Price Promotion (In)consistency and Consumers’ Brand Evaluations: The Role of Reference Prices

Ashok Lalwani, David Silvera and Kent Monroe
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Ashok Lalwani: Indiana University
David Silvera: University of Texas at San Antonio
Kent Monroe: University of Illinois/University of Richmond

No 22, Working Papers from College of Business, University of Texas at San Antonio

Abstract: Research suggests that consumers evaluate a brand that is promoted now but never before less favorably than a brand promoted now and also promoted consistently in the past because the former promotional behavior generates negative attributions. The present research examines the alternative possibility that a brand promoted inconsistently (vs. consistently) may be evaluated more favorably because it has a higher reference price. Three studies contrasting these two explanations reveal that when consumers' reference prices for the competing brands under consideration are similar, attributions drive evaluations. However, when consumers' reference prices for the competing brands differ, reference prices drive evaluations.

Keywords: reference price; adaptation level; price promotion; attributions; brand evaluations (search for similar items in EconPapers)
JEL-codes: M31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2012-05-07
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