Preferences as a Determinant of the Measurement-Unit Effect for Unit Prices

Abstract

The extent to which alternative measurement units affect consumer behaviour is the subject of a handful of studies, which, however, measure this effect at an aggregate level. This presents a gap in that it is of great importance for marketing practice to understand whether the observed effect applies to all consumers to a similar extent. Investigating the product category bottled beer and applying an importance-focused post hoc segmentation, it is discovered that no measurement-unit effect occurs for brand-oriented customers. The unit of measurement in which a unit price is indicated substantially influences the preference structure for only one in five respondents. Both strategic and operational decisions with regard to unit prices should therefore not be based on an averaged market view, but on a segment-specific perspective.