adapt their pricing strategies to the expectations of children, not only adults or parents, both for the products that directly pertain to them and for those they might recommend. This research offers managers additional insights into how to communicate about prices, taking into account current customer heterogeneity. Originality/value – Realized measurements reflect children’s capacities to react to the prices of mass-consumed goods and clarify whether the child is able to identify or reduce his consideration set among some alternatives of choice according to his price knowledge level.

Price Knowledge During Grocery Shopping: What We Learn and What We Forget

Past research on consumer price knowledge has varied considerably partly due to differences in how and when price knowledge is measured. This paper applies a multi-point, multi-measure approach to reconcile differences in past price knowledge research by examining systematic relationships between time of measurement and type of measures applied. Examination of consumer price knowledge before, during, and after store visit sheds light on what is measured at the individual points in time: episodic price knowledge and/or reference prices? With a between-subjects design interviewing 1,204 respondents, the authors investigate three price knowledge measures (price recall, price recognition, and deal spotting) demonstrating that these are hierarchically related. Results suggest that reference prices dominate before store visit, but also that episodic price knowledge, surprisingly, is still accessible at the store exit. These findings enable the authors to reconcile diverging results from past research, showing how consumer price knowledge evolves and suggesting that the vast majority of consumers learn about prices, whether consciously or unconsciously, during grocery shopping. Thus, when applying a multi-point, multi-measure approach, consumers appear to know more about prices than suggested by past research. Determinants of price knowledge are also examined and the results indicate that price knowledge builds up not only because of active search but also due to accidental exposure to prices and with low degrees of conscious processing. Implications for managers are discussed.

Unit price information on the reference price formation

Purpose – The purpose of this paper is to analyze the role of unit price information in the formation of the consumer reference prices. Design/methodology/approach – The methodology consisted of two stages. At first stage a survey with a sample of 700 Spanish consumers was carried out. In the second stage, a 200-consumer panel was used. The sampling method was not random for both stages. In the second stage The authors use virtual shelves of three categories, in which, in addition to the brand, the consumer faces various package sizes. Findings – Results show that the unit price information significantly influences the consumers' choice and that such influence can be moderated by the loyalty that the consumer presents. Furthermore, it is noted that the influence of the unit price on price recall is better if the category has many brands and not common size. In these cases the proportion of the use of the unit price is greater. The effect of frequency of purchase on the accuracy of the price recall is less in this type of categories, and more in categories of easy comparison. Originality/value – This study proposes that the unit price information influences the internal reference price of consumers.

Odd pricing effects: an examination using adaptation‐level theory

PurposeUsing adaptation‐level theory as a conceptual framework, the purpose of this research is to determine what effect, if any, marketplace conditioning has on consumer price estimates and product evaluations.Design/methodology/approachA total of 475 subjects participated in two experiments that required them to read a scenario, evaluate a series of advertised products, and perform an aided price recall task.FindingsThe results suggest consumers are more likely to recall the correct price when more of the rightmost digits end in 0 or 9. Moreover, when prices are incorrectly recalled, consumers are likely to inadvertently assume prices end in commonly used rightmost digits (i.e. 5 and 9). Combined, the results demonstrate odd pricing effects are likely a result of marketplace price conditioning rather than truncation of rightmost digits as suggested by the analog model of numerical cognition.Practical implicationsFindings suggest that use of atypical rightmost digits in odd prices fails as a method to differentiate products in the mind of the consumer. This would explain the use of larger right ending digits by retailers in an effort to maximize profit without impacting consumer perceptions of quality, value, and purchase likelihood. In the absence of strong quality image effects, retailers are encouraged to continue the practice of setting prices with digits ending in 9.Originality/valueA key theoretical implication of this study is that the underestimation heuristic based on leftmost digit processing fails to explain the results of the incorrectly recalled price estimates. As a result, adaptation‐level theory may provide a more robust explanation for odd pricing effects.

Are Men Seduced by Red? The Effect of Red Versus Black Prices on Price Perceptions

Although the use of color in promotional ads is ubiquitous in the market, little is known about the impact of color on price perception. This research reports findings from four studies that assessed the impact of red on consumers’ perceptions of savings. These studies reveal that the effect of red versus black prices on perception of savings is moderated by gender. Male consumers perceived greater savings when prices were presented in red than when presented in black (studies 1a and 1b). The effect persists in a multi-ad context (study 2). However, this effect of red abated when the level of involvement in the task was high (study 3). Women appeared to be naturally inclined toward greater elaboration of the ad and showed greater price recall. Theoretical and practical implications are discussed.

An empirical multi‐method investigation of price knowledge in food retailing

PurposeThis paper aims to add insights on consumers' price knowledge in food retailing using a theory‐based multi‐method approach.Design/methodology/approachThe paper provides data from one questionnaire and two experimental studies. The aim of the first study was to address price recall. To do so, data were collected on the accuracy of grocery‐shopper price knowledge for 20 carefully selected products. Using the mall intercept method, three trained interviewers queried 300 randomly selected people in the store, but prior to shopping. After a period of four weeks the subjects were contacted by phone and asked whether they would like to participate in a second two‐step experiment. A total of 105 of the original 300 shoppers agreed to take part in the second study, in which a recognition task in terms of a computer experiment was accomplished with and without financial incentives.FindingsThe results of these studies confirmed the authors' expectations, based on theoretical considerations that: the level of price recall is lower than the level of price recognition; incentives have no influence on price‐knowledge in the recognition task; and price‐knowledge for private labels is significantly higher in the recall, as well as in the recognition task. Moreover, in regression analyses it was found that there was no significant influence of age, gender, price‐consciousness, duration of customership, and shopping transactions per week on price recall and/or price recognition.Research limitations/implicationsThe findings are limited with respect to branch, time period, and culture.Originality/valueThis paper is the first using a multi‐method approach to measure price‐recall and price‐recognition in food retailing. Moreover, it adds evidence concerning the differences of price‐knowledge due to the nature of the brand. Finally, it is shown that incentives and certain demographics have no influence on price‐knowledge.

Demographics, psychographics, price searching and recall in retail shopping

Retailing environments have gone through physical changes and the Internet revolution which intensifies price search and comparison behaviour, however, what customer characteristics – demographics or psychographics – affect price searching and recall? Further, what changes the relationship between the price-searching tendency and price recall? This research develops a framework that integrates the views of the economics of information and psychosocial returns to address these questions. Through point-of-purchase surveys, this study finds that psychographics affect the price-searching tendency directly while demographics do so indirectly through psychographics. In addition, the price-searching tendency has a positive effect on price recall and this relationship is stronger when consumers buy discounted products. Finally, in contrast to previous research, consumers' high tendency to search for price and price recall accuracy and confidence are found.

Price Recall, Bertrand Paradox and Price Dispersion with Elastic Demand

This paper studies the consequence of an imprecise recall of the price by the consumers in the Bertrand price competition model for a homogeneous good. It is shown that firms can exploit this weakness and charge prices above the competitive price. This markup increases for rougher recall of the price. If firms have different production costs, those with higher costs are not driven out of the market. However they choose to have a higher price in equilibrium, therefore price dispersion arises. It is shown that firms behave on average as a monopolist with stricter demand and that price dispersion increases with the price recall errors. If bigger recall errors happen, then both consumers and firms on the aggregate level are worse off, for some parameter choices. Furthermore being given the irrational choice that some consumers make, there are situations where the protection of a monopolist against entrants is a welfare maximizing policy. The introduction of more firms in the market does not have a significant impact on the prices. Even though the presented model is static, it can be interpreted as a stage game of an infinitely repeated game where a Nash Equilibrium is played in every stage. The intuition is that consumers do not actually seek information before every purchase, but have a vague idea of the price they faced in previous purchases.

Memory for Prices and the Euro Cash Changeover: An Analysis for Cinema Prices in Italy

The question addressed by this study is whether consumers remember past prices correctly. We test Italian citizens' memory for cinema prices with questionnaires distributed to moviegoers. The analysis concentrates on the memory of pre-euro prices, but the recall for a more recent period is also investigated. The results show that only a small percentage of respondents recalled the correct price, and that the average prices recalled were much lower than the actual pre-euro prices and dated back to years before the changeover. Price recall is less accurate for the respondents who perceive higher and more persistent inflation; it is also worse for the older respondents and for the less frequent movie-goers.