PRICE ATTENTION AND

MEMORY
Consumer Behavior

MOHAMED LISAAM
A295425
30-10-2019
 CONTENTS

INTRODUCTION....................................................................................................................................... 2

HYPOTHESIS............................................................................................................................................. 3

HYPOTHESIS I.....................................................................................................................................................3
HYPOTHESIS II.................................................................................................................................................3
HYPOTHESIS III............................................................................................................................................... 3

METHODOLOGY / PROCEDURE & FINDINGS.....................................................................................4

METHOD (SAMPLING)......................................................................................................................................4
PROCEDURE......................................................................................................................................................4

RESULTS, ANALYSIS & FINDINGS........................................................................................................ 6

RESULTS (DATA COLLECTED).........................................................................................................................6

ANALYSIS & FINDINGS....................................................................................................................................8

CONCLUSIONS AND MARKETING IMPLICATIONS.........................................................................11

LIMITATIONS AND POSSIBLE FOLLOW-UPS...................................................................................12

REFERECES............................................................................................................................................ 13

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 INTRODUCTION

This is the first assignment from the Consumer Behavior module. In this research assignment
I will be looking into how focused the consumers are while shopping. This study will
examine consumer price knowledge by comparing the actual market prices and consumer
price estimates in the Aagalaa mart grocery Store.

The data will be collected from the customers of this grocery store over a period of time. To
analyse the focus of consumers while shopping the actual prices of the items will be
compared to the recall prices of the consumers. To find the reliability of data collected
various measurements will be taken though out the study and the mean average of the
samples will be compared to find the outcome results.

There are several studies done on consumer price knowledge and recall. However, research
has shown that consumers’ price knowledge with regard to packaged goods tends to be lower
than what one might expect intuitively from the prevalence of customer–price interactions
(Vanhuele, 2002). Even a couple of seconds after they pick up a product from the shelves,
only 47% to 55% of consumers are able to recall its correct price (Dickson, 1990). So after
analyzing the data from this research study, we will compare the outcome of the study to
validate if the consumer price knowledge is as poor as previously suggested by the results of
point‐of‐purchase studies done in the past.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 HYPOTHESIS

For the purpose of this study will be taking three factors into examination, which is
considered to have effect on consumer price knowledge. Each factor will be examined
separately and are as following.

Hypothesis I
 Consumers price knowledge is higher for the homogeneous products.

Homogeneous products normally exhibit some price dispersion in market equilibrium

(Topolyan, 2014). To take homogeneous products as a factor which effects the consumers
price knowledge we will be working under the assumption that when the number of
homogenous products are more the price knowledge of the consumer increases. However,
and inverse effect can happen on the consumers as a results of homogenous products since
there is large pool of similar products which can make the consumers careless for knowing
the prices of the products.

Hypothesis II
 Consumer price knowledge varies with the gender of the consumer.

Gender is always a factor which is considered to play a vital role in the consumer’s
knowledge of prices. Several studies have been conducted and the results vary from study to
study. So for the purpose of this research we will be taking gender as a factor and examine if
it really has any correlation between gender and the consumer’s price knowledge.

Hypothesis III
 Consumers have higher price knowledge when the stores use pricing cues such as sale
signs.

Sale signs is one of the most common form of the pricing cues used by the retailers. It usually
appears somewhere near the discounted item, announcing a bargain for customers. Placing a
sale sign on an item costs the retailer virtually nothing, and stores generally make no
commitment to a particular level of discount when using the signs (Anderson, 2003). So in
this study we will be checking the effect of sale signs on the price knowledge of the
consumers.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 METHODOLOGY / PROCEDURE & FINDINGS

Method (Sampling)
Customers who went for shopping in Aagalaa Mart was the target sample for this study. The
participants of the study were selected random from the shoppers in Aagalaa Mart. The
sample was targeted through the use of small intercept and inter-viewer-administrated
personal interview outside the Aagalaa Mart. To increase the support for participating in the
study each participant was rewarded with a free gift.

Procedure
For testing each of the above mentioned hypothesis a sample of 10 grocery shoppers were
selected randomly. Before asking the customers about the prices of the products some
filtering questions were asked to improve the results of the research. The following are the
questions asked to the customers.

1. If he/she is a regular customer of Aagalaa Mart.

2. If he/she is the shopper in the family who always shop for the required groceries for
the family.

If the participant passes these two questions, then the participants were asked about the prices
of the items they have bought. The recalled prices were compared to a set of actual price list
of items obtained from the store.

The procedures followed to investigate each hypothesis are as follows:

Hypothesis I: Consumers price knowledge is higher for the homogeneous products.

To find the correlation between homogeneous products and the price knowledge of the
consumers, 10 participants were chosen and asked about the prices of the products they have
bought. The items included Yogurt, Juice bottle and Carrot.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 Hypothesis II: Consumer price knowledge varies with the gender of the consumer.

For this study we took 10 female participants and 10 male participants. To keep the study as
much as controlled and to increase the validity of the result the participants who bought juice
bottles were taken from the sample. The product is homogeneous and the price rate is same.
So this makes it easy to compare the recall memory of both genders.

Hypothesis III: Consumers have higher price knowledge when the stores use pricing cues
such as sale signs.

To investigate the effect of sale signs on the price knowledge of the customers, sale sign was
kept in most used sections of Juice with discounts of 25 to 30 percentage. There were no
actual discounts included in the prices of the products (prices were same and the sale boards
were used to manipulate the consumers to make them believe it is discounted price). To
compare the results data was collected in two different days. On day first, no sale signs were
used and data was collected from 10 different participants. Few days apart sale signs with
discount was used in the same sections and date was collected from another 10 participants.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 RESULTS, ANALYSIS & FINDINGS

Results (Data Collected)

The following tables show the data collected for each of the hypothesis separately. Data in
the tables are arranged in order of products selected by the customers for easy analysis.

Hypothesis I: Consumers price knowledge is higher for the homogeneous products.

Table 1: Shows the actual price and recalled price of items by 10 consumers.

Consumer Product Actual Price (MVR) Recalled Priced

(MVR)
1 Yogurt 18 19
2 Yogurt 18 18
3 Yogurt 18 20
4 1 Kg Carrot 15 18
5 1 Kg Carrot 15 20
6 1 Kg Carrot 15 17
7 Juice Bottle 35 35
8 Juice Bottle 35 30
9 Juice Bottle 35 36
10 Juice Bottle 35 37

Table 2: Shows the mean of actual price and recalled price for each product.

Product Mean Actual Price (MVR) Mean Recalled Price

(MVR)
Yogurt 18 19
1 Kg Carrot 15 18.33
Juice Bottle 35 34.5

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 Hypothesis II: Consumer price knowledge varies with the gender of the consumer.

Table 3: Shows the actual and recalled price for bottle of juice by both male and female
consumers

Consumer Product Actual Price Recalled Price (MVR)

(MVR) Male Female
1 Juice Bottle 35 36 35
2 Juice Bottle 35 34.50 35.50
3 Juice Bottle 35 35 34.50
4 Juice Bottle 35 33 36
5 Juice Bottle 35 34 35
6 Juice Bottle 35 35.5 35
7 Juice Bottle 35 35 37
8 Juice Bottle 35 34 33
9 Juice Bottle 35 37 36
10 Juice Bottle 35 35 36
Mean 35 34.90 35.3

Hypothesis 3: Consumers have higher price knowledge when the stores use pricing cues such
as sale signs.

Table 4: Shows the discount price of yogurt and the recalled discount price by 10 consumers.

Consumer Product Price (MVR) Before Using After Using Sale

Sale Signs Signs (MVR)
(MVR)
1 Yogurt 18 20 19
2 Yogurt 18 19 18
3 Yogurt 18 18 18
4 Yogurt 18 19 18
5 Yogurt 18 18 17
6 Yogurt 18 18 18
7 Yogurt 18 18.50 18
8 Yogurt 18 19 19
9 Yogurt 18 17 18
10 Yogurt 18 19 18
Mean 18 18.55 18.10

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 Analysis & Findings

For the analysis of the results the data collected was processed as groups for each product.
The following charts are created for the easy representation of the date. For each factor the
results are analyzed separately as follows.

Hypothesis I: Consumers price knowledge is higher for the homogeneous products.

Comparison of Mean Actual Price of Products and Mean

Recalled Price By the Consumer
40

35

30

25

20

15

10

0
Yogurt 1 Kg Carrot Juice Bottle

Mean Actual Price (MVR) Mean RecalledPrice (MVR)

From the chart above we can see the variation in the actual prices and recalled prices of the
homogeneous products in this study data is higher for Yogurt and Carrot. The difference of mean
actual price and the mean recalled price for yogurt and carrot is MVR.1.00 and MVR 03.33
respectively. However, from the data we were able to understand that the customers were quite
aware of the price of the Juice bottles which showed a difference of MVR 0.50 for mean actual
price and mean recalled price. So these results of this study does not support the hypothesis “the
price knowledge is higher for homogeneous products”. For keeping the results as accurate as
possible we tried to fix variables like the type of homogeneous products. In this case we limited
the items to be grocery products. Also the samples were taken during different hours of the day
dividing the sample to be half males and half females.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 Hypothesis 11: Consumer price knowledge varies with the gender of the consumer.

Mean Actual Price and Mean Recalled Price

for Bottle of Juice by Male and Female Con-
sumers
35.4
35.3
35.2
35.1
35
34.9
34.8
34.7
Juice Bottle (Homogeneous Product)

Mean Actual Price (MVR) Mean Recalled Price by Male Consumers (MVR)
Mean Recalled Price by Female Consumers (MVR)

For understanding if there is a price knowledge of male and female consumers the date above
is collected for one limited type of product. In this study we used consumers who bought
bottle of juice. Date was collected from 10 female and 10 male consumers at different hours
of the day to increase the variety of the customers. The data collected shows a mean recalled
price of MVR 34.90 for the males and MVR 35.30 for the females. The mean actual price for
the juice bottle was MVR 35. Based on the data collected we can assume the price knowledge
of male consumers are slightly more compared to the female consumers since the variation
between the mean prices is less for the male consumers compared to the female consumers.
The data collected for this study supports and proves that there is an effect of gender on price
knowledge of the consumers.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 Hypothesis III: Consumers have higher price knowledge when the stores use pricing cues
such as sale signs.

Mean Actual Price and Mean Recalled Price of Yogurt Be-

fore And After using Sale Signs
18.6
18.5
18.4
18.3
18.2
18.1
18
17.9
17.8
17.7
Yogurt

Mean Actual Price (MVR) Mean Recalled Price Before Using Sale Signs (MVR)
Mean Recalled Price After Using Sale Signs (MVR)

The above mentioned chart shows data collected from 10 consumers before and after using
sale signs (discount boards). By analyzing the data, we can decide that the price knowledge
of the consumers is higher after using the sale signs. The variation between mean actual price
and mean recalled price after discount is MRV 0.10 while the variation between mean actual
price and mean recalled price before using sale signs was MVR 0.50. So the date collected
supports hypothesis. To keep the results accurate variables like the store from which samples
were collected, the product to which discount was given (juice bottle) were kept as constants.
Also date was collected on two different days for before using sale signs and after using sale
signs and collection was done during different hours of the day to increase the variety of
customers in the sample collection.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 CONCLUSIONS AND MARKETING IMPLICATIONS

This research presents new findings and contradicts the findings of previous similar
researches. Similar researched conducted previously shows that the consumer knowledge
about the prices is low in general. But from this study, we were able to analyze consumers
price knowledge and recall memory of the prices based on three different hypothesizes. The
other significant finding of this study is that consumer demographics have some impact on
price knowledge, regardless of the type of product. The variation between the actual prices
and recalled prices is lower than expected showing that the consumers are aware of the prices
of the products they are buying. Considering the ever-increasing levels of complexity, today’s
consumers search for as much information as is available to them. The uncertain economic
conditions, pricing information has become even more valuable to consumers. Through better
pricing strategies consumers will have more usable knowledge about the products. The more
usable knowledge consumer have will lead to better consumer attitudes toward products and
organization, thus leading to more purchase behavior, better customer satisfaction, and
eventually give the organization a better chance of establishing those long-term customer
relationships that will lead to loyalty (Bahl, 2011). Also the marketer will be able to adjust
the prices in such a manner to attract more consumers and make maximum profits.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 LIMITATIONS AND POSSIBLE FOLLOW-UPS

Consumer price knowledge is very complicated and a many-sided phenomenon which has to
be examined from various approaches and in various markets (Raijas, 2003). For this study there
were many possible limitations which can be improved for any further researches in similar topics
for research. Some of the limitations include the small sample size taken for this study. For this
study only 10 samples were taken for every hypothesis. This is a very small sample compared to
the population. Also the research was conducted in Aagalaa Mart only. This can affect the results
of the survey as type of customers we get for the sampling will be very limited. For conducting the
survey fake discount prices were used for manipulating customers and data was obtained. Misuse
of sale signs can also result in prosecution (Anderson, 2003). This is another factor which
needs to be taken into consideration when conducting similar study in the future. For future
studies to be conducted on the same topic. Researchers should use a larger population with
50-50 ratio of males and females to obtain data. Rather than collecting data from one
particular store, data should be collected from several stores in different areas of the cities to
increase the diversity and improve the reliability of the result. Moreover, in this study data
was collected over a short period of time. This can limit collecting data from variety of
customers. In future studies data can be collected over a long period of time depending of the
size and method of data collection used in the research.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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 REFERECES

Anderson, E. T. (2003, September). Mind Your Pricing Cues. Retrieved from https://hbr.org:
https://hbr.org/2003/09/mind-your-pricing-cues

Bahl, A. (2011). DIMENSIONS OF CONSUMER PRICE KNOWLEDGE: DIFFERENCES BETWEEN GOODS.

International Journal of Business and Social Science , 14-23.

Dickson, P. R. (1990). The Price Knowledge and Search of Supermarket Shoppers. Journal of
Marketing, 42-53.

Raijas, V. A.-S. (2003). Actual Market Prices and Consumer Price Knowledge. Journal of Product &
Brand Management, Vol. 12 Iss 3 pp. 180-192.

Topolyan, I. (2014, April 09). PRICE DISPERSION WITH HOMOGENEOUS GOODS AND. Retrieved from
editorialexpress.com: https://editorialexpress.com/cgi-bin/conference/download.cgi?
db_name=MWETSpring2014&paper_id=77

Vanhuele, M. a. (2002). Measuring the Price Knowledge Shoppers Bring to the Store. Journal of
Marketing, 72-85.

MOHAMED LISAAM | CONSUMER BEHAVIOUR | BBM (2019) | ZIKURA COLLEGE

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