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Semantics behind sale price: When does 'original' price matter?

Date:
November 19, 2013
Source:
University of Chicago Press Journals
Summary:
Consumers love a sale. In fact, when asked what makes a sale appealing, most simply say, "The price was good." But this answer fails to acknowledge that subjective factors also contribute to the perceived value of a deal. According to new research, it's possible to increase the perception of a good deal.
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Consumers love a sale. In fact, when asked what makes a sale appealing, most simply say, "The price was good." But this answer fails to acknowledge that subjective factors also contribute to the perceived value of a deal. According to new research published in the Journal of Consumer Research, it's possible to increase the perception of a good deal.

"We find that the more a consumer relies on the original price when trying to determine a product's worth, the more valuable they perceive the deal to be," write authors Christina Kan, Donald R. Lichtenstein (both University of Colorado), Susan Jung Grant (Boston University), and Chris Janiszewski (University of Florida). "If a retailer can get a consumer to pay more attention to a $179 original list price, and less attention to a $99 sale price, when assessing the worth of a winter jacket, then the $99 sale price will seem like a better deal."

The study research summarizes three situations in which list prices have more influence on the estimated worth of a product and, by extension, the perceived value of the deal. In three different experiments, the authors reveal that when a consumer focuses on competing product similarities, they are more likely to consider all of the available information when judging the worth of a product. That is, both the original list price and the sale price are used to determine the perceived worth of the product. In contrast, when a consumer focuses on product dissimilarities, the consumer is more likely to consider only the sale price when determining the subjective value of the product.

"This research provides insights for both retailers and consumers. Retailers can make a sales event more effective by encouraging the consumer to rely on the original price when assessing both the value of the product and the value of the deal. Additionally, by comparing product prices at competing retailers, consumers can lessen the impact of the original price on their assessment of the products' overall worth," the authors conclude.


Story Source:

The above post is reprinted from materials provided by University of Chicago Press Journals. Note: Materials may be edited for content and length.


Journal Reference:

  1. Christina Kan, Donald R. Lichtenstein, Susan Jung Grant, and Chris Janiszewski. Strengthening the Influence of Advertised Reference Prices through Information Priming. Journal of Consumer Research, April 2014

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University of Chicago Press Journals. "Semantics behind sale price: When does 'original' price matter?." ScienceDaily. ScienceDaily, 19 November 2013. <www.sciencedaily.com/releases/2013/11/131119193934.htm>.
University of Chicago Press Journals. (2013, November 19). Semantics behind sale price: When does 'original' price matter?. ScienceDaily. Retrieved August 30, 2015 from www.sciencedaily.com/releases/2013/11/131119193934.htm
University of Chicago Press Journals. "Semantics behind sale price: When does 'original' price matter?." ScienceDaily. www.sciencedaily.com/releases/2013/11/131119193934.htm (accessed August 30, 2015).

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