THOMAS, MENON - INTERNAL REFERENCE PRICE & PRICE EXPECTATIONS

Question 1

INTERNAL REFERENCE PRICE

Answer 1

• price point on subjective judgement scale
• below = price is low
• above = price is high
• can be influenced by confidence,fatigue, motivation…

Question 2

ARTICULATED PRICE EXPECTATION

Answer 2

• price magnitude that consumers articulate as a fair price

Question 3

KEY FINDINGS

Answer 3

• internal reference price depends on confidence associated
• it is more malleable than articulated price expectation
• repetition increases consumers confidence in price knowledge (frequent buyers)
• repetition induced confidence can affect the internal reference price

= consumers with less confidence have higher internal reference prices (compared to high confidence consumers) even when articulated price expectations dont differ