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Cross-Cultural Equivalence of Price Perceptions Across American, Chinese, and Japanese Consumers . Juan (Gloria) Meng, Minnesota State University, Mankato Suzanne A. Nasco, Southern Illinois University at Carbondale. BEHAVIORAL PRICING CONFERENCE Sep. 19-20, Philadelphia, PA.

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Cross cultural equivalence of price perceptions across american chinese and japanese consumers

Cross-Cultural Equivalence of Price Perceptions Across American, Chinese, and Japanese Consumers

Juan (Gloria) Meng, Minnesota State University, Mankato

Suzanne A. Nasco, Southern Illinois University at Carbondale

BEHAVIORAL PRICING CONFERENCE

Sep. 19-20, Philadelphia, PA


Introduction
Introduction American, Chinese, and Japanese Consumers

  • Why “price perception”?

    • Economics Approach

    • Behavioral Science Approach

  • Why these three cultures?

    • The U.S. and Japan are the world’s largest consumer markets.

    • China will be at least the third largest consumer market by 2025 (McKinsey group, 2006)


Price perception lichtenstein ridgway and netemeyer 1993
Price Perception American, Chinese, and Japanese Consumers (Lichtenstein, Ridgway, and Netemeyer, 1993).

  • Negative

    • Value Consciousness

    • Price Consciousness

    • Coupon Proneness

    • Sale Proneness

    • Price Mavenism

  • Positive

    • Price-Quality Schema

    • Prestige Sensitivity


Cross cultural differences in price perceptions
Cross-Cultural Differences American, Chinese, and Japanese Consumers in Price Perceptions

  • Tests of Existence of Lichtenstein et al. (1993) Constructs

  • Stringent Tests of Measurement Invariance of Lichtenstein et al. (1993) Constructs


Objectives
Objectives American, Chinese, and Japanese Consumers

  • to test the external validity (generalizability) of Lichtenstein et al. (1993)’s price perception model in different cultural settings

  • to gain insights about how price perception factors differ across cultures

  • to examine the mean differences across cultures on the five price perception constructs


Hypotheses steenkamp and baumgartner 1998
Hypotheses ( American, Chinese, and Japanese Consumers Steenkamp and Baumgartner,1998)

  • Hypothesis 1: The constructs of price perception in Lichtenstein et al. (1993)’s model also exist cross-culturally: the same number of price constructs emerge for consumers in all cultures and the scale variables load on the same constructs for all cultures.

  • Hypothesis 2: The loadings between the indicators and the latent constructs are the same for consumers across all cultures.

  • Hypothesis 3: The correlations of error between any two indicators in the price perception model are invariant across cultures.

  • Hypothesis 4: The correlations between latent variables are equivalent in different cultural groups.

  • Hypothesis 5: The variances of latent variables are equal between different cultures.


M ethodology
M American, Chinese, and Japanese Consumers ethodology

  • Measurement

  • Questionnaire Translation and Validation

  • Data Collection


Demographic information
Demographic American, Chinese, and Japanese Consumers Information


Fit indices for the price perception model
Fit Indices for the Price Perception Model American, Chinese, and Japanese Consumers


Summary of invariance tests across cultures
Summary of Invariance Tests across Cultures American, Chinese, and Japanese Consumers


Price perception subscale means by culture
Price Perception Subscale Means by Culture American, Chinese, and Japanese Consumers


Mean price perception subscale differences across cultures

4 American, Chinese, and Japanese Consumers

3.8

3.6

3.4

3.2

3

2.8

2.6

2.4

2.2

2

VALUE

PRICE

SALES

QUALITY

PRESTIGE

Price Perception Subscales

Mean Price Perception Subscale Differences across Cultures


Conclusions
Conclusions American, Chinese, and Japanese Consumers

  • Price perception constructs—exist across cultures.

  • Measurement model—invariant (partially) across cultures.

  • Means of price perception factors

    • No significant differences on the value and quality subscales

    • Significant differences on price sensitivity, prestige sensitivity, and sales proneness

    • Chinese consumers were significantly more sensitive to price and prestige.

    • U.S. respondents had higher sales proneness


Contributions
Contributions American, Chinese, and Japanese Consumers

  • Theoretical

  • Methodological

  • Managerial

  • Limitations

    • Student Samples

    • Other relevant factors (e.g., Country-of-Origin)


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