An Asymmetric Effect of Advertised Reference Prices on Demand for Competing Products
Ms. Christina KAN
PhD Candidate in Marketing
Leeds School of Business
University of Colorado Boulder
Marketplace evidence and academic literature show that advertised reference prices have a powerful impact on consumer price perceptions. To date, most research has investigated this impact on consumer responses to the product for which the advertised reference price is provided. In this talk, a) I will consider how sales with advertised reference prices affect demand for competing products, b) I will show evidence of novel empirical regularities about which products are more versus less affected by deals on competing brands, and c) I will show how the asymmetric effects on competing brands change when the deal is accompanied versus not accompanied by an advertised reference price. To provide background on what motivated me to look at this dependent variable, I begin by briefly reviewing findings from previous work (Kan et al., 2014 JCR). The focus of my talk will be on my more recent work regarding how the store environment affects patterns of effects of price discounting by competitors. I will show that these patterns of cross-effects are quite malleable as a function of retailer decisions.