Consumer heterogeneity in internal reference price formation: exploring inherent personal characteristics in price information receptiveness: a multi-method approach

Abstract

This dissertation, consisting of three studies, demonstrates that inherent personal heterogeneity between people influences the formation of internal reference prices (IRP). In addition to exposure to price information, inner personality – psychological and physiological (“organic”) – traits and characteristics determine receptiveness toward price information. This research challenges the assumption that consumers who do not actively seek price information are irrational. Instead, it argues that such behavior can be a rational response to competing priorities like time, effort, and convenience in supermarket shopping.

The first study introduces a denomination and taxonomy for 92 RP concepts found in a review of 80 years of literature on IRP-formation and RP concepts. The second study examines how personal traits and lifestyle characteristics influence the use of RP concepts. Seven distinct consumer segments emerge, differing in the type and number of RP concepts applied in purchase decisions. The research indicates that traits such as price consciousness, sale proneness / deal sensitivity and brand loyalty, and even more so inherent lifestyle characteristics such as opinion seeking, mavenism and opinion leadership are more influential than socio-demographic factors in determining RP concept application. The third study introduces Price Information Involvement (PII) stances. The stance related application of heuristics regarding price information and price information internalization determine differences in which reference price information people apply, and how this shapes IRP formation differently. The study highlights price information internalization as a key factor affecting IRP latitude and accuracy relative to actual in-store prices.

The research contributes to the theory building in behavioral price research and the practice of pricing strategy. Overall, the research demonstrates that consumer heterogeneity in inherent personal traits and characteristics significantly influences how price information is perceived and applied in the formation of IRP.