Consumer Preferences Among Low-Price Guarantee Offers

Authors

Stephen Baglione, St. Leo UniversityFollow
Louis A. Tucci, The College Of New JerseyFollow
James A. Talaga, La Salle UniversityFollow

Abstract

The competitive realities of the marketplace forces retailers to consider implementing low-price guarantees. Given that retailers will use low-price guarantees, which of the multitude of guarantees should be used? This paper examines the nature of low-price guarantees from the perspective of how consumers make trade-offs in different low-price guarantee designs. Using conjoint analysis, buyers indicate their preference for different low-price guarantee designs. Not all consumers respond to low-price guarantees the same. There are several segments of consumers with regard to low-price guarantees. The study was done with young adults (MBA students) who may be more sophisticated than the population as a whole. Retailers choosing a low-price guarantee ought to understand the preferences among their customers in order to choose an optimal strategy.