The Elusive Role of Price in Brand Choice Behavior

C. Whan Park, University of Pittsburgh
V. Parker Lessig, University of Kansas
James R. Merrill, Indiana University
ABSTRACT - The role of price in choice behavior is examined for situations in which information about other important product attributes is available to the consumer. The article suggests that consumers perceive and use price in different ways and readjust its role in choice behavior, thus detracting from the predictability of choice models in which price is one of the important product dimensions.
[ to cite ]:
C. Whan Park, V. Parker Lessig, and James R. Merrill (1982) ,"The Elusive Role of Price in Brand Choice Behavior", in NA - Advances in Consumer Research Volume 09, eds. Andrew Mitchell, Ann Abor, MI : Association for Consumer Research, Pages: 201-205.

Advances in Consumer Research Volume 9, 1982      Pages 201-205


C. Whan Park, University of Pittsburgh

V. Parker Lessig, University of Kansas

James R. Merrill, Indiana University


The role of price in choice behavior is examined for situations in which information about other important product attributes is available to the consumer. The article suggests that consumers perceive and use price in different ways and readjust its role in choice behavior, thus detracting from the predictability of choice models in which price is one of the important product dimensions.


A consumer's brand choice process has been viewed by some investigators as being deterministic and by others as being stochastic. According to the deterministic point-of-view, once we know the consumer's decision criteria and the utility associated with each of these criteria (with criteria and utility assumed to remain constant for a given choice task), we should be able to predict the consumer's brand selection. Choice models of this type include the compensatory models, the lexicographic model, the satisficing-plus model, the conjunctive model, and the additive difference model.

Those who view the choice process as stochastic feel that the utilities associated with the stimuli undergo random fluctuations. This probabilistic view of choice processes is expressed by Tversky's elimination-by-aspects model and the additive random aspects model.

There is sufficient support for the complimentary relationship between the deterministic and the stochastic positions (Rappaport and Wallsten 1972, Fishburn 1974, and Slovic 1975). A consumer's choice is predictable enough to give credit to the deterministic view yet unpredictable enough to support the belief in random elements in the choice process.

Often when a discrepancy is found between a choice model's prediction and the DM's (decision maker's) actual choice, the researcher attributes the failure of accurate prediction to the inadequate conceptualization of the choice model itself or to the DM's inability to cope with the choice task. Surprisingly, little attention has been paid in consumer behavior to the nature of the stimulus dimension itself as a possible source of discrepancy between the actual and the predicted choices. More specifically, the discrepancy between the model's predicted choice and the DM's actual choice may have nothing to do with the particular choice model tested or with the DM's lack of motivational involvement with the choice situation. Rather, it may be caused by the unique characteristics of the stimulus information which the DM uses in making a choice.

The objective of the present study is to examine price as a stimulus dimension and to identify its role in the DM's choice process. Although many studies have been concerned with the relationship between price and perceived quality or its related aspects, we have not been able to find any studies which describe the way consumers use price in choice situations.


Several researchers have emphasized the importance of stimulus properties in understanding an individual's information processing and choice behavior (e.g., Rappaport and Wallsten 1972, Lawrence 1963, Egeth 1967, and Garner 1970). Unfortunately, in consumer behavior little attention has been given to how an individual processes (interprets), categorizes, and utilizes stimuli in making a choice.

Product-related stimuli can be characterized as being continuous (e.g., price) or as being noncontinuous (e.g., two-door vs. four-door car, sedan, hardtop). An examination of price is of specific interest for two major reasons. First, there is reason to believe that an individual can assign affect or utility to noncontinuous product dimensions with less difficulty and with greater stability than is the case with continuous stimuli such as price. Since there- is a relatively small number of categories (e.g., subcompact, compact, mid-size, and full-size car) existing for the noncontinuous dimensions (e.g., car size), by using a sharply discontinuous utility scale, the consumer can clearly discriminate among a dimension's categories. This may not be true, however, in the case of price, a continuous product dimension. A relatively high degree of stimulus ambiguity is expected to exist in categorizing price into ranges due to the absence of an objective external reference. This does not mean that the consumer does not categorize price into ranges or categories based upon utility. There is, for example, strong theoretical and empirical support (Monroe, 1973) suggesting that the consumer categorizes price by breaking it into ranges and then in making a choice uses these ranges instead of the specific price. Park (1978), however, has shown that this price categorization is unstable and often changes during the choice process.

The second major reason why the role of price in the choice process should be examined is that the DM's expressed utility for different prices may not be reliable in the absence of information on other product dimensions. The utility expressed for different prices or price categories may change depending upon the composition of other product-related information. Intuitively, it would seem that an individual may not view price as one of the salient dimensions to be used in making a choice. Rather, he may view price as one dimension against which differences in all the other dimensions are weighed and evaluated. Therefore, when researchers predict one's choice based upon a model using utility information on each dimension (including price), a high degree of discrepancy between the model's prediction and the DM's actual choice would be expected. It should be noted that most choice models (including the compensatory, the lexicographic, and the conjunctive models) base their predictions on utility or preference information which treats each stimulus dimension, including price, separately.



In this study, brands of automobiles were used as choice alternatives. Subjects were selected solely on the basis of whether or not their interest in and involvement with the task of selecting automobile brands were sufficiently high to provide some meaningful results. The involvement level was controlled by selecting married graduate students intending to buy a car (new or used) within a year of this study. A total of 50 qualifying subjects participated in the study; for their efforts, each was paid $3.00.

Construction of Experimental Stimuli

Two criteria were applied for constructing the stimuli. First, it was felt that brand information should be realistic. Thus, most of the information profiles of brands were obtained from "Charlton's 1976 New Car Prices," although some modifications of the original information were made. The second criterion was that experimental stimuli should be designed in such a way that the subject makes a choice in a state of conflict, as is usually the case when purchasing a car. If one alternative outperforms the others across all dimensions, the situation would be unrealistic and little information concerning the whole choice process would be obtained. Therefore, stimuli were controlled so that pairs of brands would be Similar on some major dimensions (e.g., gas mileage, price, frequency of repairs and size) yet different on other major dimensions.

Using the above criteria, 12 brands described through 10 stimulus dimensions (i.e., product characteristics) were examined. Table 1 (second and third columns) presents the stimulus dimensions and categories which were used to describe each of the 12 brands (unnamed).

Choice Task

Each subject was scheduled for an individual interview in the School of Business laboratory. Four types of information were obtained from each subject. First, each subject indicated the importance associated with each of the 10 stimulus dimensions. Importance was measured using a 7-point scale and was defined as the impact which the particular dimension would have on the selection of an automobile. Second, the subject was presented an information sheet describing each of the 12 automobiles in terms of the 10 dimensions. The subject then indicated which automobiles were regarded as acceptable purchase options. Third, each subject indicated, using an 11-point scale, the degree of satisfaction expected from each category of stimulus dimension. Finally, from those brands identified as being acceptable (second item above), the subject selected that brand believed to be the best purchase choice, the second best brand, and so on until all acceptable brands had been ranked in order of preference.



From the second and the fourth information sets just described, it can be seen that subjects made their final brand selection from an evoked set rather than going directly from an examination of all available brands to the most preferred automobile. Choices were examined this way for several reasons. Note that a number of theoretical and empirical studies (e.g., Cyert, March and Moore 1963, Howard and Sheth 1969, and Payne 1976) support the concept of a two-stage selection process.

While each subject was examining the brands and making his choice, he was asked to verbalize all of his thoughts so that the interviewer could trace the choice process. Whenever the subject's response was not clear, the interviewer asked for clarification. These protocols were tape recorded and later studied.

When the subject had finished ranking brands, the interviewer removed from the subject all brand attribute information except that for the brands chosen as first and second best. The interviewer then asked the subject to specify which product dimension was the most important for distinguishing the best brand from the second best Once this subject had indicated this dimension, the interviewer asked which brand, the first or second best, he would choose if both brands were equally satisfactory with respect to this most important product dimension. Next, in addition to assuming that both brands are equally satisfactory on the most important dimension, the subject was asked to assume that they were also equally satisfactory on the second most important dimension. Under these conditions, the subject was again asked to indicate which of the two brands he would select. This procedure continued through the attributes until the subject indicated price as the dimension responsible for the choice. Through this procedure, it was possible to identify the impact of price differences as compared to that of differences on other product dimensions. These interviews were also tape recorded.


Identification of Price Role Groups

The role of price in choice behavior was analyzed using each subject's protocol and questionnaire responses. (Whether the subject assigned different prices to the same category, i.e., the same satisfaction, was determined from his/her responses to the questionnaire. From the protocol data, we identified how the subject actually handled price in the process of choosing the best brand.) The following five groups were identified from these two information sources:

I. subjects who categorized the prices of the two best brands as being equally satisfactory and what did not use price differences in making a final choice:

II. subjects who categorized the prices of the best two brands as offering different degrees of satisfaction but did not use price differences in making a final choice;

III. subjects who categorized the prices of the best two brands as offering different degrees of satisfaction and who used that difference as a tradeoff while making a final choice;

IV. subjects who categorized prices of the best two brands as offering different degrees of satisfaction but treated them as if they were the sam while making a final choice; and

V. subjects who initially categorized the prices of the best two brands as being equally satisfactory but treated them as being different when making a specific choice.

Responses on the 11-point satisfaction scale were used for determining the price satisfaction categories. Specifically, each of the 11 points on the satisfaction scale was treated as a category.

Assigning subjects to these five mutually exclusive groups was not difficult. The first two groups contain subjects who, in their protocols, did not mention price while making a final choice. The last three groups contain subjects who explicitly mentioned price.

In order to better understand how subjects were assigned to Groups III, IV, and V, it is helpful to characterize some of their statements. In Group IV, the subjects initially assigned the prices of the two brands to different satisfaction categories. However, in the protocol, these subjects stated that although price was important the prices of the two preferred brands were "about the same." The subject then went on to make a final choice based on other attributes. The subjects in Group V initially assigned the prices of the two brands to the same satisfaction category. Yet, when making a choice, a typical statement was, "Brand A has a little edge in price over Brand B, so I would choose A." The nature of the price tradeoff for Group III subjects was revealed in the protocol by comments such as: "Since the price is lower and the gas mileage is about the same, I would choose Brand B;" or, "Even though car B's price is somewhat lower, car A's frequency of repairs is so much better that I would choose A.

The distribution of the 50 subjects assigned to the five price role groups is as follows: Group I - 11 subjects, Group II - 11 subjects, Group III - 13 subjects, Group IV - 5 subjects, and Group V - 10 subjects. Several aspects of this distribution should be noted. First, price does not seem to play a single role in choice behavior.

Second, the subjects in Groups II, IV, and V clearly treated price in a manner different from that expected from their responses to the price satisfaction questions. While making a specific choice decision, 26 of the 50 subjects readjusted their expressed degree of price satisfaction. This observation supports a proposition discussed earlier in this paper. Specifically, it was argued that the consumer's price categorization or price utility is unstable and often changes during the choice process.

Third, although the subjects in Group IV initially indicated different degrees of satisfaction for the prices of their two most preferred brands, they treated these prices as being the same when making a brand selection. An interesting observation associated with this behavior is that for these subjects substantial differences existed between their two most preferred brands with respect to product dimensions other than price. The satisfaction differences on other product dimensions were greater than the price satisfaction difference. In this situation, the subjects treated the two prices as being the same (due to their relatively low informational value) and instead focused attention upon the larger differences found on other dimensions.

The preceding observations of the subjects' readjustment of the role of price raises two important questions which are: (a) whether the category readjustment phenomenon is present among noncontinuous product dimensions and (b) whether this readjustment is a function of information provided on other product related stimuli. The following is an account of the examination of these two issues.

Comparing Price Role Groups to Similar Groups on Noncontinuous Dimensions

To investigate the process of readjustment among noncontinuous stimuli, two dimensions, frequency of repairs and car styling, were examined. Frequency of repairs and car size were chosen since they appeared across subjects to be the most important noncontinuous product dimensions.

Five groups like those previously discussed for price were identified for the dimensions size and frequency of repairs. Table 2 shows for each of these five groups the number of subjects assigned to that group when subjects are examined on the role of (a) price, (b) frequency of repairs, and (c) car size.

As can be seen from Table 2, the distribution of subjects r belonging to these groups when frequency of repairs or when size is the product dimension is in sharp contrast with the role distribution for price. For frequency of repairs and for size, the verbalized choice behavior for 43 of the 50 subjects (subjects in Groups I and III) was consistent with their responses to the 11-point satisfaction questions (p < 0.0001 level). However, when price was the product dimension, only 24 of the 50 subjects behaved in a manner which could have been predicted from their questionnaire responses (not significant). This suggests that expressed utilities for these noncontinuous product dimensions are more stable than is the case with price.

Price Readjustment and Information on Other Product Dimensions

Earlier it was mentioned that once a subject had finished ranking his acceptable brands in order of preference, he was asked which of his two most preferred brands he would select (and why) if both brands were assumed to be equally satisfactory with respect to (a) the most important product dimension, (b) the most important and the second most important product dimensions, and (c) so on until price was mentioned as a factor responsible for the purchase decision.

The responses to these questions of the 21 subjects in Price Role Groups I and V were examined to provide information on whether a subject's readjustment of the price role could in part be a function of information on other product dimensions. When initially asked to indicate the degree of satisfaction associated with a car's price, these subjects assigned the prices of their two most preferred brands to the same satisfaction category. Yet when questioned in the manner just described, 15 of these subjects used price as a basis for selecting one brand over the other. This was true even though the automobiles differed on other attributes where these specific attribute levels had earlier been specified as providing different degrees of satisfaction. Thus, in the absence of information on other product attributes, price was not anticipated to be a factor influencing the purchase decision. Yet, in the presence of other attribute information, price became a factor.



(It should be mentioned that price again behaved differently from the noncontinuous product dimensions. None of these 21 subjects made a choice between their two most preferred brands through the use of those noncontinuous product dimensions where the two automobiles' attribute levels were initially classified as being the same in terms of satisfaction.)

Hoffman (1960) provides some insight regarding cue readjustments such as those noted above for price. He states that the weight placed upon a particular cue changes depending upon the values of other cues. He goes on to state that people come into judgment situations with certain expectations regarding the interrelatedness of cues which define objects. The weights are then adjusted depending upon the congruence or incongruity of the cue value with the values of the other cues which describe the object being judged.


The results of the present study along with past research findings suggest that price plays a different role at different stages of the choice process. In early evaluations of alternatives, price would be used mainly to screen out unacceptably priced alternatives (Park 1978)o However, in the subsequent stage of the choice process, price's role appears to be complex and somewhat unstable. Of particular interest at this later stage is the fact that the role of price (unlike that of other product dimensions) was readjusted by many of the subjects.

One plausible explanation for the price readjustment is that subjects might employ a step-wise category readJustment for price while, at the same time, taking other attribute differences into consideration. Specifically, consumers might view price as a dimension against which differences on other dimensions are weighted and evaluated. The subjects appear to derive a certain value from price differences and then compare this value implicitly to the value derived from the remaining attribute (dimension) differences.

This price readjustment phenomenon could contribute to a failure in the prediction of choice and thus needs to be identified in advance. Unfortunately, the appropriate measurement techniques are yet to be developed. Conjoint analysis is one of the few available techniques for this purpose although it would not render a satisfactory answer to the identification problem of price readjustment prior to the choice decision.


Cyert, Richard H., March, James G. and Moore, C. G., (1963), "A Specific Price and Output Model," in Richard M. Cyert and James G. March (eds.), A Behavioral Theory of the Firm (Englewood Cliffs: Prentice-Hall).

Egeth, Howard, (January, 1967), "Selective Attention," Psychological Bulletin, 67, 41-57.

Fishburn, P. O., (July, 1974), "Lexicographic Orders, Utilities, and Decision Rules: A Survey," Management Science, 20, 1442-1471.

Gardner, W. R., (1970), "The Stimulus in Information Processing," American Psychologists 25, 350-358.

Hoffman, P. J., (1960), "The Paramorphic Representation of Clinical Judgment," Psychological Bulletin, 42, 116-131.

Howard, John A. and Sheth, Jagdish N., (1969), The Theory of Buyer Behavior (New York: John Wiley & Sons. Inc.).

Lawrence, D. H., (1963), "The Nature of a Stimulus: Some Relationships between Learning and Perception," in S. Koch (ed.), Psychology: A Study of a Science Vol. 5 (New York. McGraw-Hill, 179-212).

Monroe, Kent B., (February, 1973), "Buyers' Subjective Perceptions of Price," Journal of Marketing Research, 10, 70-80.

Park, C. Whan, (September, 1978), "A Conflict Resolution Choice Model," Journal of Consumer Research, 5, 124-137.

Payne, J. W., (August, 1976), "Task Complexity and Contingent Processing in Decision Making: An Information Search and Protocol Analysis," Organizational Behavior and Human Performance, 16, 366-387.

Rappaport, A. and Wallsten, Thomas S., (1972), "Individual Decision Behavior," Annual Review of Psychology, 23, 131-179.

Slovic, Paul, (August, 1975), "Choice between Equally Valued Alternatives," Journal of Experimental Psychology: Human Perception and Performance, 1, 280-287.