Articles / Price / Recommended Reading / Relationship / Theory

Psychological Distance and the Dual Role of Price

Image credit: http://www.jstor.org/

Image credit: http://www.jstor.org/

Psychological Distance and the Dual Role of Price
Torsten Bornemann, Christian Homburg

Journal of Consumer Research
Volume 38, Number 3, October 2011
The University of Chicago Press

When evaluating a product, consumers may interpret price information as either an indicator of quality or an indicator of monetary sacrifice. Psychological distance alters the weight consumers attach to these opposing roles of price. From both a temporally and a socially distant perspective, the price-perceived quality relationship is more pronounced. From a temporally proximal perspective, the price-perceived sacrifice relationship is more pronounced. These effects stem from differences in the way consumers mentally construe price information. When consumers initially use price to judge a product for distant future consumption, it receives less attention as an indicator of sacrifice in a later evaluation for near future consumption. These findings have implications for prelaunch communication activities and preference elicitation methods such as conjoint analysis.

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