Price preferences reveal asymmetric price effect—A preliminary study

Abstract

In the context of the consumption of two food products, we demonstrate that the price-framing affect distribution is bi-model, rather than normal. We do this through a preference typology for expensive versus cheap products, conducted through two independent tasting experiments: one involving chocolate the other, cheese.Participants made product quality judgments, first without price information and then with. Crucially, each tasting line-up carried a pair of identical but differently priced products. In each experiment the results split the sample populations into two subsets: those who preferred the more expensive duplicate products and those who either preferred the cheaper alternative or were price neutral. Through testing of a high/low price-preference typology, we find evidence of strong-positive price affectation for individuals that prefer high priced, but identical products. Such asymmetrical susceptibility to price information suggests that food-based price framing effects may be also experienced by different populations at markedly different intensities. Practical ApplicationsPractical implications for marketers of fast-moving consumer goods are provided.Due to the bi-model distribution of price-framing affect rates, we submit that vulnerability to the framing effect is not universal among consumers. Therefore, by identifying those consumers who are more price sensitive, emphasis can be placed on highlighting the extrinsic product characteristics of these goods, such as price, rather than on the intrinsic qualities such as smell, taste and texture. Advertising should also be tailored in content, style and tone when targeting these different types of consumers. The study also builds on the work relating to cue-based segmentation of consumers and posits the idea that segmentation can be conducted based on their sensitivity to the price cue. | INTRODUCTIONAffectation, or "affect," relates to how people react to a given cue.Cheetham, Allen, Yucel, and Lubman (2010) put it that affect is generally understood as the transitory set of feelings evoked in response to a specified context or cue and that the constitution of feelings has long been held as adaptive and laden with evolutionary significance (Saad, 2013). Through special selection, affect is seen as important in directing the way individuals make decisions and behave in general (Gross, 1998). Thus, it can be seen how affect might guide awareness in preparing consumers for speedy reaction, for directing behavior appropriate to situation or desire (Gross, 1998), and for assisting in the complex process of reasoning and decision making (Bechara & Damasio, 2002). Extending the definitions of affect within the context of price, the term "price affect" may thus be applied to an individual's reaction or response to a change in the price of a product in relation