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Vulnerability to Low-Price Signals: An Experimental Study of the Effectiveness of Genuine and Deceptive Signals

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  • Dutta, Sujay

Abstract

Low-price guarantees help buyers make inferences about retailers’ prices. However, researchers are concerned that consumers might be vulnerable to relying on guarantees associated with high market prices. Furthermore, truly low-priced retailers that issue low-price guarantees might be vulnerable to consumers’ discounting of such guarantees. This article experimentally assesses these concerns and finds that the effects of adding a low-price guarantee to a low or high offer price on consumers’ pre-purchase perceptions depend on consumers’ confidence in their product category price knowledge and their decision involvement. The article explores the implications of the findings and provides directions for further research.

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  • Dutta, Sujay, 2012. "Vulnerability to Low-Price Signals: An Experimental Study of the Effectiveness of Genuine and Deceptive Signals," Journal of Retailing, Elsevier, vol. 88(1), pages 156-167.
    • Handle: RePEc:eee:jouret:v:88:y:2012:i:1:p:156-167
    DOI: 10.1016/j.jretai.2011.08.003
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    References listed on IDEAS

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    1. Christopher P. Blocker & Kenneth C. Manning & Carlos A. Trujillo, 2023. "Beyond radical affordability in the base of the pyramid: The role of consumer self‐confidence in product acceptance," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 619-647, January.
    2. Dutta, Sujay & Banerjee, Somak & Johnson, Aaron & Biswas, Abhijit, 2022. "Overcoming the challenge of low familiarity: Can a weakly familiar brand signal quality with exceptionally strong warranty?," Journal of Business Research, Elsevier, vol. 141(C), pages 737-754.
    3. Ouesleti, Bilel & Costa-Font, Montserrat & Kallas, Zein & Chema Gil, Jose Maria, 2015. "Determinant Factors Affecting The Point of Purchase Selection: valuation and Perceptions," 2015 Conference, August 9-14, 2015, Milan, Italy 212603, International Association of Agricultural Economists.
    4. Yunhui Huang & Kai H. Lim & Zhijie Lin & Shunping Han, 2019. "Large Online Product Catalog Space Indicates High Store Price: Understanding Customers’ Overgeneralization and Illogical Inference," Information Systems Research, INFORMS, vol. 30(3), pages 963-979, September.
    5. Thomas, Veronica L. & Mangus, Stephanie M. & Bock, Dora E., 2023. "Would you do me a favor? How salesperson favor requests positively affect consumers’ perceptions of negotiations☆☆," Journal of Business Research, Elsevier, vol. 155(PA).
    6. Krishnan, Balaji C. & Dutta, Sujay & Jha, Subhash, 2013. "Effectiveness of Exaggerated Advertised Reference Prices: The Role of Decision Time Pressure," Journal of Retailing, Elsevier, vol. 89(1), pages 105-113.
    7. Isabel P. Riquelme & Sergio Román, 2023. "Personal antecedents of perceived deceptive pricing in online retailing: the moderating role of price inequality," Electronic Commerce Research, Springer, vol. 23(2), pages 739-783, June.
    8. Hsin‐Hui Lin & Pin‐Han Chen & Chih‐Lun Wu, 2023. "Exploring the price anchoring effect in mobile commerce: An experimental study," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1601-1623, April.

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