The
Influence of Price Presentation Order on Consumer Choice
Author:
Kwanho Suk, Jiheon Lee, and Donald R. Lichtenstein
Executive Summary
(PART)
Consumers frequently make choices
among purchase options that are ordered according to price. For example, many
major online stores choose to present their brand assortment in a menu-based
ascending or descending price ordered format, and they often provide a tool for
re-sorting the brands in the alternative format. In addition, many
brick-and-mortar retailers often offer choices in a menu format ordered
according to price. For example, this is one of the most common formats for
restaurant menus presenting meal options, for travel agencies presenting
vacation packages, for hotels presenting room packages, and for spectator
events (e.g., sporting events, Broadway plays) presenting seating options. To
date, this practice has occurred in the absence of any research on its effects
on consumer choice.
Using principles rooted in reference
dependence, the authors offer the “price order effect” hypothesis, which
predicts that consumers are more likely to choose higher-priced options when
the options are listed in descending price order. This effect is premised on
the notion that the top price in a price-ordered format becomes the initial
reference point for consumer evaluations. Therefore, subsequent prices in a
descending order become a price gain but a quality loss (on the basis of the
common perception of a positive price–quality relationship). Because losses
loom larger than gains in terms on returns to value, consumers are hesitant
trade off price gains for quality losses and thus choose higher priced brands.
By the same process, subsequent prices in an ascending order become a quality
gain but a price loss. Because consumers are hesitant trade off price losses
for quality gains, they tend to choose lower priced brands.
JOURNAL OF MARKETING
RESEARCH 10/1/12
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