Consumers’ store-level price knowledge: Why are some consumers more knowledgeable than others?

• Published in: Journal of retailing 2005-01, Vol.81 (4), p.319-329
• Main Authors: Mägi, Anne W., Julander, Claes-Robert
• Format: Article
• Language: English
• Subjects: Consciousness; Consumer attitudes; Consumers; Knowledge; Pricing policies; Retail stores; Store-price knowledge; Structural equation modeling; Studies
• ISSN: 0022-4359; 1873-3271; 1873-3271
• DOI: 10.1016/j.jretai.2005.02.001

What consumers know or think they know about stores’ relative price levels is an important research area from both a societal as well as a retail perspective. This study investigates the determinants of objective as well as subjective store-price knowledge. Using structural equation modeling, the effects of price consciousness, income, education, and three forms of price-related experience on the two knowledge dimensions, as well as the relationship between objective and subjective knowledge, are tested. Whereas out-of-store price search had positive effects on both subjective and objective price knowledge, the two other types of experience, number of stores shopped, and length of residence in the market only affected objective price knowledge, indicating that the two knowledge dimensions are determined differently. Furthermore, price consciousness had a larger effect on subjective than on objective knowledge. Finally, subjective and objective store-price knowledge were not significantly related in this study.