Investigating the effect of external reference prices’ representation on consumers’ price evaluation and decision making with eye tracking method
DOI:
https://doi.org/10.15170/MM.2023.57.KSZ.01.07Keywords:
Behavioral Economics, Reference Price, Framing, Loss Aversion, Eye TrackingAbstract
The aims of the paper
According to the principle of behavioral economics, consumers frequently apply heuristics when deciding which can lead to biased perceptions and decisions. In our investigation we concentrated on some peculiar types of these heuristics, namely loss aversion, framing and reference point. In our research, our aim was to examine how the application of these phenomena in the display of external reference prices affects consumers’ price evaluation and decision-making.
Methodology
In our research we implemented a relatively new, eye tracking method and complemented it with interviews and a short attitudinal survey at the end of the experiment. We considered this important because this way, besides the eye tracking results - which provided the opportunity for quantitative as well as qualitative data analysis - we got to know additional consumer insights during interviews, while the attitude scale gave us the opportunity to group the participants of the experiment according to their price-conscious behavior.
Most important results
We found that those who fixated on the prices longer could recall them more precisely. Furthermore, we found, that people concentrate more on the original prices when evaluating a sale offer, therefore, it is advisable to highlight the original price, which is a reference point, instead of the sale price. Surprisingly we found a negative connection between price consciousness and the fixation duration spent on the prices.
Recommendations
In our research we found, that within a price offer it is necessary to indicate and highlight the original price to provide a reference point. On the other hand, within a complex offer, it is better to publish the price at the end of the offer, unless the advertiser's goal is to emphasize the price. Furthermore, we found that people with different price awareness perceive offers differently, so it may be worth considering this during consumer segmentation and targeting.
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