the moderating effect of retail Store formats
Retail store formats differ in several aspects, such as location, price, service, variety of merchandise, and shopping environment. Previous research has indicated that different retail store formats induce different consumer responses, such as price images and repurchase intentions (e.g., Grace and O’Cass 2005; Zielke 2010). Previous studies indicated that store environment influences consumers’ price perceptions (Grewal and Baker 1994; Thaler 1985). Specifically, Grewal and Baker (1994) showed that ambient, social, and design factors impact the price acceptability of a picture frame. Thaler (1985) found that the store format influences the price that consumers are willing to pay for a product. It is expected that the way that consumers form an OSPI will be different across different retail store formats. The retail store formats examined in this research are discount and department stores. This research defines discount stores as mass-merchandise stores focusing on self-service and low prices, and department stores as massmerchandise stores focusing on high-quality products and customer service (Grace and O’Cass 2005; Merrilees and Miller 1996).
It is likely that consumers place different weights on the price image aspects in developing an OSPI because of various retail store images. Prior research has suggested that price value image and price fairness image are important with regard to consumers developing an OSPI for retail stores (Campbell 1999; Zielke 2010). However, Zielke (2006) indicated that the price value image also reflects consumers’ perceptions of the product quality and store attributes of a retail store. Discount stores could be perceived as cheap in terms of price level, but not necessarily in value. Thus, it is likely that consumers place a heavier weight on the price value image in developing the OSPI of department stores than that of discount stores. In addition, due to the relatively high price level of department stores, consumers have to pay higher costs for quality products. When prices are higher, consumers look for cost increase justifications (Kahnemann, Knetsch, and Thaler 1986). It is likely that they weigh the price fairness image in developing the OSPI of department stores more than that of discount stores. Due to the low price image of discount stores, consumers would not expect extra rewards or emotional responses to product prices at discount stores. In contrast, because of the high quality and customer service images of department stores, consumers might expect high-quality products that are worth the money, extra rewards, and good emotional responses when shopping at department stores. It is expected that the effects of the price rewards image and the price pleasure image on the OSPI would be higher for department stores than for discount stores. Hypothesis 6 is formulated as follows:
Hypothesis 6: Retail store formats moderate the effects of the price value image, the price rewards image, the price fairness image, and the price pleasure image on the OSPI. Specifically, the effect of (a) the price value image, (b) the price rewards image, (c) the price fairness image, and (d) the price pleasure image on the OSPI is stronger for department stores than for discount stores.