I only Care about the Americano: Basic Item Effect

다국어 초록 (Multilingual Abstract)

The Republic of Korea is referred to as the Coffee Republic because Koreans consume much coffee every day. Accordingly, coffee shops abound in Korea, and competition in this industry is severe. Price varies even though similar items are sold. For example, one coffee shop near a university sells a cup of Americano for 1,000 won, whereas another coffee shop like Starbucks sells the same type of coffee for 4,100 won. Assume that café W offers an inexpensive cup of Americano, but the other items it sells are more expensive than those at other stores; conversely, café Y sells all items at a slightly cheaper price than other cafés. In this situation, is the satisfaction of consumers the same between the two cafés? Which café do consumers prefer?
This study is founded on these questions. Some industries or stores offer basic items. For example, Americano is basic item in the coffee shop industry. A basic item has characteristics that influence consumers to judge a store that is not familiar to consumers. If a basic item such as Americano is sold at an inexpensive price, consumers perceive this coffee as “cheap”. This perception can be applied to other items, and thus consumers conclude that the overall price of the store is inexpensive. This judgment leads to brand preference. This series of processes is called the basic item effect.
The basic item effect was confirmed through Studies 1 and 2. Participants in the one very condition, i.e., café W, evaluated the overall price perception and brand preference more positively than those in the all little condition, i.e., café Y. The basic item effect was observed in Study 1. However, the basic item effect was not affected by the number of items. In Study 2, the basic item effect also emerged. The strength of this effect was different depending on price sensitivity.
This study not only presents a new topic for future research on consumers and price but also provides evidence to verify other interesting phenomena. The results of this study have great implication for marketers who want to start a new business.

목차 (Table of Contents)

• Ⅰ. Introduction 1
• Ⅱ. Theoretical Background 3
• 2.1. Menu attention and information process 3
• 2.2. Reference price 4
• 2.3. Price perception 7
• 2.4. Loss leader 8
• Ⅲ. Hypotheses 10
• Ⅳ. Study 1 15
• Ⅴ. Study 2 25
• Ⅵ. General Discussion 32
• 6.1. Conclusion 32
• 6.2. Implication 33
• 6.3. Limitations and future research 34
• Appendix 36
• Reference 57