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Contextual effects of product line pricing

Authors Ramaswami, Seshan
Issue Date 1994-08
Summary Two important considerations in designing a product line are depth of the line, as represented by the lowest and highest price end-points, and naming of the members of the line (whether the same brand name is shared by all members of the line). It is hypothesized that product line members will benefit in terms of both quality perceptions and choice shares in the presence of a very high-priced member; the reverse will be true in the presence of a very low-priced member. In a 10x23 factorial experiment, price end-points and product-line membership were manipulated between subjects, and product knowledge, brand familiarity and price position were manipulated within subjects. The dependent variables were brand choice and quality perceptions. The main hypotheses were supported, but primarily in low product knowledge and low brand familiarity conditions. The implications of the findings for the design and promotion of product lines are discussed.
Language English
Format Working paper
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