An Empirical Study of Advertised Reference Price on Consumers' Behaviors

This study is directed to the business community regarding the planning of advertisements and more specifically implementing their reference prices. The aim is to investigate the effects of the presentation of reference prices of the consumers' behaviors. It is an empirical study in which the researcher has used literature reviews and survey to investigate the issue. A survey is delivered to 116 randomly selected respondents, where 86 people have replied. The researcher has investigated different areas related to reference prices such as the importance of advertised reference prices for firms, the effects of advertised reference prices to consumers purchase behaviors; the effects on the consumers purchase decisions; the products characteristics that influence consumers purchase behaviors, and finally the impact of the firms' variables to the consumers' behaviors. Reference prices may be defined as the cost that customers consider reasonable to pay or expect paying for a typical product. The market department of the organizational consistently engages in assessing the product's reference prices in order to set the level of prices affordable to customers or target markets. Today's customers are more knowledgeable than the customers in the past. This research will help in providing positive and easily acceptable tool to launch a new product in the market. Furthermore, it might be of great benefit to the business communities in the industries.