Consumers' evaluation of price differentials across competing stores

Abstract: This paper investigates how consumers evaluate price differentials within brands across competing stores and the influence of prior beliefs on price perceptions. We investigated price frequency advantage and price magnitude advantage to determine their relative influence on consumers’ perception of the total value offered by two ‘blind’ competing supermarkets. The same cues were employed in a ‘clear’ treatment in order to investigate how price comparison is affected by consumers’ prior price image of the two competing supermarkets. Results indicated that the frequency cue exerted a dominating influence. Consumers perceived the store with frequent, shallow discounts as offering greater value.