The Effect of Discount Frequency and Depth on Consumer Price Judgments

Alba, Joseph W.; Mela, Carl F.; Shimp, Terence A.; Urbany, Joel E.

doi:10.1086/209553

Cited by 182 publications

(130 citation statements)

References 45 publications

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“…Alba et al (1994) found that discount frequency had a stronger effect on price perceptions than did discount depth in a number of experiments when the stimulus presentation mode was predominantly simultaneous. On the other hand, Alba et al (1999) found the reverse was typically true when prices were presented sequentially. The findings here suggest that the stimulus complexity explanation provided by Alba et al (1999) may be moderated by the stimulus presentation condition.…”

Section: Reference Pricesmentioning

confidence: 94%

“…On the other hand, Alba et al (1999) found the reverse was typically true when prices were presented sequentially. The findings here suggest that the stimulus complexity explanation provided by Alba et al (1999) may be moderated by the stimulus presentation condition.…”

Section: Reference Pricesmentioning

confidence: 94%

“…Third, Janiszewski and Lichtenstein (1999) compared ratings in contextual sets in which the mean price was held constant and the range was varied. However, price judgments can be affected by frequency manipulations (Alba et al 1994;Alba et al 1999;Kalwani and Yim 1992). Therefore, we also investigated the complementary condition, comparing ratings across contextual sets in which the range was held constant and the mean was varied.…”

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confidence: 99%

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Reference Price and Price Perceptions: A Comparison of Alternative Models

Niedrich¹,

2001

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Reference price effects on consumer price perceptions are often explained by Helson's adaptation-level theory, in which the cognitive representation of reference price is the prototype of the relevant category. However, recent conceptualizations and empirical evidence suggest the possibility of an exemplar model, which may be specified using Volkmann's range theory or Parducci's range-frequency theory.In two experiments, these three contextual models of reference price effects are pitted against one another. Based on the MANOVA and model fitting, range-frequency theory accounted for reference price effects that the other theories could not, suggesting that consumers compare the target price against specific members of the category rather than the category prototype. A third experiment demonstrated that range and frequency effects are moderated by the stimulus presentation condition, suggesting that consumers place greater weight on extreme prices anchoring the range for internal reference prices than for external reference prices.

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Section: Reference Pricesmentioning

confidence: 94%

Section: Reference Pricesmentioning

confidence: 94%

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confidence: 99%

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Reference Price and Price Perceptions: A Comparison of Alternative Models

Niedrich¹,

2001

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“…We should be careful about developing a list of "heuristics" or decision short cuts based on single studies (i.e., the n=1 problem (Wells 2001)). To illustrate, Thomas (2013) cites the "frequency of discounts" heuristic based on research reported by Alba et al (1994Alba et al ( , 1999. In that research, pitting one store that infrequently used relatively large discounts (discount magnitude) against another store that frequently used small discounts (discount frequency) over 36 trials, respondents judged the frequently discounted store as having overall lower prices.…”

Section: Cognition Heuristics and Emotionsmentioning

confidence: 99%

Some reflections on an appraisal of behavioral price research (part 1)

Cheng

Monroe

2013

AMS Rev

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The authors reflect on the commentators' comments and add some additional thoughts about the current state of behavioral price research.Keywords Behavioral price research . Price information processing . Emotional side of price . Differential price threshold When we started to review and assess the research domain previously referred to as behavioral pricing research, little did we realize the actual scope, extent and significance of this research area since its beginning. While Kent has been involved in behavioral price research for more years than he admits, and has contributed to its expanding reach, nevertheless it became clear early on that it would take multiple essays to review and assess this research domain. As the commentators have observed, there is still a need for much more research to understand how people perceive and respond to prices and price information. At the outset of this reflection, we reiterate that the concept of buyers' behavioral responses to price really is the core of this field of research.While it may seem a trivial point to some, we want to affirm that the research area in question should be called behavioral "price" research because at the core of the research is the variable of "price" and not a study of "pricing" as a practice. Moreover, although psychology remains one major part of the research domain, it is broader than price psychology (Thomas 2013). There are also cultural, sociological, as well as economic aspects to the underlying issue of how people perceive, process and respond to price information (Rao 2013). Consequently, labeling this area of inquiry as behavioral price research is more inclusive and accurate.Why should one take the time and effort to review and appraise an area of research? In a nutshell, it is less about determining what we may know about the underlying area of interest but rather, as the commentators indicate, it is more about documenting what we do not know and thereby, hopefully guide future research efforts. In most areas of inquiry, knowledge grows by bits and pieces, and generally, in a somewhat haphazard way. Individual research efforts, though relatively small in the overall scheme of things, nevertheless can have a large cumulative effect. Unfortunately, researchers are not rewarded well, either by their peers or institutions, to integrate a disparate set of research efforts within a research domain. Sadly, in marketing, the documenting of what we know and do not know is infrequently accomplished. As the commentators note, previous reviews such as that by Monroe (1973) and Monroe and Lee (1999) have spurred additional research on issues related to how price information influences buyer behavior. It is in this vein that we aim to push the frontier in behavioral price research.In this first of a planned series of appraisals, beyond documenting what we do and do not know, we clarify some misconceptions, offer new insights, and provide explicit definitions of the four fundamental core concepts behind how people perceive, process and ...

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“…Accordingly, price promotions are a popular tool to increase sales (e.g. Alba, Mela, Shimp, & Urbany, 1999;Blattberg, Briesch, & Fox, 1995). Price estimates are commonly considered to be a function of the information a consumer has about the product (e.g.…”

Section: Introductionmentioning

confidence: 99%

Different strategies for evaluating consumer products: Attribute- and exemplar-based approaches compared

Scheibehenne

Helversen

Rieskamp

2015

Journal of Economic Psychology

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JEL classification: D12 M31PsycINFO Classification: 2340 3900 3920 Keywords:Consumer behavior Mathematical modeling Judgment and decision making Bayesian statistics a b s t r a c t Consumers' purchase decisions depend on whether a product is perceived as a bargain or as overpriced. But how do consumers evaluate sales prices? The standard approach in economics, psychology, and marketing suggests that consumers' estimates are best described by a attribute-based or piecemeal strategy that integrates information about products in a linear additive fashion. Here, we outline and test an alternative theoretical approach from the categorization literature suggesting that consumers sometimes follow an exemplarbased strategy that relies on similarity to previously encountered products. We hypothesize that people switch between these two estimation strategies depending on the context they face. To test this hypothesis, we conducted an experiment in which 64 participants repeatedly estimated the market price of different consumer products (bottles of wine). In one condition, the product prices could be well approximated with an attribute-based strategy whereas in the other condition an exemplar-based strategy worked best. Results of a subsequent testing phase indicated that participants switched between strategies depending on the structure of the presented sets. These results show that people rely on different strategies to estimate market prices, which should influence people's consumption behavior. The results suggest that theories on categorization learning can provide a deeper insight into behavior in an economic context and allow predicting consumer behavior more accurately.

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The Effect of Discount Frequency and Depth on Consumer Price Judgments

Abstract: pricing camp. 'Because the Alba et al. research is cited repeatedly, we have removed the year of publication to facilitate exposition.

Cited by 182 publications

References 45 publications

Reference Price and Price Perceptions: A Comparison of Alternative Models

Reference Price and Price Perceptions: A Comparison of Alternative Models

Some reflections on an appraisal of behavioral price research (part 1)

Different strategies for evaluating consumer products: Attribute- and exemplar-based approaches compared

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