Consumer Price Limits and the Brand Effect

The effect of brand name present/absent condition on consumer price limits was examined in an experimental setting. The findings of this study have important implications for pricing managers. The results support the past findings that brand name affects price perception. Branded products are perceived to be higher priced than unbranded products (higher acceptable price). That is, branded products seem to command a price premium as compared to unbranded products. The findings suggest that the well-known brand name should be positioned in the upper acceptable price range and the not so wellknown brand names in the lower acceptable price range. This brand positioning strategy, in turn, will determine the product's position in the product line, the marketplace, its competition, and its use patterns. Price is very much a part of the product and branding policy.