Does the Presentation of Comparative Prices Matter? An Extended Abstract

Recently Biswas et al. (2013) showed that comparative price promotions could be affected by the spatial location (left vs. right) of a sale price vis-a-vis its regular price. The location of a sale price in reference to its regular price assumes importance as it influences consumers’ ability to compute the depth of a discount when performing calculations (Alba et al. 1999; Biswas et al. 2013; Lichtenstein et al. 1991). Generally, in a comparative price offer (RP − SP), the regular price (RP) will be the minuend, while sale price (SP) the subtrahend. However, in addition to determining the arithmetic difference between prices, the perceived difference between prices will also depend on the ease or difficulty with which consumers could compute price information (Thomas and Morwitz 2009). When a comparative price conforms to a normative presentation that people expect to see when performing mathematical computations (RP − SP and not SP − RP; Biswas et al. 2013), it tends to make computations easier, and influences consumers’ assessment of the discounted offer (Thomas and Morwitz 2009). However, several retailers often offer comparative prices where a regular price is presented vertically above or below its sale price (e.g., macys.com; Amazon). So far research does not inform us if consumers will evaluate a comparative price promotion that is presented horizontally differently than if it was presented vertically. Hence, the research issue is whether a spatial difference in presentation of comparative prices (vertical vs. horizontal) affects consumers’ perception of discounts and if so when?