Same but different - The effect of the unit of measure on the valuation of a unit price |
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| Affiliation: | 1. Univ Rennes, CNRS, CREM – UMR 6211, 11 rue Jean Macé, CS 70803, 35708, Rennes Cedex 7, France;2. Univ Rennes, CNRS, CREM – UMR 6211, 11 rue Jean Macé, CS 70803, 35708, Rennes Cedex 7, France;3. Rennes School of Business, 2 rue Robert d''Arbrissel, 35065 Rennes, France;4. University Paris Dauphine-PSL, DRM MOST – UMR CNRS 7088, Place du Maréchal de Lattre de Tassigny, 75775, Paris Cedex 16, France;1. School of Marketing and International Business, Victoria University of Wellington, PO Box 600, Wellington, New Zealand;2. College of Business Zayed University Abu Dhabi Campus, P.O. Box 144534, Abu Dhabi, United Arab Emirates;3. College of Business Administration, American University in the Emirates, Dubai, United Arab Emirates;4. School of Business Administration, American University of Sharjah, PO Box 26666, Sharjah, United Arab Emirates;1. Qatar University, Qatar;2. Liverpool John Moores University, United Kingdom;1. Business Administration Department, National Taiwan University of Science and Technology, Keelung Road Sec.4, Taipei, 106335, Taiwan;2. Business Administration Department, National Taiwan University of Science and Technology, Keelung Road Sec.4, Taipei, 106335, Taiwan;3. Business Administration Department, National Taiwan University of Science and Technology, Keelung Road Sec.4, Taipei, 106335, Taiwan |
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| Abstract: | Unit prices are a ubiquitous phenomenon. The respective legal norms leave a certain freedom of choice with regard to the reference unit. However, research on the impact of alternative measurement units on consumer behaviour is still in its infancy and its findings are inconclusive. Moreover, this influence has so far only been measured directly. Investigating the product category bottled beer (with its essential product attributes ‘brand’, ‘price’, ‘alcohol content’ and ‘size of packaging unit’), a Choice Based Conjoint experiment provides empirical evidence that a large (per 1 L) compared to a small (per 100 mL) size unit of measurement leads to a significant shift of importance towards the product attribute ‘price’ at the expense of the ‘brand’. In addition, consumers react more sensitively to price changes. At the strategic level, retailers can use these insights to sharpen their positioning through a suitable unit price measure. When making operational decisions, retailers should bear in mind that the reference unit influences the likelihood of purchase, the scope for price increases and the opportunities for up-selling. |
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| Keywords: | Measurement-unit effect Price perception Pricing tactics Unit pricing |
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