Title: Consumers' evaluation of price differentials across competing stores

Authors: Sabrina Latusi, Manuela Raimondi

Addresses: Department of Economics, University of Parma, Via Kennedy, 6, 43100 Parma (PR), Italy. ' Department of Economics, University of Parma, Via Kennedy, 6, 43100 Parma (PR), Italy

Abstract: This paper investigates how consumers evaluate price differentials within brands across competing stores and the influence of prior beliefs on price perceptions. We investigated price frequency advantage and price magnitude advantage to determine their relative influence on consumers| perception of the total value offered by two |blind| competing supermarkets. The same cues were employed in a |clear| treatment in order to investigate how price comparison is affected by consumers| prior price image of the two competing supermarkets. Results indicated that the frequency cue exerted a dominating influence. Consumers perceived the store with frequent, shallow discounts as offering greater value.

Keywords: consumer perceptions; business competition; shops; retailing; retailers; shopping; stores; prior beliefs; frequency heuristics; grocery products; groceries; price frequency advantage; price magnitude advantage; product purchase frequency; product unit prices; pricing; consumer evaluation; price differentials; brands; total value; supermarkets; price image; frequency cues; shallow discounts; discounting.

DOI: 10.1504/IJBCG.2010.034163

International Journal of Business Competition and Growth, 2010 Vol.1 No.2, pp.108 - 116

Available online: 16 Jul 2010 *

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