The impact of the euro on the consumer decision process: theoretical explanation and empirical evidence

Abstract

Purpose Because its actual impact is still rather blurred, the euro brings up many questions among managers as well as gives rise to much marketing research. This paper aims specifically to assess and measure the impact of the euro on the consumer decision process. Design/methodology/approach This paper first expounds the theory that the currency changeover creates a cognitive and visual bias. Then it moves on to give experimental evidence with a sample of 800 real buyers that, in the French context, the euro currency creates a bias on the different stages of the decision process. Findings Analysis of covariance (ANCOVA) reveals that euro prices influence the treatment of price information, price perception and, to a more marginal extent, the perception of product value. Individual factors, such as increased experience with the euro, moderate judgmental bias strength. Practical implications The results bring out the face value effect of prices, which shows that when unsure of actual price value the consumers turn to nominal value as an anchor for evaluating prices. This paper identifies implications for retailers who have to watch both the overall price range of the items they offer and the price positioning of their own brands in euros and implications for public authorities who have to force consumers to replace price references in the old currency with references in euros. Originality/value This research brings out the “magical” or “illusory” effects of prices, while there is only very scant academic evidence available.

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