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Sales induced through price promotions depend heavily on discount depth,so firms create mechanisms to influence perceptions of discount depth. Typically, consumers compute discount depth as the difference between the sale price and the original price, with this difference compared against the original price. But thus far, no research has examined the effect of reframing this difference by comparing the discount depth against the sale price. Multiple studies, including a field study across four grocery stores, show that framing the discount depth by comparing it against the sale price increases consumers’ discount depth perceptions and thus increases purchase intentions. As evidence of the underlying process, the authors identify boundary conditions related to both individual differences (numeracy) and managerially relevant factors (discount depth size). In addition to contributing to research on price promotions, behavioral pricing, and numeric processing, the article offers implications for both practitioners and policy makers focused on consumer welfare. [ABSTRACT FROM AUTHOR]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jbusres.2006.06.006 Byline: Rajesh Chandrashekaran (a), Dhruv Grewal (b) Keywords: Internal reference price; Comparative price advertising; Saving presentation format Abstract: This study investigates how consumers utilize an advertised reference price and the posted sale price (SP) as anchors to adjust their internal reference prices (IRP). As expected, the effect of SP on IRP depends on the magnitude and direction of deviation from the IRP. When the posted SP exceeds IRP, it exerts an upward pressure on IRP, whereas when it falls below IRP, it has a negative impact. Consistent with prior research, consumers rely at least partially on the advertised reference price to adjust their IRP. The saving presentation format also moderates the effects of gains and losses on IRP but does not influence offer evaluation directly. Results suggest that retailers can enhance evaluations directly by pricing their products appropriately relative to consumers' IRP and indirectly through the choice of saving presentation format. Author Affiliation: (a) Silberman College of Business, H-DK2-06, Fairleigh Dickinson University, 1000 River Road, Teaneck, NJ 07666, United States (b) Division of Marketing, Babson College, Babson Park, MA, United States Article History: Received 21 October 2004; Accepted 2 June 2006

The value that consumers place on time spent in price-comparison shopping is central to the economics of information theory and models of consumers' search behavior. Yet few empirical studies have examined consumers' subjective value of time. Building on Gary Becker's work, this article presents two tests of a model of the subjective value of time. In an effort to explain consumers' subjective value of time while they are price-comparison shopping, the model introduces perceived enjoyment of shopping as a new explanatory variable. The findings reveal that respondents Incorporate both wage rates and perceived enjoyment of price-comparison shopping into their subjective value of time. [ABSTRACT FROM AUTHOR]

The authors expand and integrate prior price-perceived value models within the context of price comparison advertising. More specifically, the conceptual model explicates the effects of advertised selling and reference prices on buyers' internal reference prices, perceptions of quality, acquisition value, transaction value, and purchase and search intentions. Two experimental studies test the conceptual model. The results across these two studies, both individually and combined, support the hypothesis that buyers' internal reference prices are influenced by both advertised selling and reference prices as well as the buyers' perception of the product's quality. The authors also find that the effect of advertised selling price on buyers' acquisition value was mediated by their perceptions of transaction value. In addition, the effects of perceived transaction value on buyers' behavioral intentions were mediated by their acquisition value perceptions. The authors suggest directions for further research and implications for managers. [ABSTRACT FROM AUTHOR]

Conventional wisdom and prior research on processing fluency suggest that consumers prefer fluent information, such that it has positive effects on their purchase decisions. Challenging this conventional wisdom, and on the basis of recent research on processing disfluency, this study proposes that the increased effort required to process disfluent price information can lead to deeper information processing. If the advertised price offer represents a good value, it can enhance purchase decisions, even if customers prefer the disfluent display less. A series of studies in the field and lab demonstrate support for this positive impact of disfluent price information on purchase decisions. [ABSTRACT FROM AUTHOR]

The authors explore the role of 5 drivers of loyalty: customer usage level, service pricing, service quality, membership in the firm's loyalty program, and satisfaction with complaint handling. The effects of these drivers may differ for customers who complain versus those who do not complain, as well as for satisfied complainers versus dissatisfied complainers. Testing the proposed models with customers of a large airline, the authors found that satisfaction with complaint handling was key to consumer recommendation of the service to others. The results also underscore the importance of service quality and service pricing as determinants of customer loyalty. [ABSTRACT FROM AUTHOR]

Discusses key issues concerning comparative price advertising in the U.S. Critical public policy issues associated with pricing strategies; Analysis of pertinent topics and relevant issues; Implications on consumer protection.

While numerous firms have successfully segmented customers using various segment-based pricing models and tactics, the advent of the Internet has introduced a new element of opportunity with respect to such pricing. This paper identifies the various areas of opportunity for segmenting World Wide Web consumers. Several known pricing tactics are assessed for their application to the World Wide Web consumer markets. [ABSTRACT FROM AUTHOR]

Presents research on the effects of bundling format and framing of promotional discounts on perceived quality, price acceptability, value and subsequent purchase intentions. Focuses on rebate, discount and free-option strategies; Discusses that price reductions that are frames as providing "free" product options are perceived more favorably than price discounts.

A stream of marketing research indicates that price often affects consumers' pre-purchase perceptions of quality. Interestingly, however, most studies that have assessed the effect of price on quality have utilized physical products rather than services. Moreover, the effect of price on assessments of quality has typically measured before respondents have an opportunity to consume the target product. This paper reports the results of a study that found that the effect of price on post-purchase perceptions of service quality is contingent on consumers' perceptions of contextual cues. Specifically, only when consumers evaluate contextual cues to be worse than their expectations does a higher price increase their perceptions of service quality. Implications of these findings and avenues for future research in services are discussed. [ABSTRACT FROM AUTHOR]

The core element of a free-market economy is price competition. When firms engage in pricing behaviors such as price collusion, price fixing, deceptive price advertising, predatory pricing, resale price maintenance, price confusion, and price discrimination, the pricing practices of firms have an enormous impact on public welfare. It is not surprising then that a great deal of government legislation and judicial decisions focuses on the pricing behavior of firms. Moreover, federal, state, and even local government agencies continually monitor firms' pricing practices because consumers can be harmed. Economics researchers long have investigated the effects of pricing practices on specific markets, the economy, and consumer welfare. Marketing researchers only recently have begun to research pricing practices and their public policy implications actively. In this article, the authors review and organize the main public policy issues associated with pricing and identify research questions that need to be addressed. [ABSTRACT FROM AUTHOR]