The impact of product line extensions and consumer goals on the formation of price image

Hamilton Ryan*, Chernev Alexander

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

37 Scopus citations

Abstract

How do vertical product line extensions influence a retailer's price image? Conventional wisdom suggests that adding an upscale or downscale item to a product line has a directionally consistent impact on price image, such that upscale extensions increase price image and downscale extensions decrease price image. In contrast, this research argues that vertical extensions can have the opposite effect, such that upscale extensions can decrease rather than increase price image, and vice versa for downscale extensions. The authors further propose that the impact of vertical extensions on price image is a function of consumer goals and, in particular, whether consumers have the intent of browsing or buying. The authors test these predictions in a series of five empirical studies that offer converging evidence in support of the proposed theory.

Original languageEnglish (US)
Pages (from-to)51-62
Number of pages12
JournalJournal of Marketing Research
Volume47
Issue number1
DOIs
StatePublished - Feb 1 2010

Keywords

  • Browsing
  • Buying
  • Consumer goals
  • Price image
  • Vertical extensions

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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