Cross-cultural equivalence of price perceptions across American, Chinese, and Japanese consumers

Purpose - The purpose of this paper is to apply Lichtenstein et al.'s price perception model to American, Chinese and Japanese cultures, to test the measurement equivalence across three cultures, and to compare the price perception constructs across three cultures using equivalent instruments. Design/methodology/approach - A questionnaire is used to collect information on more than 500 student respondents from America, China, and Japan. Findings - Utilizing structural equation modeling, a 21-item version of Lichtenstein et al.'s scale is created that has good fit across the three cultures. In progressively constraining tests, good model fit is found when constraining or partially constraining the factor loadings, error correlations, factor variances, and correlations between factors to be equal across three cultures tested. In addition, after creating price perception subscales, no significant differences emerge between Chinese, Japanese, and US consumers on value consciousness or price/quality schemas. Significant differences emerge on price consciousness, prestige sensitivity, and sales proneness. Practical implications - The 21-item scale of Lichtenstein et al.'s price perception model can be generalized to both China and Japan. The primary conclusions (i.e. that Chinese consumers reported significantly higher price and prestige sensitivity, compared to USA and Japanese consumers, while US consumers showed higher levels of sales proneness than Chinese and Japanese consumers) provide a rationale for international retailers to develop different pricing and promotional strategies when expanding their business into these three cultures. Originality/value - A 21-item scale to measure five of Lichtenstein et al.'s price perception constructs that has been validated through measurement invariance tests and compared across consumers in China, Japan, and the USA is provided.