The influence of price reductions on shoppers' reference price and reservation price when upgrading to premium brands

Abstract

In order to encourage consumers to upgrade to a more expensive brand of a particular product, category price reduction on premium brands was provided as a stimulus. An interactive dynamic instrument was used to record the consumer's instantaneous response to changing price cues, and their levels of reference price and reservation price for their preferred premium brand were established. The contextual variables influencing these price levels are considered and discussed. From the research results it is evident that retailers while encouraging existing shoppers to switch to more expensive brands, would require to discount them differently depending on the contextual factors and shopper groups being targeted. ABSTRACT FROM AUTHOR Copyright of Journal of Targeting, Measurement & Analysis for Marketing is the property of Palgrave Macmillan Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts) In order to encourage consumers to upgrade to a more expensive brand of a particular product, category price reduction on premium brands was provided as a stimulus. An interactive dynamic instrument was used to record the consumer's instantaneous response to changing price cues, and their levels of reference price and reservation price for their preferred premium brand were established. The contextual variables influencing these price levels are considered and discussed. From the research results it is evident that retailers while encouraging existing shoppers to switch to more expensive brands, would require to discount them differently depending on the contextual factors and shopper groups being targeted. ABSTRACT FROM AUTHOR Copyright of Journal of Targeting, Measurement & Analysis for Marketing is the property of Palgrave Macmillan Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts)