The Effects of Product Line Prices and Competitors' Prices on Consumers’ Evaluations of Reference Price Advertisements

Yuan-Shuh Lii, Chieh Lun Lin

Abstract


This study presents empirical evidence on the effect of product-line prices and competitors' prices on consumers' price judgments as well as on consumers' use of advertised reference price (A.R.P.) as reference across two product categories. Using a 2 x 2 x 2 factorial design experiment, the findings indicated that consumers did not consider product line prices as an important reference. Competitors' prices were found to be a significant reference in the case of frequently purchased product categories. The moderating roles of product line prices and competitors' prices in reference price advertisements were not found. A.R.P. still exerted the greatest influence on consumers' evaluations of a promotional offer across two product categories.


Keywords


advertised reference price, retail pricing strategy, product line prices, competitors' prices

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References


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DOI: https://doi.org/10.31098/jibm.v1i1.218

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Copyright (c) 2020 Yuan-Shuh Lii, Chieh Lun Lin

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