A Meta-Analysis of the Impact of Price Presentation on Perceived Savings

Journal of Retailing, 78 (2002) 101–118

18 Pages Posted: 21 Jan 2015

See all articles by Aradhna Krishna

Aradhna Krishna

University of Michigan, Stephen M. Ross School of Business

Richard Briesch

Southern Methodist University (SMU) - Marketing Department

Donald R. Lehmann

Columbia Business School - Marketing

Hong Yuan

University of Illinois at Urbana-Champaign - College of Business

Date Written: 2002

Abstract

Pricing is one of the most crucial determinants of sales. Besides the actual price, how the price offering is presented to consumers also affects consumer evaluation of the product offering. Many studies focus on “price framing,” i.e., how the offer is communicated to the consumer is the offered price given along with a reference price, is the reference price plausible, is a price deal communicated in dollar or percentage terms. Other studies focus on “situational effects,” e.g., is the evaluation for a national brand or a private brand, is it within a discount store or a specialty store. In this article, a meta-analysis of 20 published articles in marketing examines the effects of price frames and situations on perceived savings. The results reveal many features that significantly influence perceived savings. For instance, while both the percent of deal and the amount of deal positively influence perceived deal savings, deal percent has more impact. Further, the presence of a regular price as an external reference price enhances the offer value of large plausible deal and implausible deals, but not of small plausible deals. Thus, high value deals should announce the regular price, but not low value deals. Overall, the results have several useful insights for designing promotions.

Suggested Citation

Krishna, Aradhna and Briesch, Richard and Lehmann, Donald R. and Yuan, Hong, A Meta-Analysis of the Impact of Price Presentation on Perceived Savings (2002). Journal of Retailing, 78 (2002) 101–118. Available at SSRN: https://ssrn.com/abstract=2552238

Aradhna Krishna (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Richard Briesch

Southern Methodist University (SMU) - Marketing Department ( email )

United States

Donald R. Lehmann

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

Hong Yuan

University of Illinois at Urbana-Champaign - College of Business ( email )

Champaign, IL 61820
United States

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