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Consumer responses to offline and online low price signals: The role of cognitive elaboration

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  • Dutta, Sujay
  • Bhowmick, Sandeep

Abstract

Low price signals (LPS), pricing tools where retailers promise to match or beat competitors' prices, have been increasingly popular in offline and online markets. We compare consumer evaluation of offline and online LPS as a function of how deeply they process the signals. Results of an experiment indicate that regardless of retail media consumers accept an LPS as an indicator of low price when they do not elaborate sufficiently on the signal. However, at high levels of elaboration, consumers challenge the assumptions underlying their acceptance of the signal at lower levels of elaboration whereby they become more skeptical of an online signal than an offline signal resulting in lower efficacy of the former. Implications of these findings for consumer vulnerability to false low price signaling are discussed along with other theoretical and managerial implications. Additionally, directions for future research are provided.

Suggested Citation

  • Dutta, Sujay & Bhowmick, Sandeep, 2009. "Consumer responses to offline and online low price signals: The role of cognitive elaboration," Journal of Business Research, Elsevier, vol. 62(6), pages 629-635, June.
  • Handle: RePEc:eee:jbrese:v:62:y:2009:i:6:p:629-635
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    References listed on IDEAS

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    2. Falk, Tomas & Kunz, Werner H. & Schepers, Jeroen J.L. & Mrozek, Alexander J., 2016. "How mobile payment influences the overall store price image," Journal of Business Research, Elsevier, vol. 69(7), pages 2417-2423.
    3. Weathers, Danny & Swain, Scott D. & Makienko, Igor, 2015. "When and how should retailers rationalize the size and duration of price discounts?," Journal of Business Research, Elsevier, vol. 68(12), pages 2610-2618.
    4. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    5. Nicolau, Juan Luis & Sellers, Ricardo, 2010. "The quality of quality awards: Diminishing information asymmetries in a hotel chain," Journal of Business Research, Elsevier, vol. 63(8), pages 832-839, August.
    6. Ladeira, Wagner & Rasul, Tareq & Perin, Marcelo Gattermann & Santini, Fernando, 2023. "The bright side of disorganization: When surprise generates low-price signals," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    7. Dutta, Sujay, 2012. "Vulnerability to Low-Price Signals: An Experimental Study of the Effectiveness of Genuine and Deceptive Signals," Journal of Retailing, Elsevier, vol. 88(1), pages 156-167.

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