An Empirical Analysis of Latitude of Price Acceptance in Consumer Package Goods

  • Kalyanaram G
  • Little J
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Abstract

Scanner panel data analyses for sweetened and unsweetened drink categories (with four brands in each) support the presence of a region of price insensitivity around a reference price. The analyses also suggest that consumers with higher average reference price have a wider latitude of price acceptance. Consumers with a higher frequency of purchase (i.e., shorter average interpurchase time interval) are found to have a narrower latitude of price acceptance, because they are more aware of the range of price distributions. Finally, consumers with a higher average brand loyalty have a wider latitude of price acceptance, demonstrating greater tolerance of price fluctuations. [ABSTRACT FROM AUTHOR]

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Authors

  • Gurumurthy Kalyanaram

  • John D. C. Little

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