Differential effects of pricebeating versus pricematching guarantee on retailers' price image

• Published in: The journal of product & brand management 2005-10, Vol.14 (6), p.393-399
• Main Authors: Desmet, Pierre, Le Nagard, Emmanuelle
• Format: Article
• Language: English
• Subjects: Competitive strategy; Corporate image; Experimentation; Pricing policy
• ISSN: 1061-0421
• DOI: 10.1108/10610420510624558

Purpose Seeks to study the effect of a lowprice guarantee PG on store price image and store patronage intention. Two kinds of lowprice guarantee are studied a pricematching guarantee PMG where the price difference is refunded and a pricebeating guarantee PBG where a retailer offers an additional compensation. Designmethodologyapproach A questionnaire is used to collect information on 180 nonstudent respondents in an experimental framework where lowprice guarantee dimension is manipulated through three advertisements for printers. Findings Findings are first, that PG indeed lowers store price image, increases the confidence that the store has lower prices and increases patronage intention second, that, compared with a PMG whose effects are positive but rather small, a PBG further lowers the store price image on the low prices dimension without increasing the intention to search for lower price, this intention being already rather high in the PMG condition third, that a larger effect is observed for nonregular customers. Research limitationsimplications Research limitations are associated with the data collection. For greater reality the study uses an existing retail chain, so specific effects coming from this chain could influence the results but this bias cannot be evaluated as the experiment involves one retailer only. Practical implications Practical implications are that price image can be manipulated without any change in pricing policy by a lowprice guarantee and that the interest to adopt a pricebeating guarantee is real. Originalityvalue The contribution of this study lies in its focus on a large PBG level that retailers already apply and in demonstrating that a PG depends on the relationship between the consumer and the retailer with a stronger effect on nonregular customers.