Reference Effects of Price and Promotion on Brand Choice Behavior

Lattin, James M.; Bucklin, Randolph E.

doi:10.1177/002224378902600304

Cited by 251 publications

(209 citation statements)

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“…Consumers use the expected price as a reference in forming price judgments (Thaler, 1985). Lattin and Bucklin (1989) use the term mental reference price to refer to essentially the same concept. We will use the term expected price in a way consistent with Thaler and Lattin and Bucklin as the price consumers expect to pay in the future for the product.…”

Section: Mental Prices and Price Perceptionmentioning

confidence: 99%

“…The expected price a consumer has for a product may have been formed as a function of past pricing of the product. For example, consumers who have purchased a product for a discounted price may develop a price expectation for the brand or the product based on the discounted price (Lattin & Bucklin, 1989). If so, then the discounted price may become the expected price.…”

Section: Mental Prices and Price Perceptionmentioning

confidence: 99%

“…Expected price is not only dependent on past price and promotional frame, but is also affected by the frequency with which a brand is promoted (Kalwani et al, 1990). Consumers come to expect frequently promoted products to be on promotion, and consumers who purchase a product on promotion may be less likely to purchase that same product when off-promotion (Lattin & Bucklin, 1989). Frequent promotions may be training consumers to buy products only when they are being promoted (Lattin & Bucklin, 1989).…”

Section: Promotional Framesmentioning

confidence: 99%

“…Consumers come to expect frequently promoted products to be on promotion, and consumers who purchase a product on promotion may be less likely to purchase that same product when off-promotion (Lattin & Bucklin, 1989). Frequent promotions may be training consumers to buy products only when they are being promoted (Lattin & Bucklin, 1989). Because the frame of a promotion has been shown to affect price perceptions (Chen et al, 1998), the choice of promotion type is important to marketing managers.…”

Section: Promotional Framesmentioning

confidence: 99%

“…Apparel marketers use many types of promotions to attract consumers to their firms, spending billions of dollars yearly to promote branded products (Lattin & Bucklin, 1989). It is the task of marketing managers to choose promotional activities that maintain company profits and concomitantly ensure consumer loyalty.…”

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confidence: 99%

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Promotional Frames' Influence on Price Perceptions of Two Apparel Products

Stanforth

Lennon

2001

Family & Consum Sci Res J

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The way in which promotions are framed raises important questions about consumer price judgments. Promotional information may be presented or framed in many ways, each affecting consumers' behavioral responses differently. As promotions are costly, it is important to determine the effect of promotional frames on consumers' price perceptions both during and after the promotional period. This study explores the differences in price perceptions of two apparel products when promotions were framed as either a price discount or a gift‐with‐purchase. The majority preferred the off‐price promotion to the gift‐with‐purchase. Off‐price promotions lowered price perceptions more than did gifts‐with‐purchase, and participants with lower price perceptions were less likely to buy the apparel products at the original price after the promotional period ended. These results illustrate the importance of promotional framing in forming consumer price perceptions.

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Section: Mental Prices and Price Perceptionmentioning

confidence: 99%

Section: Mental Prices and Price Perceptionmentioning

confidence: 99%

Section: Promotional Framesmentioning

confidence: 99%

Section: Promotional Framesmentioning

confidence: 99%

mentioning

confidence: 99%

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Promotional Frames' Influence on Price Perceptions of Two Apparel Products

Stanforth

Lennon

2001

Family & Consum Sci Res J

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Drawing inferences from logit models for panel data

Nordmoe

Jain

2000

Appl. Stochastic Models Bus. Ind.

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Logit models have been widely used in marketing to predict brand choice and to make inference about the impact of marketing mix variables on these choices. Most researchers have followed the pioneering example of Guadagni and Little, building choice models and drawing inference conditional on the assumption that the logit model is the correct speci"cation for household purchase behaviour. To the extent that logit models fail to adequately describe household purchase behaviour, statistical inferences from them may be #awed. More importantly, marketing decisions based on these models may be incorrect.This research applies White's robust inference method to logit brand choice models. The method does not impose the restrictive assumption that the assumed logit model speci"cation be true. A sandwich estimator of the covariance &corrected' for possible mis-speci"cation is the basis for inference about logit model parameters. An important feature of this method is that it yields correct standard errors for the marketing mix parameter estimates even if the assumed logit model speci"cation is not correct.Empirical examples include using household panel data sets from three di!erent product categories to estimate logit models of brand choice. The standard errors obtained using traditional methods are compared with those obtained by White's robust method. The "ndings illustrate that incorrectly assuming the logit model to be true typically yields standard errors which are biased downward by 10}40 per cent. Conditions under which the bias is particularly severe are explored. Under these conditions, the robust approach is recommended.

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