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Executive Summary
In general, consumers establish a preference for one product early in the process of considering the options available. When this preference does not include consideration of product prices, the currently preferred product is referred to as the “benefits leader”—that is, the product that is more in the mind of the consumer in terms of the benefits alone. In this article, the authors propose that consumers who switch to a cheaper product after learning prices retain a trace of their benefits leader. The authors provide evidence of this retention of the benefits leader by showing that consumers distort new information to favor the benefits leader. This distortion is so profound that it can reverse the diagnosticity of information that objectively favors the cheaper option, so the consumer views it as favoring the more expensive benefits leader. As a consequence of this distortion of new information, consumers revert to their benefits leader at rates that far exceed upper bounds on normative reversion. Indeed, the tendency to revert is so extreme that consumers will revert to their benefits leader even when postprice information objectively favors the cheaper product. These findings have implications for pricing strategy, sales closing techniques, and the design of comparative advertising. They also have theoretical implications for the role of price as an attribute—namely, most choice models of consumer behavior (e.g., conjoint analysis) do not afford unique status to price beyond suggesting that it should be given adequate weight to reflect its universal importance. In short, the findings presented in this article suggest that price is treated as a unique attribute by consumers, so it should be treated as such by marketers as well.

Biography
Kurt A. Carlson is Assistant Professor of Marketing in the McDonough School of Business at Georgetown University. Previously, he was Assistant Professor of Marketing at Duke University’s Fuqua School of Business. Kurt received his PhD in Marketing from the Johnson Graduate School of Business at Cornell University. His research examines consumer decision making, with a focus on how goals direct choice processes. His work has appeared in Journal of Consumer Research, Journal of Marketing Research, Management Science, Organizational Behavior and Human Decision Processes, Psychological Science, and Journal of Experimental Psychology (applied and general).

Margaret G. Meloy is Associate Professor of Marketing in the Smeal College of Business at the Pennsylvania State University. She received her PhD in Marketing from the Johnson Graduate School of Business at Cornell University. Her research examines consumer decision making, with a focus on how mood influences those choice processes. Her work has appeared in Journal of Consumer Research, Journal of Marketing Research, Management Science, Organizational Behavior and Human Decision Processes, and Psychological Science.

Daniel Lieb is Marketing Information Consultant at Bank of America in Charlotte, N.C. Dan received his PhD in Marketing from the Fuqua School of Business at Duke University.

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