Header

UZH-Logo

Maintenance Infos

Reference price formation for product innovations – the role of consistent price-value relationships


Peschel, Anne Odile; Zielke, Stephan; Scholderer, Joachim (2016). Reference price formation for product innovations – the role of consistent price-value relationships. Proceedings in Food System Dynamics, 2016:101-103.

Abstract

When deciding between product alternatives, consumers have to compare the observed prices to their internal reference price to determine whether the offer is a good deal or not. For product innovations, for which no reference price has been established, it is unclear against which standard the observed price is compared. Despite extensive research on the use of reference prices, little attention has been devoted to the formation of an internal reference price for an unfamiliar product category. We suggest two mechanisms of how reference prices are constructed and find support for these in two experiments. Reference prices for an unfamiliar product category can either be formed through repeated exposure to incidental price information or through transfer of price information from a familiar, similar product category to an unfamiliar product category. Crucial is however that the product price-value relationship is consistent; a condition often not accounted for in product innovation testing.

Abstract

When deciding between product alternatives, consumers have to compare the observed prices to their internal reference price to determine whether the offer is a good deal or not. For product innovations, for which no reference price has been established, it is unclear against which standard the observed price is compared. Despite extensive research on the use of reference prices, little attention has been devoted to the formation of an internal reference price for an unfamiliar product category. We suggest two mechanisms of how reference prices are constructed and find support for these in two experiments. Reference prices for an unfamiliar product category can either be formed through repeated exposure to incidental price information or through transfer of price information from a familiar, similar product category to an unfamiliar product category. Crucial is however that the product price-value relationship is consistent; a condition often not accounted for in product innovation testing.

Statistics

Altmetrics

Downloads

9 downloads since deposited on 22 Feb 2017
9 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Informatics
Dewey Decimal Classification:000 Computer science, knowledge & systems
Language:English
Date:19 February 2016
Deposited On:22 Feb 2017 16:45
Last Modified:22 Feb 2017 16:49
Publisher:CentMa GmbH
ISSN:2194-511X
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.18461/pfsd.2016.1611
Official URL:http://centmapress.ilb.uni-bonn.de/ojs/index.php/proceedings/article/view/1611
Other Identification Number:merlin-id:14595

Download

Download PDF  'Reference price formation for product innovations – the role of consistent price-value relationships'.
Preview
Content: Published Version
Filetype: PDF
Size: 169kB
View at publisher