Retailers’ Use of Partially Comparative Pricing: From Across-Category to Within-Category Effects

Abstract

Prior research suggests that partially comparative pricing-in which a retailer provides price comparisons for some, but not all, of its products-is a double-edged sword. On the one hand, such pricing improves beliefs about the retailer's competitive price advantage on comparatively priced products for which its prices are compared with a competitor. On the other hand, it has been shown to damage perceptions of the retailer's noncomparatively priced products relative to those charged by the competition. However, this latter outcome is based on evidence examining the influence of partially comparative pricing across different product categories. The authors propose and demonstrate in five studies that price comparisons may actually improve relative price beliefs about the noncomparatively priced brands within the same product category. They further show this improvement to be attenuated as the number of price comparisons increase or when the price comparison is attached to a brand perceived as less typical of the product category. The authors conclude by drawing managerial implications and offer suggestions for further research.

The effect of complete versus partial observations on service evaluations

“…Observing customers may be affected by the unfavorable incident that one target customer would have to undergo. Scant research on observing customers assumes that they know an incident in its entirety (Cowley, 2005;Sharifi et al, 2017;Mattila et al, 2014;Wan et al, 2011;Miniard et al, 2013). However, we argue that this may not necessarily be the case.…”

Brand the Pricing: Critical Critique

“…Many Scholars like, Hamilton and Chernev (2013); Miniard et al (2013) ;Chen et al (2012) and Biswas et al (2013) deliver valuable insights into many aspects that apply this kind of contextual and perceptual impact from store and product level to brand level. Hamilton and Chernev (2013) and Miniard et al (2013) explore the customer's aspects from price inferences and study types of observable pricing to non-pricing associated information customers when understanding vital but unobservable prices, such as at store level and at competitors' level prices. Chen et al (2012) and Biswas et al (2013) study the impact of promotional pricing demonstration on buyers' numerical way of (price) information processing.…”

“…Hamilton and Chernev (2013) have developed a conceptual framework model for consideration of both price and non-price associated stimuli that are underneath the control of retailer and can directly affect the price image of retailer. Miniard et al (2013) examine the shopper price inferences on retailer practice are that of "partially comparative price", famous and huge retailer like, Walmart offers shelf labels for its products and brands that compare the pricing with that offered by the competitor/s (e.g., Toys "R" Us). Earlier examinations have shown that pricing judgments result in favorable pricing acuities for the referred brands or/and products.…”

“…Nevertheless, such judgements have shown to have the unintentional significance of leading to buyer inferences of the upper prices for advertising retailer (such as; Walmart) across product level categories in which prices are not associated (Barone, Manning & Miniard, 2004). This issue address is negated by Miniard et al (2013) and discovers that when comparative prices castoff on a brand in a product class level, the customers perceive the other brands in the product level category to be priced more favorably than named competitor's price/s. Nevertheless, in context with the principle that comparatively priced product/brand in a category is the norm, if vender compares prices on more than one product/brand in the category, customers will surmise that the selected product/brand is opted, and the spillover effect to other products/brands models in the product category line will be diluted.…”

“…Some scholars highlight simple but earlier unrecognized marketing practices that executives can employ to develop the positioning of their prices like; Hamilton and Chernev (2013); Miniard et al (2013);Chen et al (2012) and Biswas et al (2013). For instance, one pervasive promotional practice is the use of reference price promotion.…”