Reference prices in retail advertisements: Moderating effects of market price dispersion and need for cognition on consumer value perception and shopping intention

Document Type

Article

Publication Title

Journal of Product & Brand Management

ISSN

1061-0421

Volume

13

Issue

6

DOI

10.1108/10610420410560280

First Page

379

Last Page

389

Publication Date

10-1-2004

Abstract

One main concern regarding the use of reference prices in advertisements relates to the possibility of deception due to consumers' positive response towards exaggerated or implausible claims. This paper examines the moderating roles of a contextual variable-market price dispersion for a product category, and that of an individual level variable-need for cognition, in influencing consumer evaluation of reference prices across two experiments. The results support the hypothesized effects of need for cognition and demonstrate that, for low need, for cognition individuals, increasing the level of reference price results in positive effects on value perception and shopping intention. © 2004, Emerald Group Publishing Limited

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