Interpretations of Semantic Phrases in Comparative Price Advertisements: Some Preliminary Evidence on a Public Policy Issue

ABSTRACT - The informative and deceptive potential of semantic price phrases depends on the meaning interpreted by the consumer and the meaning intended by the retailer. The purpose of semantic phrases is to communicate information about prices to the consumer. The more vague the semantic phrase, the greater the likelihood of differing interpretations and the chance that the meaning will not be shared. Consequently, there is a greater potential for deception. This utilization of vague semantic phrases is contrary to the Federal Trade Commission's objective of enhancing factual comparisons (Grewal and Compeau 1992).

Citation:

Dhruv Grewal and Larry Compeau (1993) ,"Interpretations of Semantic Phrases in Comparative Price Advertisements: Some Preliminary Evidence on a Public Policy Issue", in NA - Advances in Consumer Research Volume 20, eds. Leigh McAlister and Michael L. Rothschild, Provo, UT : Association for Consumer Research, Pages: 479-480.

Advances in Consumer Research Volume 20, 1993      Pages 479-480

INTERPRETATIONS OF SEMANTIC PHRASES IN COMPARATIVE PRICE ADVERTISEMENTS: SOME PRELIMINARY EVIDENCE ON A PUBLIC POLICY ISSUE

Dhruv Grewal, University of Miami

Larry Compeau, Clarkson University

ABSTRACT -

The informative and deceptive potential of semantic price phrases depends on the meaning interpreted by the consumer and the meaning intended by the retailer. The purpose of semantic phrases is to communicate information about prices to the consumer. The more vague the semantic phrase, the greater the likelihood of differing interpretations and the chance that the meaning will not be shared. Consequently, there is a greater potential for deception. This utilization of vague semantic phrases is contrary to the Federal Trade Commission's objective of enhancing factual comparisons (Grewal and Compeau 1992).

A semantic phrase can enhance the believability and perceived value of the price-promotional offer by providing more information (e.g., an ad: "was $24.99, now $17.99" provides more information than an ad: "Sale Price, $17.99") (Barnes 1975). The use of different semantic phrases to denote the same amount of saving in the price-promotion (e.g., "was $2.00, now $1.00" versus product advertised for "$1.00., 1/2 off regular price") affects consumers' purchase and search behaviors (Lichtenstein, Burton and Karson 1991). Consequently, how advertisers and retailers word their price claims can influence consumers' perceptions and their behavioral responses (Compeau and Grewal 1990).

A number of different semantic labels for the reference price are used by advertisers in their price advertisements (e.g., "Regular", "Original", and "Compare at"). These semantic phrases may be informative or deceptive depending on whether both the consumer and the advertiser share the same interpretation for the semantic phrase. If they do share the same interpretation of the semantic phrase, then the potential for deception is small. However, if they do not share an interpretation of the semantic phrase, then the potential for deception is great. For example, retailers frequently label an actual selling price as a "Special". A consumer may interpret an item labelled "special" as unusual merchandise, or an attempt to reduce inventory, or a limited time offer.

A semantic phrase that is vague or imprecise is open to multiple interpretations and has a greater likelihood to be deceptive. Richards (1990, p. 30) has pointed out that, "courts have determined that if a statement in an ad lends itself to more than one interpretation by the ordinary recipient of the ad, and one of those interpretations is deceptive, the representation will be construed to be deceptive, in toto." Public policy makers can develop shared meaning by legally defining the common semantic phrases used in comparative price advertisements and then educating retailers and the public as to these definitions. Furthermore, it is critical that they then enforce their appropriate use by advertisers. Such labelling practices have been used to label different levels of cut and fat in ground meat (e.g., ground round, ground chuck, ground beef). Thus, the semantic phrase informative content must be weighed against its potential for deception.

The meanings consumers assign to commonly used semantic phrases need to be researched (Grewal and Compeau 1992). How do consumers interpret the various semantic phrases "Regular Price/Sale Price" or "Compare At" or "Special" or "Their Price/Our Price"? The research to date has not looked at the everyday meanings of commonly used semantic phrases from the a consumer's perspective. Therefore, the primary objective of this research is to examine the consumer meanings or interpretations of these commonly used semantic phrases.

This study is part of a larger on-going examination of the everyday meaning of semantic cues from a consumer's perspective. The results presented were based on five in-depth qualitative interviews conducted during the summer of 1992 (additional interviews have been conducted since that time). The participants, all women, are primary shoppers for their families. Two are married with no children, two are married with two and five children respectively, and one is a single parent with two children. The participants ages range from twenty-seven to fifty-two. Three participants are employed in full-time positions, one has gone back to graduate school, and one is a full-time housewife (with five children).

Each interview was conducted by both of the principal researchers in the participants' homes or at a convenient meeting place during their lunch hour. The interviews lasted anywhere from 45 to 90 minutes. The interviews were conducted based on an existential-phenomenological approach (Giorgi 1975; Kvale 1983; Thompson, Locander, and Pollio 1989, 1990). This approach was adopted as a means of focusing on the everyday meaning of semantic phrases through an interpretive analysis of the participants' lived-experiences. However, it was also recognized that due to the rather specific nature of the topic, the unstructured existential-phenomenological approach would need to be augmented with a more structured component where participants could provide meanings in their own words for specific semantic phrases. Thus, each interview started with a broad open-ended question asking the participant to recall a recent experience when they purchased an item and felt that they got a good deal or where they saw an advertisement that they thought offered a good deal. The goal was to capture the experiences of the participant related to dealing with price offers.

Typically, a participant related several experiences before indicating that she could not remember any other experiences and could not recall any other advertisements. The conduct of the interview then shifted to a more structured approach requesting participants to respond to semantic phrases presented on a series of 8.5" by 11" cards. The cards contained semantic phrases, in a simple print format by themselves, or embedded in an actual print media advertisement. The phrases selected were based on a detailed review of advertisements from newspapers and circulars from three large eastern cities and several smaller towns over three months. The phrases represent those phrases which appeared most often in the comparative price advertisements.

Each interview was tape recorded and transcribed verbatim. The verbatim transcripts served as the data from which themes were identified. Careful readings of the transcripts, many times over, lead to an understanding of each participant's experiences. In a hermeneutical fashion, the interpretation progressed via an iterative process of relating part of the text to the whole (Bleicher 1980; Ricoeur 1976).

A second stage of analysis was performed after the themes were identified. All responses to the semantic phrase cards presented to the participants were categorized by phrase. The responses were analyzed, giving special attention to definitional types of responses in order to arrive at interpretations regarding the everyday meaning of the semantic phrases to consumers.

The results of the study suggest that the use of semantic phrases can be informative or deceptive. To be informative, the phrase must provide the consumer with accurate information that the consumer does not already have available. To be deceptive, the semantic phrase must simply provide for one confusing or misleading interpretation. Thus, it is inherently much easier for a semantic phrase to be deceptive than informative. The results of this study suggest that for all but regular price and sale price, currently popular semantic phrases are confusing and more likely to be deceptive than informative. In order to make the phrases more informative, significant attention to detail is required.

This study is limited by the small sample size and future efforts are underway to include other participants. Moreover, future research may want to consider a survey methodology to tap a much broader spectrum of consumers. Identifying meanings is always difficult since we are inherently limited by the words which are at our disposal. Thus, the use of semeiotics may be a fruitful avenue to explore the meanings of semantic phrases.

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