The concept of adaptation level theory supports the notion that consumers judge or evaluate price comparatively (Monroe 1990). Consumers are frequently presented with a higher merchant-supplied reference price to compare with a lower advertised selling price (Grewal, Monroe and Krishnan 1998). Research on comparative price advertising has traditionally been conducted based upon the assumption that consumers’ interpretations of a given semantic phrase, i.e., "Regular Price/ Sale Price, " are consistent across all consumers. However, given the variability among consumers’ perceptions found in other areas of consumer research, it is reasonable to assume that consumers’ interpretation of semantic phrases used to describe the relative nature of a price may also vary across consumers and vary between consumers and consumer researchers. Therefore, it has not been known whether a pricing claim is informative or deceptive because it depends on the meaning a consumer attaches to the semantic phrase. The lack of understanding of consumer’s interpretations of semantic cues exists even though there has already been a full stream of research in this area, even to the Meta analysis phase. The extant literature has been based on the premise that consumers and researchers assign the same meaning to semantic phrases.
This manuscript presents two studies toward an understanding of consumers’ interpretation of commonly seen semantic cues. The first study is a qualitative study that investigates consumers’ interpretations of various commonly seen semantic phrases. A pretest that isolates the effect of three semantic cues is conducted. There is no significant difference found in the consumers’ price estimates of the external reference prices among the three semantic cues. The second study is an experiment that tests the meanings uncovered in the initial probe and tests consumers’ perceptions of the deal. The measures resulting from the study identify types of shoppers.