Quality or Sacrifice? The Influence of Decision Task and Product Characteristics on the Dual Role of Price

Abstract

People perceive price as a cue of monetary sacrifice, a quality signal, or both. However, this research proposed that the relative salience of these two roles varies with different decision tasks (i.e., selection and rejection). Furthermore, the effect of decision task type on price perception differs by product type (i.e., tangible goods or services). Two experiments show that (1) the price-quality perception under the selection task is higher than that of a rejection task for tangible goods but not for services; and (2) for goods and services, the sacrifice perception is greater in the rejection task than that in a selection task. These findings have important implications for formulating product assortment and marketing communications strategies.