How internal reference prices determine when a price’s location will influence consumer judgments

Katina Kulow (), Keith S. Coulter, Michael J. Barone and Xingbo (Bo) Li
Additional contact information
Katina Kulow: University of Louisville
Keith S. Coulter: Clark University
Michael J. Barone: University of Louisville
Xingbo (Bo) Li: Dell Technologies

Marketing Letters, 2022, vol. 33, issue 4, No 3, 563-575

Abstract: Abstract Research has begun to examine if a price’s physical location—whether it is shown to the left versus right, or at the bottom versus top, of a marketing stimulus—can influence consumer judgment. Our research builds on initial evidence documenting the ability of a price’s low location to evoke “down = less” vertical metaphors that prompt perceptions of that price as being monetarily low. In particular, we examine two moderators of this location effect: whether target prices are (1) monetarily above or below consumers’ internal reference prices (IRPs) and (2) associated with a low- or high-cost category. Results reveal two interesting contingencies to price location effects not identified previously: these effects arise primarily for evaluations of lower-than-IRP prices associated with low-cost products, an effect that is mediated by processing fluency. Conversely, such effects do not arise for higher-than-IRP prices or in high-cost product categories.

Keywords: Pricing; Price location; Metaphors; Internal reference prices; Category pricing (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11002-021-09597-1

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