Tuesday, August 21, 2012

Consumers Perceive Risk When 'Price' Means More Than Money

From ScienceDaily

When companies combine different pricing structures -- such as asking for effort or information in combination with or instead of money -- consumers perceive a greater risk in the decision to buy.

That's according to University of Cincinnati research presented at the Aug. 15-17 Behavioral Pricing Conference in Detroit, Mich., by doctoral marketing student John Dinsmore. His paper is titled "Mental Accounting, General Evaluability Theory and the Framing Losses Posed by Partitioned Monetary and Nonmonetary Prices."

According to Dinsmore, shoppers routinely arrive at buying decisions by categorizing and evaluating prices, a process known as mental accounting that helps consumers judge a level of loss or sacrifice posed by pricing strategies.

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