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Consumer price perception can be altered: study

pricetag11Aug. 9, 2010 – A new study in the Journal of Consumer Research unlocks the key to making the price of a product seem less expensive to consumers.
pricetag11Aug. 9, 2010 – A new study in the Journal of Consumer Research unlocks the key to making the price of a product seem less expensive to consumers.

Consumers tend to perceive products as more expensive when they are
grouped with expensive items — and less expensive when grouped with
inexpensive ones, according to authors Marcus Cunha, Jr. and Jeffrey D.
Shulman (both University of Washington, Seattle). But the researchers
found that marketers can help consumers form more accurate perceptions
of prices by helping them create a "discriminating" mindset.

"In three experiments, we examine how perceptions of a price depend
on other prices in the set and on whether consumers want to
discriminate items or make a general inference about the prices in a
product category," the authors write.

Advertisements or displays that elicit a "generalization mindset"
can lead consumers to perceive a product price to be closely related to
other products in the vicinity. "The opposite price perceptions will
occur if a marketer's action encourages consumers to think about the
uniqueness of a product in the set," the authors explain. In this case,
when the consumer is being discriminating, a given price will be
perceived as less expensive if it is viewed in the presence of other
high-priced projects and more expensive when viewed in the context of
less-expensive products.

As an example, the authors propose a strategy for an in-store
display for a new MP3 player that emphasizes how the player is
different from its competitors. "Our research shows that this puts
consumers in a discrimination mindset," the authors explain. "As a
consequence, when examining prices, consumers will focus on the
relative differences of the prices leading to a lower-price perception
for this MP3 player when it is in a set with more expensive players but
to a higher-price perception when it is in a set with less-expensive
players.

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Marketers should note the way these situational factors affect consumers' judgments, the authors conclude.

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