Journal of Retailing 87 (4, 2011) 479–488

Reduce Content or Raise Price? The Impact of Persuasion Knowledge and

Unit Price Increase Tactics on Retailer and Product Brand Attitudes
Luke Kachersky ∗
Fordham University Schools of Business Administration, 441 East Fordham Road, Bronx, NY 10458, United States

Abstract
This research investigates consumer reactions to the practice of increasing unit prices of products by either reducing product content or increasing
total prices. Using pricing tactic persuasion knowledge (PTPK) as a lens for understanding, I predict that total price increases garner less favorable
attitudes toward retailers for relatively low PTPK consumers, while content reductions garner less favorable attitudes toward product brands for
relatively high PTPK consumers. The results of an experiment with a nationally representative sample of U.S. consumers support these asymmetric
predictions about PTPK consumer segments as well as expectations about the underlying psychological processes.
© 2011 New York University. Published by Elsevier Inc. All rights reserved.

Keywords: Retail pricing; Unit prices; Persuasion knowledge; Retail consumer behavior; Attitudes

Regardless of the marketing channel member who first insti-
gates a unit price increase, retailers are at the front line executing
those changes. For decades unit price increases have been
implemented beyond consumer awareness by hiding beneath
differential thresholds, or the point at which a stimulus changes
enough to where a person will consciously notice it. Unit price
increases reflect an increase in the currency per unit of prod-
uct obtained. This can be done by adding only a few pennies to
a price without altering its leftmost digit (e.g., changing from
$2.95 to $2.99; Thomas and Morwitz, 2005), a unit price increase
tactic called a total price increase, or by keeping the price of a
product constant while reducing content in barely perceptible
ways (e.g., not reducing the physical package size despite the
reduction in content, or reducing the package size proportionate
to the original dimensions; Chandon and Ordabayeva, 2009), a
unit price increase tactic called a content reduction. For example,
Folgers coffee recently reduced a popular package of its coffee
from thirteen ounces to eleven ounces, yet the product still retails
for the same price under the same stock keeping unit number.
Implementing unit price changes in these ways has worked for
so long because, as intended, most consumers did not notice the
changes, and if they did, word of the change would not spread
far. This lack of consumer awareness seems to be fading. As it
∗ Tel.: +1 718 817 5921.
E-mail address: kachersky@fordham.edu
does, it is imperative for retailers and other channel members to
understand consumer reactions to these tactics.
Consumers have become more educated and given a more
far-reaching voice with the ubiquity of the Internet. Combin-
ing these two trends, it is not surprising that today’s consumers
are quick to notice even minute changes and to share that news
with the rest of the world. For example, the Consumers’ Union
website, The Consumerist, has dubbed the practice of reducing
content “The Grocery Shrink Ray,” (Consumerist.com, 2010).
Its readers from the general population regularly submit photo-
graphic examples of the phenomenon that they observe on their
local retail shelves. Even major national media outlets such as
NBC News and The New York Times have been publicizing the
practice; a recent article on the topic reached number three on
NYTimes.com’s “Most E-Mailed” list and appeared on the front
page of the print edition (Clifford and Rampell, 2011). Prior
research has explored if consumers notice differential thresh-
olds in pricing (cf. the controversy on the psychophysics of
prices, Kamen and Toman, 1970), and largely concluded that
consumers did not. Thus, prior work had not questioned what
happens when consumers do notice such changes; if few con-
sumers were noticing the changes, it was not a practical question
to ask. Yet today, it is clear that greater numbers of consumers
are noticing, and are spreading the information to others. There-
fore, the purpose of this research is to address this newly relevant
question: what happens when consumers do notice unit price
increases? Moreover, does the outcome depend on the manner
of price increase? Finally, do outcomes vary across segments of

0022-4359/$ – see front matter © 2011 New York University. Published by Elsevier Inc. All rights reserved.
doi:10.1016/j.jretai.2011.08.001
480 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488
Fig. 1. The influence of unit price increase tactic on product brand and retailer attitudes.
consumers? While answers to these questions are of theoretical
importance in understanding differential thresholds in pricing, in
today’s marketing environment they are of increasing practical
importance as well.
In this paper, the persuasion knowledge model (PKM;
Friestad and Wright, 1994) is used to explain and predict con-
sumer reactions to unit price changes. The PKM is a normative
account of how people construe and react to persuasion attempts.
A recent extension of the PKM demonstrated that consumers
have varying levels of knowledge about the intent underly-
ing marketers’ pricing tactics (Hardesty et al., 2007), and that
consumers having relatively higher levels of this pricing tactic
persuasion knowledge (PTPK) tend to react more negatively to
persuasive pricing tactics. The present paper extends this work
to the domain of unit price increases, also adding important
insights about the cognitive reactions to unit price changes and
their resulting implications for attitudes toward two potential
persuasion agents—product brands and retailers.
In an experiment with a nationally representative consumer
panel this research makes three major contributions. First, I
show that higher levels of PTPK lead consumers to infer dif-
ferent motives behind the two types of unit price increases, with
content reductions being attributed to firm motives to increase
profit margins and total price increases being attributed to firm
motives to maintain profit margins in the face of situational fac-
tors such as cost inflation. Second, I show that higher levels of
PTPK lead consumers to look less favorably on product brands
when the product content is reduced compared to when the total
price is increased, and that this outcome is driven by inferred
motives. Third, in contrast to high PTPK consumers, lower lev-
els of PTPK lead consumers to alter their evaluations not of
the product brand but of the retailer. In similar contrast, low
PTPK consumers look less favorably on total price increases
than on content reductions, and this outcome is not based
on inferred motives. The predicted processes and outcomes
for each PTPK consumer segment are depicted graphically in
Fig. 1.
The rest of this article is organized as follows: first, I discuss
how persuasion knowledge, particularly pricing tactic persua-
sion knowledge, may influence both the psychological process
and the outcomes of consumer reactions to unit price changes.
Second, the article presents the details and results of a study that
tests and supports theoretical predictions about the influence of
content reductions versus total price increases across consumers
with varying levels of PTPK. Third, I discuss the theoretical and
managerial implications of this work while also taking stock of
its limitations.
Unit price increases and persuasion knowledge
Persuasion is the act of causing someone to do or believe
something. According to the persuasion knowledge model
(PKM; Friestad and Wright, 1994), regardless of an action’s
objective persuasive intent, when people perceive an action to
be an attempt to persuade, they tend to think about that action
differently. In the parlance of the PKM, subjective belief of
persuasive intent causes a change of meaning. For example, a
consumer’s perception of a price can range from a construal as
a simple presentation of information – the cost of access to a
product – to a construal as a tactic intended to directly influ-
ence beliefs or behavior, undermining the consumer’s agency.
For example, Schindler et al. (2005) found that some perceive
a price of “$190 + $10 shipping” as a simple presentation of
information, while, to varying degrees, others view it as a tac-
tic designed to make people believe they are getting a lower
price (i.e., in the $190 range) than is actually offered (i.e.,
$200). In other words, perceived persuasive intent changes the
meaning of “$190 + $10 shipping” from a simple presentation
of the cost of product access to a more detailed, subjective
understanding of the communication including the intent of the
communicator.
Unit price increases may also be subject to such variation in
perceptions of persuasive intent. Namely, people may perceive
unit price increases as tactics intended to alter consumer behav-
ior such that consumers continue to purchase the product despite
the change. If such persuasive intent is perceived, then con-
sumers’ beliefs about the extent to which the action is designed
to persuade should cause them to make additional inferences
about it. If consumers perceive unit price increases as persua-
sion attempts, then what additional cognitive content should be
added to consumer processing of the tactic? In general, when
faced with price increases consumers tend to infer that firms are
trying to increase their profit margins (Bolton et al., 2003). Rel-
ative to total price increases, content reductions tend to be less
transparent because they can be implemented without chang-
ing the packaging at all or by changing the packaging in a way
consumers are less likely to notice (Chandon and Ordabayeva,
2009). This type of subversion should lead consumers that notice
content reductions to perceive them as having greater persuasive
intent than total price increases have. In turn, content reductions
should result in a stronger tendency of consumers to infer that a
firm’s motive for the unit price increase is to increase profit mar-
gins. However, this tendency is not likely to be universal among
consumers; some consumers should be more apt than others
to make such inferences about the motives underlying the two
 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488
types of unit price increase tactics. Hardesty et al. (2007) identi-
fied an individual difference variable, pricing tactic persuasion
knowledge (PTPK), which moderates consumers’ reactions to
pricing tactics. PTPK reflects the degree of accurate knowledge
a consumer has about myriad pricing practices in the market-
place. Notably, they found that consumers with high levels of
PTPK generated more knowledge-related thoughts in response
to pricing tactics. For example, in response to tensile discount
claims (i.e., discounts with ambiguous ranges, such as, “Up to
$10 off”) high PTPK participants were more likely to believe
that the discount might be less than the upper end of the claim,
regardless of the objective truth (i.e., without knowing the factual
levels of the discount). Analogously, I expect that higher levels
of PTPK should be associated with greater differences in the
likelihood of inferring increased profit margin motives from a
content reduction compared with a total price increase, regard-
less of the objective reason for the change’s implementation.
Specifically:
Hypothesis 1. Content reductions (vs. total price increases)
increase the likelihood of inferred profit margin increase motives
for individuals with relatively higher levels of PTPK.
An important part of the PKM is that once the consumer per-
ceives a persuasion attempt, he must cope with this persuasion
knowledge, often by discounting or refuting the content of the
attempt. Friestad and Wright (1994) contended that the idea that,
“someone is using a tactic of influence ‘on me’ is fundamen-
tally ‘off-putting,”’ (p. 13) because it undermines one’s sense of
control. Thus, persuasion attempts may even invoke emotional
reactions in direct contradiction to message content, or reactance
(Brehm, 1966), as they can be conceptualized as restrictions on
behavioral freedoms (Petty and Cacioppo, 1979).
Prior research has shown that when consumers perceive per-
suasive intent in marketers’ pricing tactics, they tend to react
negatively. Schindler et al. (2005) identified a segment of con-
sumers who believe that shipping surcharges have persuasive
intent by way of making the total price of a product seem smaller
than it actually is. As predicted by the PKM, they demonstrated
that these consumers react against shipping surcharges by choos-
ing not to shop from catalogs or on the Internet. More recently,
Kachersky and Kim (2011) found that consumer preference for
partitioned prices (e.g., $189 camera + $10 shipping) compared
with inclusive prices (e.g., $199 camera, including shipping) is
driven in part by perceived persuasive intent, such that, all other
things equal, consumers prefer the price format they perceive as
having less persuasive intent. Additionally, Brown and Krishna
(2004) showed that greater levels of perceived persuasive intent
caused consumers to react against higher-priced default options.
Hardesty et al. (2007) found that consumers with high PTPK
reacted negatively to tensile discount claims and to quantity sur-
charges. In a similar vein, if hypothesis one proves true, that high
PTPK consumers infer greater profit margin increase motives
from content reductions than from total price increases, then high
PTPK consumers should also be more likely to react negatively
to content reductions than to total price increases. By contrast,
low PTPK consumers, not having generated such inferences,
should react more akin to a standard economic explanation;
481
that is, they should react less favorably to total price increase
than to a content reduction because the latter does not affect the
affordability of the good.
A key question remains, though. What should these reactions
entail? In their formulation of the PKM, Friestad and Wright
(1994) held that one of consumers’ primary goals in reacting to
persuasion attempts is to form valid attitudes about persuasion
agents (i.e., the responsible party for the persuasion attempt). In
construing persuasion attempts, they note that consumers should
recognize agents as those who are responsible for designing
the persuasion attempt, not necessarily those who follow said
designs. In their words, “We presume that consumers seek valid
attitudes toward the puppet masters, not their puppets” (p. 8).
Therefore, I expect that the negative reaction toward content
reductions exhibited by high PTPK consumers will be directed
toward the upper level channel partner, or the product brand, and
not the lower level channel partner, or the retailer.
Lacking the prerequisite knowledge, low PTPK consumers
should react differently than high PTPK consumers. Namely,
in the absence of different inferences for content reductions
compared to total price increases, their reaction should not be
influenced by cognitive and affective reactions to persuasion
attempts, but by more practical concerns. A total price increase
more directly impacts the affordability of the product than does
a content reduction. In line with classical economic theory then,
a total price increase should cause a commensurately negative
reaction, but toward whom? It has been shown that lower levels
of domain specific knowledge are associated with more simple
attributions (Fletcher et al., 1986). Therefore, low PTPK con-
sumers should react toward more proximal (i.e., the retailer)
rather than distal (i.e., the product brand) agents. Taken all
together, the prediction for consumer responses to content reduc-
tions compared with total price increases across levels of PTPK
is as follows:
Hypothesis 2. Content reductions (vs. total price increases)
lead to less favorable product brand attitudes for individuals
with relatively higher levels of PTPK.
Hypothesis 3. Total price increases (vs. content reductions)
lead to less favorable retailer attitudes for individuals with rela-
tively lower levels of PTPK.
Finally, because these differences are proposed to be driven
by practical concerns for relatively low PTPK consumers and
by cognitive and affective reactions to inferred motives for rel-
atively high PTPK consumers, it is hypothesized that:
Hypothesis 4. For individuals with relatively higher levels of
PTPK, the influence of unit price increases by way of content
reductions (vs. total price increases) on product brand attitudes
is mediated by inferred motives.
Study
This study aimed to comprehensively test the proposed
framework using online survey software and a nationally rep-
resentative sample of U.S. consumers. Unit price change tactic
was manipulated between two experimental conditions, while all
482 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488
trait constructs and outcomes were measured. Participants were
posed with a hypothetical situation in which a product that they
routinely purchased increased its unit price. In one experimental
condition the content amount remained constant while the total
product price increased (referred to as “total price increase”);
in the other condition the product content was reduced while
the total product price remained constant (referred to as “con-
tent reduction”). Participants then wrote about the motives they
inferred for the change and evaluated both the retailer and the
product brand.
Method
Participants and design
155 U.S. consumers drawn from a nationally representative
panel participated in exchange for points that could be redeemed
for prizes. The experiment employed a single factor design in
which unit price change tactic was manipulated at two levels
between experimental conditions, and the continuous form of
the moderator, pricing tactic persuasion knowledge (PTPK), was
measured.
Stimuli
Stimuli are replicated in the appendix. Participants were
asked to imagine a scenario in which they purchase a bag of
name brand potato chips for their household each week at their
regular supermarket. They were shown a picture of an 11.5-
ounce bag of the potato chips along with its supermarket shelf
card including the retail price, $2.50, and its unit price, 21.8 cents
per ounce. They were then asked, “Now imagine that on your
next trip to the supermarket you see the following,” and shown
a picture of a bag of the same name brand potato chips with its
supermarket shelf card. The pictures were visually identical to
the ones participants first saw, with the following exceptions: (1)
In both experimental conditions, the unit price increased to 23.8
cents per ounce, (2) in the “total price increase” condition, the
retail price displayed on the supermarket shelf card was $2.73,
not $2.50, and (3) in the “content reduction” condition, the fine
print on the potato chip bag and the supermarket shelf card was
10.5 ounces, not 11.5 ounces.
Procedure
Participants were first exposed to the hypothetical scenario
and unit price change. They were then asked if they noticed a
change between the sets of stimuli. Participants that noticed the
change proceeded to the next screen, in which they were asked
three-open ended questions: (1) to articulate the change they
noticed, (2) to explain why they thought the change occurred, and
(3) to describe how the change made them feel. They then indi-
cated their perceptions of the persuasive intent of the unit price
increase. The next two screens of the survey asked participants
about their attitudes toward the potential actors in the situa-
tion: the retailer and the product brand. Finally, they responded
to a battery of true/false questions to measure PTPK; PTPK
was measured at the end to minimize the potential for demand
bias.
Measures
As a filter question, after being exposed to the stimuli par-
ticipants were asked if they noticed a change between sets of
potato chip bags and supermarket shelf cards. No participants
were screened out as a result of this question. As a manipu-
lation check, participants were subsequently asked to describe
the change they noticed; all participants described the change
commensurate with their experimental condition. Importantly,
they were asked to describe the change on the screen following
exposure to the stimuli, meaning they had to accurately recall
the information to successfully answer that question. This is a
good indication that participants were paying attention in the
study, a potential drawback of using online experiments.
An assumption in the theory is that content reductions are
perceived as having greater persuasive intent than total price
increases. Participants indicated their perceptions of persuasive
intent on a Likert scale adapted from Campbell and Kirmani
(2000). In the total price increase condition it read, “The total
price increased while the package size remained the same in
order to ensure my purchase decision would not change;” in the
content reduction condition it read, “The package size decreased
while the total price remained the same in order to ensure my
purchase decision would not change.” While all pricing tactics
can be considered persuasive, the relative levels of agreement
between these two statements describe the difference in the
perceived strength of the persuasive intent of each tactic. As
expected, participants exposed to the content reduction per-
ceived greater persuasive intent than those exposed to the total
price increase (MCR = 5.36 vs. MTPI = 3.53, p < .001).
Inferred motives were assessed in the responses to the open-
ended question, “Why do you think the change(s) were made?”
Two independent judges blind to the purpose of the study
coded these responses into one of the following categories:
increase profit margin, passing on cost inflation, general state
of the economy, “I don’t know,” and other. Interrater reliabil-
ity was .72, and conflicts were resolved through discussion.
Forty-seven percent of respondents were classified into “increase
profit margin motive,” 39% were classified into “passing on
cost inflation,” and 14% were classified into “general state
of the economy;” notably, no participants responded, “I don’t
know.” Sample increase profit margin motive responses were,
“Everybody is cutting back to make a profit,” and, “The need to
meet a new profit margin.” Sample passing on cost inflation
responses were, “The cost of supplies – gas and transporta-
tion – has gone up,” and, “Some cost went up so the price
of the product had to go up as well.” Sample general state of
the economy responses were, “Inflation,” and, “Because of the
economy.”
Product brand and retailer attitudes were measured on
two-item, seven-point semantic differential scales including
unfavorable/favorable and bad/good. The scales demonstrated
high reliability (rPRODUCT BRAND = .973 and rRETAILER = .972),
and were each averaged to indices for product brand attitude
(M = 3.97) and retailer attitude (M = 4.32).
Pricing tactic persuasion knowledge was measured using the
17-item scale developed by Hardesty et al. (2007). Participants
responded to 17 true/false questions about a variety of pricing
 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488 483

Table 1
Coefficientsa ,b for effects of unit price change tactic and pricing tactic persuasion
knowledge (PTPK).
Predictors Inferred motive Product brand attitude Retailer attitude

Constant −.317 (1.60) 3.34 (1.09)* 1.74 (1.14)

Tactic −2.70 (2.09) 2.47 (1.41) 3.55 (1.48)*
PTPK −.090 (.15) .085 (.10) .214 (.10)*
Tactic × PTPK .449 (.19)* −.264 (.13)* −.285 (.13)*
R2 a .27c .06 .05

n = 155.
a Standard error in parentheses.
b Each column represents a separate estimated model, with column headings
representing dependent variables, and the predictors as independent variables.
c Cox & Snell R2 .
* p < .05.
tactics, receiving one point for each correct response, zero oth-
erwise. The measure of pricing tactic persuasion knowledge was
the sum of accumulated points (M = 11.10).
Results
Inferred motives
Logistic regression was used to test Hypothesis 1. Inferred
motive for the price change was the key dependent variable,
coded as “0” for a profit margin maintenance motive (i.e., the
economy and cost inflation were collapsed into a single category)
and “1” for a profit margin increase motive. The independent
variables were (i) unit price change tactic, coded as “0” for total
price increase and “1” for content reduction, (ii) pricing tactic
persuasion knowledge, and (iii) their interaction. Results reveal a
significant two-way interaction between unit price change tactic
and pricing tactic persuasion knowledge (β = .449, p < .05). Full
regression results are presented in the first column of Table 1.
Per Irwin and McClelland (2001), the nature of that inter-
action is best articulated by examining the coefficients of
PTPK when substituting in commensurate values for total price
increase (i.e., 0) or content reduction (i.e., 1) into the estimated
regression. With a content reduction, the slope of PTPK is signif-
icant and positive (β = .359, p < .005). With a total price increase,
the slope of PTPK is insignificant and negative (β = −.090,
p = .54). To facilitate understanding of the interaction, Fig. 2
shows the tabulation of the percentage of participants who
Fig. 2. Percentage of participants who inferred a profit increase motive as a
function of PTPK and unit price change tactic.
inferred a profit motive across the lowest-third and highest-third
of PTPK and across each unit price change tactic.
Moreover, Aiken and West (1991) prescribe the Johnson and
Neyman approach to detect and explain the conditional effect of
a focal variable (unit price change tactic, in this case) at varying
values of a moderator variable (PTPK, in this case). This anal-
ysis revealed a stronger impact of content reduction (vs. total
price increase) on inferred motives as PTPK levels went up, a
pattern depicted in the first column of Table 2. An extension
of this technique is used to describe the region of the modera-
tor variable in which the effect of the independent variable on
the dependent variable will be statistically significant, called the
Johnson-Neyman significance region. Essentially, the inverse
of a z-test is used, setting z equal to the critical value for the
desired ␣ and solving for the levels of the moderator that dis-
tinguish significant effects of the independent variable on the
dependent variable from insignificant effects. Specifically, the
Johnson-Neyman significance region for PTPK was 8.53 and
above, meaning the effect of unit price change tactic on inferred
motives becomes significant (p < .05) when PTPK is at least
8.53. That is, as PTPK increases beyond 8.53, the likelihood of
a content reduction (vs. a total price increase) resulting in an
inference of a profit margin increase motive also increases. A
recent explanation of this analysis and a PASW (formerly SPSS)
macro for conducting it are available in Preacher et al. (2007).
Attitudes toward product brand and retailer
Linear regression was used to test Hypotheses 2 and 3. For
Hypothesis 2, attitude toward the product brand was used as

Table 2
Coefficientsa ,b for effect of unit price change tactic across levels of PTPK.
PTPK Inferred motive Product brand attitude Retailer attitude Product brand attitude,
controlling for inferred
motive

One s.d. below mean (PTPK = 8.99) 1.33 (.51)** .096 (.37) .99 (.39)* −.390 (.15)*
Mean (PTPK = 11.10) 2.27 (.39)*** −.461 (.26) .39 (.27) −.613 (.17)**
One s.d. above mean (PTPK = 13.21) 3.22 (.61)*** −1.02 (.37)** −.21 (.39) −.837 (.23)**
Johnson–Neyman significance region PTPK > 8.53 PTPK > 11.30 PTPK < 10.52 PTPK > 8.36
a Standard error in parentheses.
b Coefficients computed using regression models reported in Table 1 and inserting the commensurate value of PTPK.
* p < .05.
** p < .01.
*** p < .001.
484 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488
the dependent variable, with the independent variables being (i)
unit price change tactic, (ii) pricing tactic persuasion knowl-
edge, and (iii) their interaction. Results revealed a significant
two-way interaction between unit price change tactic and pric-
ing tactic persuasion knowledge (β = −.264, p < .05). Regression
results are presented in the second column of Table 1. Using
the Johnson–Neyman approach revealed an increasingly nega-
tive influence of content reductions (vs. total price increases)
on product brand attitudes across increasing levels of PTPK.
As portrayed in the second column of Table 2, at one standard
deviation above the PTPK mean there is a negative, statistically
significant influence of unit price change tactic on product brand
attitude (β = −1.02, p < .01), while at the PTPK mean and one
standard deviation below the influence is not statistically sig-
nificant (β = −.461, p = .08 and β = .096, p = .80, respectively).
More precisely, the effect of unit price change tactic on prod-
uct brand attitudes is statistically significant at PTPK scores of
11.30 and above. Hypothesis 2 is supported.
For Hypothesis 3, attitude toward the retailer was used as
the dependent variable, with the independent variables being (i)
unit price change tactic, (ii) pricing tactic persuasion knowledge,
and (iii) their interaction. A significant two-way interaction
between unit price change tactic and pricing tactic persuasion
knowledge emerged (β = −.285, p < .05). Regression results are
presented in the third column of Table 1. Using the Johnson-
Neyman approach revealed an increasingly negative impact of
total price increases (vs. content reductions) on retailer attitudes
across decreasing levels of PTPK. As shown in the third col-
umn of Table 2, at one standard deviation below the PTPK
mean there is a positive, statistically significant influence of unit
price change tactic on retailer attitude (β = .99, p < .05); in other
words, total price increases (tactic = 0) garner less favor than
content reductions (tactic = 1). Meanwhile, at the PTPK mean
and one standard deviation above, the influence of unit price
increase tactic is not statistically significant (β = .39, p = .15 and
β = −.21, p = .60). Hypothesis 3 is supported. In particular, the
Johnson–Neyman significance region indicates that the effect
becomes statistically significant at PTPK scores of 10.52 and
below.
In the regression used to test Hypothesis 3, presented in
the third column of Table 1, a positive main effect of PTPK
emerged. It was predicted that as PTPK decreases, total price
increases (vs. content reductions), would produce less favor-
able retailer attitudes. Because unit price increase tactic was
coded as “0” for total price increase, the total effect of PTPK
on retailer attitudes becomes .214 in that circumstance; mean-
ing that when total price is increased, for each unit decrease in
PTPK attitude toward the retailer goes down by .214. By con-
trast, when content is reduced (i.e., tactic = 1), the total effect
of PTPK on retailer attitudes becomes −.071; meaning that
when content is reduced, for each unit decrease in PTPK atti-
tude toward the retailer goes up by .071. This indicates that
for relatively low PTPK consumers, the difference in retailer
attitudes between content reductions and total price increases
is driven more by a preference against total price increases
than by a preference for content reductions. While the main
effect was unexpected, this pattern bolsters support for the
prediction that low PTPK consumers would be driven by afford-
ability concerns.
To illustrate the interactions from Hypotheses 2 and 3, and
because product brand attitudes and retailer attitudes were corre-
lated (r = .58, p < .001), a 2 (PTPK: high/low) × 2 (tactic: content
reduction/total price increase) multivariate analysis of variance
was used to make an additional assessment of the influence of
pricing tactic persuasion knowledge and unit price change tactic
on the outcome variables, attitude toward the retailer and attitude
toward the product brand. To perform this test an ordinal form
of the individual difference variable, pricing tactic persuasion
knowledge, was used, with the top third of PTPK scores com-
prising the high PTPK group and the bottom third comprising
the low PTPK group. As expected, a significant interaction of
PTPK and unit price change tactic emerged (Wilks’ lambda F(2,
79) = 3.37, p < .05). The means of the attitude measures across
conditions are presented in Fig. 3.
For Hypothesis 4, a regression analysis of moderated medi-
ation (Preacher et al., 2007) was used to assess the indirect
effect of unit price change tactic on product brand attitudes, via
inferred motives and conditional upon PTPK levels. In testing
hypothesis 1, the interactive effect of the independent variable,
unit price change tactic, and the moderator variable, PTPK, on
the mediator variable, inferred motives, was established. Per
Preacher et al. (2007), a second regression was run with attitude
toward the product brand as the dependent variable and the fol-
lowing independent variables: inferred motive (the mediator),
unit price change tactic, pricing tactic persuasion knowledge,
and the interaction of the latter two. As expected, the media-
tor, inferred motive, was significant (β = 3.82, p < .001) while
all other predictors were not (p’s > .16). The conditional indi-
rect effect of unit price change tactic on product brand attitudes
through inferred motives was estimated at varying levels of
the moderator, PTPK, using the Johnson–Neyman approach. At
specified intervals of PTPK, the conditional indirect effect was
statistically significant, but importantly, as expected, the condi-
tional indirect effect is stronger for higher levels of PTPK; this
pattern, in which the coefficient increased in strength from −.390
to −.837, is depicted in the last column of Table 2. That (1) the
tactic-by-PTPK interaction was significant in predicting inferred
motives; (2) it became insignificant in predicting product brand
attitude when controlling for inferred motives; and (3) the pre-
dicted pattern of conditional indirect effects emerged suggest
moderated mediation (Preacher et al., 2007; Zhao et al., 2010);
Hypothesis 4 is supported. Moreover, the Johnson–Neyman sig-
nificance region of PTPK is 8.36 and above. Therefore, the effect
of unit price change tactics on product brand attitudes through
inferred motives is statistically significant when PTPK is at least
8.36.
Discussion
This article makes important contributions to research on the
psychology of pricing and how consumers react to persuasion.
Foremost, research on unit prices never garnered favor among
marketing academics except for a short flurry of activity after it
became mandatory to post unit price information in the 1970s
 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488
Fig. 3. Mean attitudes across PTPK and unit price change tactic.
(cf. Edward, 1977). These studies largely focused on the influ-
ence of the presence (vs. absence) or the presentation format
of unit price information on purchasing behavior. Heretofore,
changes in unit prices and the corresponding cognitive and eval-
uative consumer reactions to them had not been studied. With
renewed interest from consumers on unit price changes, specifi-
cally content reductions, this work sets a foundation upon which
a more complete understanding of consumer responses to unit
price changes can be built.
This work also extends Hardesty et al.’s (2007) findings in
their development of the PTPK scale. They found that high levels
of PTPK were associated with increased likelihood of rejecting
offers with tensile price claims or with quantity surcharges. I
observed a similar result for content reductions, but also find
that inferred motive mediates such effects. Additionally, I found
that high PTPK consumers reacted toward the more distal per-
suasion agent, the product brand, demonstrating Friestad and
Wright’s (1994) heretofore-untested contention that consumers
aim to hold higher level persuasion agents responsible for per-
suasive tactics. On the other hand, low PTPK consumers reacted
toward the more proximal agent, the retailer, extending prior
work in which people with lower levels of domain specific
knowledge made more simple attributions (Fletcher et al., 1986).
This reveals additional levels of specificity to the pioneering
work on the existence and influence of PTPK by Hardesty and
colleagues.
Implications
In total the results indicate that managers should not approach
unit price increases as a “one tactic fits all” decision. Rather,
they must understand their markets first, then coordinate with
their fellow channel partners to implement the tactic that is
most beneficial to all involved—consumers, retailers, and prod-
uct brands. To start with an understanding of the market, it would
behoove both product brands and retailers to understand the
level of PTPK among consumers at the retail location. While
485
this direct approach may not be practical, our findings can still
be useful if managers look to more accessible information that
may be correlated with PTPK. For example, Hardesty et al.
(2007) demonstrated that younger consumers have lower lev-
els of PTPK than older consumers, so managers could use age
as a proxy for PTPK. Once there is some understanding of the
market, the product brand and the retailer should decide in con-
cert the specific unit price increase tactic to be used. If the target
market has a low level of PTPK, then content should be reduced
since these consumers will not penalize product brands for it and
will appreciate retailers for the additional measure of affordabil-
ity. If the target market has a high level of PTPK, the total price
should be increased since consumers will not penalize retail-
ers for it and will appreciate the lack of subversiveness from
the product brand. Such coordinated efforts will give consumers
what they want while also avoiding potential vertical channel
conflicts between retailers and producers.
From a policy perspective, this work highlights one of the
ways in which unit prices, which were enforced by most U.S.
states in the 1970s and largely ignored by consumers in subse-
quent decades (e.g., Aaker and Ford, 1983), are finally having
an impact on consumers. In the 1970s, public policy officials
and consumer advocates lauded unit price information for its
ability to enable consumers to more easily and accurately com-
pare package sizes within the same product category. While true,
up until recently evidence showed that consumers did not pay
attention to unit prices and missed out on the potential savings
(Koenenn, 1996). Today the Internet abounds with examples
that consumers are paying attention to this information, and this
research highlights the attitudinal outcomes of the policy, sug-
gesting that efforts in the 1970s to mandate the display of unit
price information may not have been in vain after all.
Limitations and future research
The results of this research should be used with caveats in
mind. First, the experiment used only one product category.
486 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488
Future work should test these propositions across different
product categories. Second, this work is focused specifically on
the question of what happens once consumers notice the unit
price increase. Our assumption, backed by anecdotal evidence,
is that ever more consumers notice such changes. However,
future work should explore the factors that influence consumers’
motivation and ability to detect and react to such changes. For
example, perhaps in a completely natural environment high
PTPK consumers are more likely than low PTPK consumers
to notice unit price increases. If this were the case, then the
results presented here for relatively low PTPK consumers might
not hold as much weight with retailers, to which low PTPK
individuals directed their reactions. By extension, though, if
low PTPK consumers do not notice the tactic at the point of
purchase, it is possible they may have especially harsh reactions
if they discover the tactic via a fellow consumer or the media.
Third, this research focused on using content amount and total
price to minimize the negative impact of a unit price increase.
It would be fruitful for future work to understand how these
tactics vis-à-vis each other can best be used to maximize the
positive impact of unit price decreases.
Appendix A. Appendix 1: Study stimuli
Appendix B. Appendix 2: Measures
Open-ended
If you noticed any changes, please describe them in the space
below:
If you noticed any changes, why do you think the change(s)
were made?
If you noticed any changes, in the space below please describe
how the changes make you feel:
Perceived persuasive intent
Total price increase condition: The total price increased while
the package size remained the same in order to ensure my
purchase decision would not change (1 = SD/7 = SA).
Content reduction condition: The package size decreased while
the total price remained the same in order to ensure my purchase
decision would not change.
Attitudes
Toward the retailer: Please indicate your feelings about your
regular supermarket by circling the appropriate number from
 L. Kachersky / Journal of Retailing 87 (4, 2011) 479–488 487

1 to 7 on the following scales: [1 = unfavorable/7 = favorable], A four-pack of a new brand of batteries—$2.00.

[1 = bad/7 = good]. Penetration pricing is used by marketers so that, by setting prices low,
Toward the product brand: Please indicate your feelings about consumers will be encouraged to try the product.
(circle one) TRUE FALSE DO NOT KNOW
the producer of the potato chips, Lay’s, by circling the
appropriate number from 1 to 7 on the following scales: Just $1.00 per issue for a 1-year subscription to sports magazine XYZ.
[1 = unfavorable/7 = favorable], [1 = bad/7 = good]. Pennies-a-day or XXX-per-day pricing is used by marketers to provide price
information in the most understandable format to consumers.
(circle one) TRUE FALSE DO NOT KNOW
Pricing Tactic Persuasion Knowledge (Hardesty, Bearden,
and Carlson, J. Retailing, 2007) A Computer having a 2 GHz processor and 1 GB RAM and laser printer
for $700.
Price bundling is used by marketers in order to increase revenue over what
$3.00 for a non-disposable, easy grip razor, and $10.00 for a package of
would have been obtained had the products been priced separately.
eight replacement razor blades.
(circle one) TRUE FALSE DO NOT KNOW
Captive pricing is used by marketers in order to take advantage of the fact that,
eventually, consumers will need to purchase the high-priced replacement
A new pair of running shoes—$140.00.
components if they want to continue using the product.
Price signaling is used by marketers since consumers may make quality
(circle one) TRUE FALSE DO NOT KNOW
judgments for products or services based on price (i.e., high price = high
quality, low price = low quality).
$0.79 for a hamburger on the value menu at a fast-food restaurant chain.
(circle one) TRUE FALSE DO NOT KNOW
Customer value pricing is used by marketers to attract consumers who seek
low prices to the marketer’s store.
Brand new product—videophone: $500.00.
(circle one) TRUE FALSE DO NOT KNOW
Price skimming is used by marketers to appeal to consumers who are willing to
pay a high price for a new product.
Always low prices at store XYZ.
(circle one) TRUE FALSE DO NOT KNOW
Everyday-low-pricing is used by marketers so that they will be perceived as
having really low prices on some items and higher prices on others.
A brand of orange juice’s 1/2 gallon price over a 4-week time period was
(circle one) TRUE FALSE DO NOT KNOW
as follows: Week 1 $2.50, Week 2 $2.50, Week 3 $1.50, Week 4 $2.50.
Random discounting is used to obtain sales from both consumers who carefully
$100.00 for a brand of wine (‘Brand X’). The same wine is currently sold
search for low prices and consumers who do not check prices carefully.
for $20.00 a bottle under the name ‘Brand Z’.
(circle one) TRUE FALSE DO NOT KNOW
Image pricing is used by marketers in order to have a higher priced version of a
product available for consumers who view higher-priced goods as having
Products X, Y, and Z: Up to 50 percent off.
higher quality, and a lower-priced version of the same product available for
Tensile price claims are used by marketers in order to take advantage of
consumers who strongly desire lower prices.
consumers who may inadvertantly perceive most or all products to be
(circle one) TRUE FALSE DO NOT KNOW
discounted by the stated amount (i.e., 50 percent off).
(circle one) TRUE FALSE DO NOT KNOW
2009 automobile—$500.00 over invoice.
Invoice external reference prices are used by marketers to persuade consumers
to seek out complete price information for a product.
(circle one) TRUE FALSE DO NOT KNOW
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