Linear and Non-linear Effects of Price and Non-price Related Antecedents on Retailers’ Price Image

Retailers’ pricing has become one of the most important topics for profitability as they are operating on razor-thin margins. A key problem is to understand how customers perceive retailers’ pricing and non-pricing activities and how these perceptions are formed to a price image. This study examines the effect of several antecedents on the formation of customers’ price image. This empirical study (812 face-to-face interviews) identifies significant price-related antecedents and significant non price-related antecedents of consumers’ price image. Moreover, non-linear effects of interacting antecedents on the formation of consumers’ price image are identified and discussed. The results of this study imply that by actively managing the antecedents, a retailer might be able to lever customers’ perception of the price image without necessarily sacrificing profitability.