Reference Prices in Passenger Cars – A secondary research study

As part of a course called behavioral dimensions & marketing strategies, which is a sequel to consumer behavior,1) I was required to pick any one concept of consumer behaviour, find five scholarly journal articles on it and then apply the learning from the papers onto a market category of my choosing.

I chose to study the small passenger cars segment and apply the concept of reference price on it. This seemed interesting at the time since Tata Nano had just been launched and its effect on existing cars especially with respect to their price perception and reference price seemed novel and relatively unexplored.

Hence, I started out with the following objective.

Main point of interest in this study is Nano’s category membership. Will it be perceived to be a member of the A1-A2 category? While the question is very interesting, the study assumes that without strong efforts from the other brands in the segment, it could be perceived as a member of the category. There is also some categorization research which suggests the same.2 If so, it throws up interesting questions on the price perception in the category. How will the reference prices be impacted? What would brands in the category have to do to ensure price acceptability? These are the main considerations of the study.

I did manage to find some interesting literature on reference price and apply it to the category. Although, the report is a bit pedantic, if you like the subject, you may find the report interesting. You can download the report by clicking the following link. BDMS – Study on Reference Prices in Passenger Cars.

References & Footnotes
  1. Sequel courses, like sequel movies, are often inspired by the success of the first one and are burdened with expectations : []
  2. Moreau, C.P., Markman, A.B. and Lehmann, D.R. (2001b), “What is it? Categorization flexibility and consumers’ responses to really new products”, Journal of Consumer Research, Vol. 27 No. 4, pp. 489-98. []

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