ABSTRACT
Effects of advertising appeals on consumers' reference prices in a new product innovation
Suh, Chan Joo, Ph.D.
Assistant Professor
Dept, of Business Administration
Sookmyung Women's University
This study examined the relationship between advertising appeals and consumer reference prices in a new product innovation. Specifically, consumer reference prices were operationalized as a price range concept and looked at changes at the 'width' and 'height' dimensions of the reference prices due to two different advertising appeals : the one, rational appeal and the other, emotional one. Also the effects of consumers' subjective knowledge and the brand name of a new product on consumer reference prices were investigated as contextual variables. 120 female subjects with kid(s) below 10 years old were randomly assigned to the cell of 2X2X2 mixed factorial design. The major finding of this study is that different advertising appeals for a new product affected consumers's reference price of the product differently. Under an emotional appeal, the subjects showed relatively wider 'width' of their reference prices for a new product. Theoretical and practical implications were discussed accordingly.