Vulnerability to Low-Price Signals: An Experimental Study of the Effectiveness of Genuine and Deceptive Signals

Sujay Dutta

Journal of Retailing, 2012, vol. 88, issue 1, 156-167

Abstract: Low-price guarantees help buyers make inferences about retailers’ prices. However, researchers are concerned that consumers might be vulnerable to relying on guarantees associated with high market prices. Furthermore, truly low-priced retailers that issue low-price guarantees might be vulnerable to consumers’ discounting of such guarantees. This article experimentally assesses these concerns and finds that the effects of adding a low-price guarantee to a low or high offer price on consumers’ pre-purchase perceptions depend on consumers’ confidence in their product category price knowledge and their decision involvement. The article explores the implications of the findings and provides directions for further research.

Keywords: Low-price guarantee; Consumer confidence; Low-price signal; Signaling theory; Internal reference price; Decision involvement; Knowledge calibration (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jouret:v:88:y:2012:i:1:p:156-167

DOI: 10.1016/j.jretai.2011.08.003

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