Reduce Content or Raise Price? The Impact of Persuasion Knowledge and Unit Price Increase Tactics on Retailer and Product Brand Attitudes

This research investigates consumer reactions to the practice of increasing unit prices of products by either reducing product content or increasing total prices. Using pricing tactic persuasion knowledge (PTPK) as a lens for understanding, I predict that total price increases garner less favorable attitudes toward retailers for relatively low PTPK consumers, while content reductions garner less favorable attitudes toward product brands for relatively high PTPK consumers. The results of an experiment with a nationally representative sample of U.S. consumers support these asymmetric predictions about PTPK consumer segments as well as expectations about the underlying psychological processes.

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► Pricing tactic persuasion knowledge (PTPK) impacts reactions to unit price changes.
► High PTPK predicts negative reactions toward product brands when content is reduced.
► High PTPK consumers’ reactions are driven by a tendency to infer profit motives.
► Low PTPK consumers react to total price increases negatively toward retailers.
► Low PTPK consumers’ reactions are driven by affordability and local attributions.