Retailer Price Image - An Introduction and Literature Review

This working paper aims to give an introduction to what we know about what makes up and influences the retailer’s price image: “the general belief about the overall level of prices that consumers associate with a particular retailer” (R. Hamilton & Chernev, 2013). What have been the main themes in academic price image research? The focus is on what relevant empirical evidence has been published and what conclusions can be drawn. We also provide some illustrative new empirical data. The paper is written as a first stop for academic researchers, students and retail practitioners interested in the area. The paper begins by discussing the background and relevance of the topic. We continue the first section by introducing a number of key theoretical concepts that are frequently used in the behavioral pricing and price image literature. We conclude by discussing the crucial role of consumer memory and decision making biases in understanding how consumers process information about retailers, their stores and prices. The empirical section covers many of the issues which in different research streams have been found to be of relevance to understanding how consumers process price information and how they react to cues which retailers attempt to manage every day. The final section attempts to wrap up and visualize the research area.