Carlos Lourenço
| Date of PhD defense: | 24 November 2010 |
| Title of thesis: | Consumer Models of Store Price Image Formation and Store Choice |
| ISBN: | 978 90 5668 263 7 |
| Promotores: | Prof.dr. Els Gijsbrechts |
Abstract:
When deciding where to buy, consumers resort not only to ‘hard’ store cues such as location, but also to perceptions, namely regarding the retailer’s expensiveness or store price image (SPI). Despite the importance of SPIs and the large dollar sums involved in managing them, research about the topic is sparse and has left retailers with little guidance to set their pricing and SPI strategies. The three essays in this dissertation contribute to filling this gap. In the first essay, we propose and test a framework where different category prices are integrated in the formation of SPI. We argue that a product category’s ability to signal SPI and work as a lighthouse category is determined not only by its share-of-wallet but also by a number of characteristics that drive the diagnosticity and accessibility of its prices. In the second essay, we develop a dual retail price model of store choice, where actual week-to-week basket prices affect store patronage directly, but also indirectly, through the formation of SPIs. In the third essay, we empirically test the effects of national brand (NB) introductions on a hard discounter’s price and quality image. A number of our findings bring surprising new insights to light. In contrast with conventional wisdom, rather than fresh food items, lighthouse categories are those related to home and personal care – products for which there are strong incentives to track prices, e.g because of their large price spread. Second, much of the impact of changing store prices on store choice occurs through the indirect route, leading to implications for store traffic far beyond the week of the price change. Third, NBs appear to hurt the favorable price image of a hard discounter while leaving its perceived quality unchanged. Managerial implications of these findings are discussed.
Global / English