Price recall: Brand and store type differences

Jens-Peter Loy, Christian Ceynowa and Lena Kuhn

Journal of Retailing and Consumer Services, 2020, vol. 53, issue C

Abstract: 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.

Keywords: Food retailing; Pricing; Price recall; Store types; Brands; Price-matching guarantee (search for similar items in EconPapers)
JEL-codes: D40 D83 E31 L16 L81 M21 M31 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:53:y:2020:i:c:s0969698919303960

DOI: 10.1016/j.jretconser.2019.101990

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