Internal Reference Price Scale

What it measures

Measures consumers' internal reference prices — the price standards stored in memory that serve as anchors for evaluating whether an observed price is acceptable, a bargain, or a rip-off. Expected price captures what consumers anticipate paying for a product category. Acceptable range captures the latitude of prices within which a purchase is considered reasonable. Fair price captures the price consumers believe morally should be charged, independent of market conditions. Internal reference prices are the cognitive benchmarks that mediate the effect of advertised prices on purchase likelihood and price fairness perceptions. Understanding consumers' reference price structures is essential for promotional pricing, comparative price advertising ('was/now' pricing), and revenue management strategy.

Representative items

• What price would you normally expect to pay for this product? (Expected Price)
• What is the lowest price you would expect to pay for this product? (Lower Bound)
• What is the highest price you would be willing to pay for this product? (Upper Bound)
• What price would you consider a fair price for this product? (Fair Price)
• How reasonable does the price shown in this ad seem to you?

Citation

Biswas, A., & Blair, E.A. (1991). Contextual effects of reference prices in retail advertisements. Journal of Marketing, 55(3), 1–12.