Tuesday, May 31, 2011

Research - Price perception of Consumers - Very Good

http://www.sciencedaily.com/releases/2006/06/060623001231.htm

People Remember Prices More Easily If They Have Fewer Syllables

ScienceDaily (June 22, 2006) — In the first study to combine theories of working memory and numerical cognition, researchers find that every extra syllable in a product's price decreases its chances of being remembered by 20 percent. The researchers explain this effect by the fact that our phonological loop – an important regulator of memory – can only hold 1.5 to 2 seconds of spoken information.

"It is not the length of the price in digits that determines how difficult it is to memorize, but rather how many syllables this price has when read," explain Marc Vanheule, Gilles Laurent (both HEC School of Management, Paris) and Xavier Dreze (University of Pennsylvania). "Faster speakers are better at immediate price recall because they can fit more syllables into the phonological loop."

In a study forthcoming in the September issue of the Journal of Consumer Research, the authors show that people who use memorization techniques to shorten the number of syllables have better recall (e.g. read 5,325 as 'five three two five' as opposed to 'five thousand three hundred and twenty five'). Interestingly, the researchers also found that Hungarians, who tend to be faster speakers, have better price recall.

However, consumers store information both verbally and visually, say the researchers. Thus, unusual looking prices, such as $8.88, are recalled better than typical looking prices. People also store magnitude information about prices, remembering approximate figures when they forget the exact price: "We show that prices are encoded in multiple ways and that each form of encoding affects the way prices are remembered."

Reference: Marc Vanhuele, Gilles Laurent and  Xavier Dreze. "Consumers' Immediate Memory for Prices" Journal of Consumer Research. September 2006.


Small Sounds, Big Deals: How Do Number Sounds Influence Consumers?

ScienceDaily (Jan. 21, 2010) — Consumers remember the sounds of numbers in prices and associate certain sounds with value, according to a new study in the Journal of Consumer Research.

Authors Keith S. Coulter (Clark University) and Robin A. Coulter (University of Connecticut) studied the ability of number-sounds to convey meaning and influence price perceptions.

Previous research has demonstrated that people associate certain vowel and consonant sounds with perceptions of physical size. For example, front vowels (like a long a, e, i) and fricatives (like the English f, z, and s) have been shown to convey smallness, while back vowels (sounds like the /u/ in goose or the sound in foot) indicate largeness.

"Phonetic symbolism affects price perceptions because consumers typically process, encode, and retain numbers (and hence prices) in memory in multiple formats," the authors write. Consumers encode what a price looks like and sounds like along with a relative numeric value that the price represents (such as, "It is inexpensive").

"Thus, sounds associated with the auditory representation can impact the numeric value associated with the analog representation -- that is, small sounds can create the impression of big deals," the authors write.

The authors found that number-sound effects were more likely to occur when a frame of reference (a regular price) was provided. And sometimes, the sounds of numbers created false impressions of value. For example, participants perceived a $10 item marked down to $7.66 to be a greater discount than a $10 item discounted to $7.22.

"Number sounds impact price magnitude perceptions only when consumers mentally rehearse a sale price, as they might do when comparing items on a shopping trip," the authors write. "Further, mental rehearsal of the same sale prices characterized by small phonemes in one language and large phonemes in another language can yield differential effects."

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Sales Prices: 

How Right 

Digits Affect Perception of Discounts

ScienceDaily (Sep. 1, 2007) — The amount of the discount may be less important than the numerical value of the farthest right digit, explains a new study from the Journal of Consumer Research. Keith S. Coulter (Clark University) and Robin A. Coulter (University of Connecticut) are the first to identify a visual distortion effect that may influence how consumers look at sale prices.

The researchers show that "right-digit effect" influences consumer perception of sale prices. When the right digits are small, people perceive the discount to be larger than when the right digits are large. In other words, an item on sale for $211 from the original price of $222 is thought to be a better deal than an item on sale for $188 from an original price of $199, even though both discounts are $11.

In addition, the researchers find that when consumers view regular and sale prices with identical left digits, they perceive larger price discounts when the right digits are "small" -- less than 5 -- than when they are "large," or, greater than 5.

"When consumers examine multi-digit regular and sale prices in an advertisement, they read those prices from left-to-right. If the left (hundreds) digits are identical, consumers will pay less attention to those digits, and instead will focus primarily upon the disparate right-most (tens and units) digits in the price comparison process.," the authors explain.

"Our findings indicate that comparative price advertising can distort consumers' perceptions in ways unintended by the seller."

Reference: Keith S. Coulter and Robin A. Coulter. "Distortion of Price Discount Perceptions: The Right Digit Effect" Journal of Consumer Research: August 2007.

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