Price Perception

Price unquestionably has a pervasive influence in all purchase situations. In other words, price is the amount of economic outlay that must be sacrificed in order to engage in a given purchase transaction. Price can be perceived both in positive as well as negative role.

In the research paper of Lichtenstein, Ridgway and Netemeyer, seven price-related constructs—five consistent with a perception of price in its "negative role" and two consistent with a perception of price in its "positive role"— are used as independent variables to predict marketplace responses/behaviors in five domains.

Price Perception Construct:

Negative Role of Price

• Value consciousness: very concerned about low prices, but equally concerned about product quality

• Price consciousness: willing to go to extra effort to find lower price

• Coupon proneness: Redeeming coupons makes feel good

• Sale proneness: If a product is on sale, that can be a reason to buy it

• Price mavenism: Considered somewhat of an expert when it comes to knowing the prices of products

Positive Role of Price

• Price-quality schema: The higher the price of a product, the higher the quality

• Prestige Sensitivity: enjoy the prestige of buying a high priced brand

To assess the predictive validity of the price-related constructs, the seven constructs and marketplace responses/behaviors are tested in five different domains: (I) low price search outside the store, (2) generic product purchases, (3) price recall, (4) sale-responsive behavior, and (5) coupon-redemption behavior

• Low price search outside the store: The perception of price in its negative role should be related positively to active search for low price information outside the store, whereas the perception of price in its positive role should be related negatively to such search

• Generic product purchases: The low price associated with generic products is taken as indicative of product quality...