Consumer Awareness, Understanding and Usage of Unit Pricing

15 Pages Posted: 22 Sep 2003

See all articles by Vincent-Wayne Mitchell

Vincent-Wayne Mitchell

City University London - Faculty of Management

David Lennard

Independent

Peter McGoldrick

Trinity College (Dublin) - Department of Economics

Abstract

The debate continues over whether prescribed quantities or unit pricing offers the best method to enable consumers to make value-for-money comparisons. In theory, the 'informed' consumer should benefit from being given unit-price information to identify optimum purchases; in practice, however, it would appear that many consumers do not use the data. Although unit pricing can reduce the level of confusion caused by large product ranges and large numbers of unique size-price combinations, results of a survey of over 1000 people showed that: 31% of the sample did not understand how unit pricing was meant to help them compare products; 35% could not be bothered to look at unit prices and 28% stated that unit pricing was too difficult to use. Those least likely to look at unit prices are women, the least educated and consumers aged 18-34. The research investigated why consumers do not use unit-price information and found: some consumers do not possess the cognitive ability to process the information and feel unit pricing is too complicated to use; some products are not comparable, which makes unit prices misleading; many shops do not provide unit-price information; unit-price information was felt unnecessary when evaluating products with few or no alternative sizes or brands; unit-price comparisons take too much time; consumers use simpler strategies for getting value for money, e.g. volume discount heuristic, own brands, special offers, x% free, reward points, etc. The paper explores policy and retailer implications for unit pricing and examines recommendations for government.

Suggested Citation

Mitchell, Vincent-Wayne and Lennard, David and McGoldrick, Peter, Consumer Awareness, Understanding and Usage of Unit Pricing. British Journal of Management, Vol. 14, pp. 173-187, June 2003. Available at SSRN: https://ssrn.com/abstract=416326

Vincent-Wayne Mitchell (Contact Author)

City University London - Faculty of Management ( email )

London
United Kingdom
+44 (0) 20 7040 5108 (Phone)
+44 (0) 20 7040 8328 (Fax)

David Lennard

Independent

No Address Available

Peter McGoldrick

Trinity College (Dublin) - Department of Economics ( email )

Dublin 2
Ireland

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