Evaluating multidimensional prices

Authors: Herrmann, Andreas; Wricke, Martin

Source: Journal of Product and Brand Management, Volume 7, Number 2, 1998 , pp. 161-169(9)

Publisher: Emerald Group Publishing Limited

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Abstract:

The price at which a product is offered often does not consist of a single item of information, for example VW Golf, price; DM25,476. Instead, a multidimensional pricing system is used, e.g. the price comprises a down payment, monthly installments and a repayment period in months. Despite the considerable significance of offers of this type for marketing policy, no information is presently available to describe how a consumer integrates the individual price dimensions (e.g. down payment, monthly installments and number of repayment periods) to form a global judgment. This article derives hypotheses to explain the formation of a price judgment about multidimensional prices. Then, an empirical study designed to verify the formulated hypotheses is described. Finally, this article discusses the implications of the results of the study.

Keywords: Car Manufacturers; Consumer Behaviour; Decision Making; Marketing Strategy; Payments; Pricing Strategy

Document Type: Research article

DOI: http://dx.doi.org/10.1108/10610429810216973

Publication date: 1998-02-01