This article considers the effects of reference prices in retail advertisements, that is, comparison prices cited as evidence of the savings represented by advertised prices. Reference prices are found to increase consumers’ estimates of the savings offered by advertised prices, though the full savings claims made by reference prices are not accepted. Results suggest that false reference prices do have the capacity to deceive but that deception is not guaranteed.
Get full access to this article
View all access options for this article.
References
1.
Advertising Age (1979), “AAF May Revive Local Ad Review Boards,” 50 (June 18), 1.
2.
Advertising Age (1980), “Sears and Free Speech,” 51 (May 26), 16.
3.
Chain Store Age Supermarkets (1977), “Kroger vs. FTC on Price Patrol Ads,” 53 (September), 84.
4.
Federal Trade Commission (1980), “FTC Guides Against Deceptive Pricing,” Title 16, Code of Federal Regulations, Section 233.
5.
FryJoseph N. and McDougallGordon H. (1974), “Consumer Appraisal of Retail Price Advertising,” Journal of Marketing, 38 (July), 64–67.
6.
GardnerDavid M. (1975), “Deception in Advertising: A Conceptual Approach,” Journal of Marketing, 39 (January), 40–46.
7.
GornGerald J. and GoldbergMarvin E. (1980), “Children's Responses to Repetitive Television Commercials,” Journal of Consumer Research, 6 (March), 421–424.
8.
GreenPaul E. and TullDonald S. (1970), Research for Marketing Decisions, Englewood Cliffs, NJ: Prentice-Hall, 485.
9.
JacobyJacob and SmallConstance B. (1975), “The FDA Approach to Defining Misleading Advertising,” Journal of Marketing, 39 (October), 65–68.
10.
MonroeKent B. (1973), “Buyers’ Subjective Perception of Price,” Journal of Marketing Research, 10 (February), 70–80.
11.
PrestonIvan L. (1976), “A Comment on ‘Defining Misleading Advertisement’ and ‘Deception in Advertising,’” Journal of Marketing, 40 (July), 54–60.
12.
RobertsonThomas S., RossiterJohn R., and GleasonTerry C. (1979), “Children's Receptivity to Proprietary Medicine Advertising,” Journal of Consumer Research, 5 (December), 247–255.
13.
SammonsWheeler (1919), Attracting and Holding Customers, Chicago: A. W. Shaw Company, 125.
14.
SewallMurphy A. and GoldsteinMichael H. (1979), “The Comparative Price Advertising Controversy: Consumer Perceptions of Catalog Showroom Reference Prices,” Journal of Marketing, 43 (Summer), 85–92.
15.
TaeuschCarl F. (1931), Policy and Ethics in Business, New York: McGraw-Hill, 474.
16.
VaughanFloyd L. (1928), Marketing and Advertising, Princeton: Princeton University Press, 123.
17.
WilkesRobert E. (1972), “Consumer Usage of Base Price Information,” Journal of Retailing, 48 (Winter), 72–85.
