Vulnerability to Low-Price Signals: An Experimental Study of the Effectiveness of Genuine and Deceptive Signals

Low-price guarantees help buyers make inferences about retailers' prices. However, researchers are concerned that consumers might be vulnerable to relying on guarantees associated with high market prices. Furthermore, truly low-priced retailers that issue low-price guarantees might be vulnerable to consumers' discounting of such guarantees. This article experimentally assesses these concerns and finds that the effects of adding a low-price guarantee to a low or high offer price on consumers' pre-purchase perceptions depend on consumers' confidence in their product category price knowledge and their decision involvement. The article explores the implications of the findings and provides directions for further research. (C) 2011 New York University. Published by Elsevier Inc. All rights reserved.