How internal reference prices determine when a price’s location will influence consumer judgments

2021 ◽  
Author(s):  
Katina Kulow ◽  
Keith S. Coulter ◽  
Michael J. Barone ◽  
Xingbo Li
Keyword(s):  
Internal Reference ◽  
Reference Prices

Deal evaluation and purchase intention: the impact of aspirational and market‐based internal reference prices

2000 ◽  
Vol 9 (3) ◽  
pp. 179-192 ◽  
Author(s):  
Rajiv Vaidyanathan ◽  
Praveen Aggarwal ◽  
Donald E. Stem ◽  
Darrel D. Muehling ◽  
U.N. Umesh
Keyword(s):  
Purchase Intention ◽  
Internal Reference ◽  
Reference Prices ◽  
The Impact

scholarly journals When Internal Reference Prices and Price Expectations Diverge: The Role of Confidence

2007 ◽  
Vol 44 (3) ◽  
pp. 401-409 ◽  
Author(s):  
Manoj Thomas ◽  
Geeta Menon
Keyword(s):  
Reference Price ◽  
Internal Reference ◽  
Price Expectations ◽  
Price Expectation ◽  
Reference Prices ◽  
Internal Reference Price ◽  
Pricing Theory

When do internal reference prices differ from articulated price expectations? The authors propose that the internal reference price depends not only on the magnitude of the expected price but also on the confidence associated with this expectation. Four experiments delineate the effects of price expectation and confidence on the internal reference price. In Experiments 1 and 2, the authors manipulate repetition and examine the effects of repetition-induced confidence on price judgments. In Experiments 3 and 4, they manipulate confidence directly to investigate its effects on judgments. The results from all four experiments suggest that consumers with less confidence have higher internal reference prices than more confident consumers, even when they do not differ in their articulated price expectations. The authors discuss the implications of these results for pricing theory.

Customers’ use of prices and internal reference prices to evaluate new food products

2015 ◽  
Vol 117 (4) ◽  
pp. 1411-1424 ◽  
Author(s):  
Andreas Lemmerer ◽  
Klaus Menrad
Keyword(s):  
Panel Data ◽  
New Products ◽  
New Product ◽  
Specific Reference ◽  
Price Setting ◽  
Negative Effects ◽  
Internal Reference ◽  
Content Type ◽  
Reference Prices ◽  
Price Effects

Purpose – The purpose of this paper is to demonstrate the heterogeneous effects of gains and losses on the perception of new products. It seeks to argue that the heterogeneity in these effects (partly) stems from the price-perceived quality relationship which is more important for quality-seeking customers. Design/methodology/approach – A multilevel logit model was applied to household panel data on purchases of new yoghurt and sausage products in Germany. The multilevel model allowed to estimate heterogeneous price effects and accounted for the nested structure in panel data. Findings – Significant variation in the effects of gains, losses, and promotions were found. Internal reference prices (IRPs), which served as indicator of loss-averse vs quality-seeking customers, were found to moderate these effects. Monetary losses have less negative effects for customers with high IRPs. Negative interaction effects of IRPs with monetary gains and promotions indicate that quality-seeking customers are less attracted by gains and promotions. Practical implications – The heterogeneity in the price effects confirms the strategic importance of new product prices to influence customers’ perception of value. The price-quality relationship is an explanatory approach for heterogeneous price effects and should not be neglected in price setting. The inclusion of customer-specific reference price information yields deeper insights into customers’ use of prices to evaluate new products. Originality/value – This study is the first to estimate asymmetric gain and loss effects in the analysis of new product trial. A customer-specific view in price setting is emphasized by taking customer-specific reference prices into account.

DETERMINANTS OF INTERNAL REFERENCE PRICES � EMPIRICAL STUDY AND MANAGERIAL IMPLICATIONS

2013 ◽  
Vol 13 (3) ◽  
pp. 31-36
Author(s):  
Nadine Mahnke ◽  
Marie-Christin Papen ◽  
Antje H�tten ◽  
Florian Siems
Keyword(s):  
Empirical Study ◽  
Internal Reference ◽  
Reference Prices ◽  
Managerial Implications

The Effects of Internal and External Reference Prices on Travelers’ Price Evaluations

2017 ◽  
Vol 57 (8) ◽  
pp. 1068-1077 ◽  
Author(s):  
Choongbeom Choi ◽  
Anna S. Mattila
Keyword(s):  
Reference Price ◽  
Internal Reference ◽  
Reference Prices ◽  
Information Accessibility ◽  
External Reference ◽  
Hospitality Organizations ◽  
Managerial Implications ◽  
External Reference Price ◽  
Lodging Services ◽  
Tourism And Hospitality

The relative use of an internal reference price (IRP) versus an external reference price (ERP) becomes an important issue in the travel and lodging contexts as the increased promotional activity by destinations and hotels is likely to be based on price-comparison advertisements. However, there is little guidance on how tourism and hospitality organizations can use pricing structure to influence reference price, which is cardinal to travelers’ evaluation of price acceptability. Thus, the current research examines how pricing characteristics of the lodging services shift travelers’ sensitivity to two different types of reference prices, and therefore, influence their price evaluations. Compared with IRP, our findings indicate that individuals are more sensitive to and affected by ERP. The results also demonstrate that information accessibility and perceived diagnosticity are key mechanisms that lead to the differential effect of IRP versus ERP on travelers’ price evaluations. Relevant managerial implications are drawn regarding price and promotion strategies.

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