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Constructing an internal reference price for product innovations


Peschel, Anne Odile; Zielke, Stephan; Scholderer, Joachim (2016). Constructing an internal reference price for product innovations. In: Marketing in the Age of Data: 45th Annual Conference of the European Marketing Academy, Oslo, 24 May 2016 - 27 May 2016, 1-8.

Abstract

The internal reference price is the decisive standard against which observed prices are compared to evaluate whether a product offering is a good deal or not. If no reference price has been established for a product category, such as for product innovations, is it uncertain against which standard the price can be compared. Despite extensive research on the use of reference prices, little is known how an internal reference price is constructed for an unfamiliar product category. We conduct two experiments to support our two suggested mechanisms. Reference prices for an unfamiliar product category can either be constructed through repeated exposure to incidental price information or through transfer of price information from a familiar, similar product category to an unfamiliar product category, but only if the product value and price are correlated; a condition often not considered in product innovation testing.

Abstract

The internal reference price is the decisive standard against which observed prices are compared to evaluate whether a product offering is a good deal or not. If no reference price has been established for a product category, such as for product innovations, is it uncertain against which standard the price can be compared. Despite extensive research on the use of reference prices, little is known how an internal reference price is constructed for an unfamiliar product category. We conduct two experiments to support our two suggested mechanisms. Reference prices for an unfamiliar product category can either be constructed through repeated exposure to incidental price information or through transfer of price information from a familiar, similar product category to an unfamiliar product category, but only if the product value and price are correlated; a condition often not considered in product innovation testing.

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Additional indexing

Item Type:Conference or Workshop Item (Paper), refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Informatics
Dewey Decimal Classification:000 Computer science, knowledge & systems
Language:English
Event End Date:27 May 2016
Deposited On:16 Feb 2017 08:07
Last Modified:16 Feb 2017 19:30
Publisher:EMAC
Series Name:Proceedings of the 45th EMAC Conference
Other Identification Number:merlin-id:14599

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