Price Value Image
The price value image is defined as the consumers’ perceived quality and sacrifice when comparing one store’s price level to one or more other stores (Grewal, Krishnan, Baker, and Borin 1998; Teas and Agarwal 2000). Price value is identified as one of the price image dimensions and defined as an outcome of a trade-off between sacrifices and utilities derived from the product and store attributes in retail settings (Zielke 2006, 2010). That is, consumers form price value images based on their evaluations of the price level and quality/performance (Dodds and Monroe 1985; Sweeney and Soutar 2001; Zeithaml 1988; Zielke 2006). If the perceived quality/performance is more than an individual’s reference price, then it enhances the buyers’ price value perceptions. Therefore, it is expected that when a consumer’s perceived value toward products at a retail store is high, the OSPI will increase. That is, the price value image will have a positive effect on the OSPI. Hypothesis 1 is formulated as follows:
Hypothesis 1: The price value image has a positive impact on OSPI.
Price Rewards Image
The price rewards image is defined as the consumers’ perceptions of rewarding benefits offered by a retail store (De Wulf, Odekerken-Schröder, and Iacobucci 2001; Zielke 2006). Consumers care about tangible benefits/rewards, such as pricing or gift incentives, earned by regular customers that a retail store offers in return for loyalty (De Wulf, Odekerken-Schröder, and Iacobucci 2001). As such, tangible rewards influence consumers’ perceptions of a retail store (Peterson 1995; Sharp and Sharp 1997). Customers might have difficulty evaluating single product prices because their price knowledge is limited and the acquisition of exhaustive price information is difficult (Desai and Talukdar 2003). However, a retail store can enhance its OSPI by offering gifts or rewards to customers. For example, researchers have shown that price discounts and discount sizes influence consumers’ perceived value and a store’s price image (Cox and Cox 1990; Grewal, Marmorstein, and Sharma 1996). In addition, loyalty/reward programs that reward and encourage loyal behaviors are effective marketing efforts for repeat purchases and those programs are likely to negate the negative effects of prices (Noone and Mount 2008; Sharp and Sharp 1997). Thus, we argue that consumers may use special offers or rewards as cues by which to form an OSPI (Zielke 2006). Therefore, it is expected that the price rewards image will have a positive effect on OSPI. Hypothesis 2 is formulated as follows:
Hypothesis 2: The price rewards image will have a positive impact on OSPI.
Price Fairness Image
The price fairness image is defined as the extent to which a consumer’s assessment of a retail store’s price and the price of other comparative retail stores is reasonable, acceptable, or justifiable (Campbell 1999; Vaidyanathan and Aggarwal 2003). According to the equity theory, Xia, Monroe, and Cox (2004) indicated that in an exchange relationship, the payout and outcome ratio, which compares an individual to others, should be equal. The similarity between comparable parties will have an impact on the perception of price fairness. Thus, the price fairness image is subjective and tends to be based on a price comparison between retail stores. Researchers also indicate that people tend to compare and categorize things or people with a reference point retrieved from their memory. Similarly, consumers also compare prices between retail stores. The price comparisons between retail stores will develop a consumer’s internal reference price (a range of expected prices) through an assimilation and contrast process (Grewal and Compeau 1992), and influence the consumer’s perception of a retail store’s price level. When the prices at a retail store are perceived as fair, falling within the range of what consumers view as expected prices, consumers form a positive attitude toward the prices at the retail store, and thus OSPI is likely to increase. That is, when consumers perceive a retail store’s prices as more reasonable than those of other retail stores, the OSPI should increase. Therefore, it is expected that price fairness image will have a positive effect on OSPI. Hypothesis 3 is formulated as follows:
Hypothesis 3: Price fairness image will have a positive impact on OSPI.
Price Pleasure Image
Price pleasure image is defined as consumers’ affect (e.g., happy or angry) toward prices at a retail store (Zielke 2006). Most of the previous studies in pricing were examined from a cognitive perspective. Despite the importance of affect in understanding consumer behavior, few studies have examined the role of affect in consumers’ response to price (O’Neill and Lambert 2001). An increasing number of researchers have indicated that affect plays an important role in developing a price image (O’Neill and Lambert 2001; Schindler 1998; Xia, Monroe, and Cox 2004; Zielke 2006). For example, O’Neill and Lambert (2001) indicated that the prices that consumers found at a retail store can sometimes be irritating. They found that affect, such as surprise, can influence consumers’ responses to the prices of products. Customers may generate emotional responses, such as happiness or anger, toward product prices at a retail store. A reduced price can cause consumers to feel excited and a sense of pleasure. Prior research has indicated that the price pleasure image is positively associated with price attitude (Zielke 2006) and that consumption feelings influence consumers’ perceived price image (Grace and O’Cass 2005). Positive consumption feelings enhance the consumers’ perceived hedonistic benefits. When a retail store’s product prices offer positive consumption feelings, OSPI will be enhanced. Therefore, it is expected that price pleasure image will have a positive effect on OSPI. Hypothesis 4 is formulated as follows:
Hypothesis 4: Price pleasure image will have a positive impact on OSPI.
OSPI and Repurchase Intentions
This research focuses on the overall store price image for the retail stores where consumers had previously shopped, so that the dependent variable examined in this study is repurchase intentions instead of purchase intentions. Repurchase intentions are a special type of purchase intentions (Lin and Chen 2009). Consumers could form purchase intentions because of advertising (Biswas and Blair 1991) or word of mouth (Jun, Cha, and Aggarwal 2011), even though they have not yet visited the retail store. Our research puts an emphasis on consumers’ repurchase intentions. That is, consumers are willing to revisit and make purchases after previous consumption experiences at a retail store (Schiffman and Kanuk 2004). Repurchase intention is defined as a tendency to recommend and a willingness to repurchase products/services at a retail store in the future (Desai and Talukdar 2003; Dickson and Albaum 1977). Price is one of the tools that marketers may use to face the market, either to attract and retain customers or fight against competitors. Consumers often make purchase decisions based on the price information of the products offered, and the perceived value of money has a significant positive effect on repurchase intentions (Grace and O’Cass 2005). Thus, we expect that the OSPI is an essential antecedent of consumers’ repurchase intentions toward a retail store. It is expected that the OSPI will enhance consumers’ repurchase intentions. Hypothesis 5 is formulated as follows:
Hypothesis 5: OSPI will have a positive impact on repurchase intentions.