Units or Pounds? How Anchoring on Salient Price Information Influences Perceptions of Product Value

Abstract

This research investigates how price format (unit-based, such as “$1 each,” vs. weight-based, such as “$2 per pound”) affects consumer perceptions of product value. When judging a product's value, grocery shoppers might consider how much they will have to pay in exchange for how much product (e.g., in pounds) they are getting. The findings show that when making this determination, shoppers anchor on the nominal value (e.g., $1, $2) of the most visually salient price that is displayed to them. As a result of this anchoring bias, perceived value is worse (i.e., less attractive) for lower-weight products (e.g., weighing less than one pound) when the most visually salient price is weight-based rather than unit-based (e.g., for a 1/2-lb product: $2.00 per pound < $1.00 each). In contrast, for higher-weight products (e.g., weighing more than one pound), weight-based pricing is perceived more favorably than unit-based pricing (e.g., for a 2-lb product: $2.00 per pound > $4.00 each). The authors provide evidence for this price format effect in a series of six studies, including two field studies examining real purchase behavior and sales.