Partitioned Pricing in Advertising: Effects on Brand and Retailer Attitudes

Abstract

This research highlights the negative attitudinal effect of partitioned pricing. The basis of this effect is that partitioned pricing tends to promote higher level of error in price recall. Consumers may not react favorably to the error especially when they perceive that the use of partitioned-price information is responsible for the mistake. This creates negative affect, which in turn unfavorably influences brand attitude formation/change. However, when consumers attribute responsibility of the price recall error to themselves or to the retailer sponsoring the ad, attitude toward the brand using partitioned-price information declines to a lesser extent.