Previous marketing research on the effects of price has tended to ignore the role of such moderating variables as competitive context and the availability of additional information. The authors presented subjects with forced-choice decisions in several product categories. Using a multinomial logit formulation to measure price sensitivity, they find relatively lower price sensitivity (1) when a brand is placed at the upper price-quality boundary of a choice set rather than in the middle, (2) when only brand names are provided as opposed to only quality ratings, and (3) when quality information is added to available brand-name information. They discuss the theoretical and managerial implications of these findings.
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