The Effect Of Internal Reference Price And Consumer Characteristics On Offer-value

Price is the most sensitive thing in a consumer's purchase behavior. Large amount ofstudy reveal that internal reference price is a main factor in the processes of offer evaluation.Reference price is defined as a standard and memory-based price by which consumer use toevaluate a product offer price.This paper examines how consumer characteristics and the process by which consumerutilize multiple internal reference prices to evaluate the offer value. We examined twoalternative processes (unitized and non-unitized) that are proposed in earlier research. Themain consumer characteristics suggested here are consumer involvement, product knowledge,and price consciousness. We choose the running shoes and toothpaste. The results indicate that consumers use the same process (unitized model) to evaluate theoffer value. Consumers would integrate the five internal reference prices into a single,well-defined unitized internal reference price (UIRP). We also find that the relation betweenconsumer characteristics and offer value is significant.