Students: Dissertation: Yuan-Shuh Danny Lii

Yuan-Shuh Danny Lii

ABSTRACT
This study proposes a model of price referencing that can be used as a conceptual framework for examining the effects of various price references on consumers’ price judgments. A new scheme of three-category taxonomy of price references—recall-based price references (RBPR’s), inference-based price references (IBPR’s), and point-of-purchase price references (POPPR’s)—is developed. Their effects, moderated by product knowledge, price consciousness, and product type, on consumers’ price judgments, are described in this model.

Hypotheses based on the relationships depicted in this model were formulated and tested using a 2 x 2 x 2 x 2 factorial design experiment involving three manipulated variables (POPPR’s) for two product types. Data to test the hypotheses were gathered using questionnaires mailed to consumers. Of the surveys mailed out, two hundred and forty questionnaires were valid and used for data analysis.

From the research findings, three significant conclusions regarding the referencing effects of consumers’ price judgments can be drawn. First, insofar as the surrogates of RBPR’s used here, the insignificance of RBPR’s suggests that consumers may not necessarily use the price information previously encountered as the reference for price evaluations. However, the significant effect of past prices of any other brands (PPAOB) implies that memory of price information may not demonstrate as brand specific but as categorical level price. The results also add empirical evidence that POPPR’s and IBPR’s significantly enter the price judgment decision.

Second, consumers may act as if the price of a product of purchase interest is compared with multiple price references. In order to better describe, explain, and predict consumers’ price judgments, RBPR’s (in the form of PPAOB), IBPR’s, and POPPR’s have to be explicitly integrated into the functional structure of a price referencing model.

Third, while the proposed moderating variables were found to influence some of the relationships between price references and price judgments, the findings were inconclusive. As an extension of the research a system dynamics model was created to explore how the research insights might be made more useful to business managers. The simulation model also provides additional knowledge into the dynamics of price referencing effect.

Wednesday, March 29, 2000
DISSERTATION COMMITTEE
L.P. Douglas Tseng, Chairman
Lewis N. Goslin
Nancy A. Perrin
Wayne W. Wakeland
James A. Paulson, Graduate Studies Rep.